Dr James, 1m 43s:

This episode of the Dentists Who Invest Podcast will be a little bit different because we are broadcasting live for the first time ever one of the rooms that was held at the recent Business of Dentistry Conference in Birmingham. The next conference will be to be held in the next few months. That will be on the 7th of November in London. We are going to be focusing on entrepreneurship and dentistry with a special dragon's dance segment. This content that we're you're about to hear is from none other than Dr. Chetan Mathias. Dr. Chetan Mathias is known as being a 7th figure dentist in that he will grow over seven figures across the surgeries and down practice. He shares the best piece of wisdom through this journey with us today so that we can benefit and understand how you achieve this momentous accomplishment whilst also being ethical and doing a great job for its kitchen.As ever, you can claim your CPD for this episode within the official Dentists Who Invest Smart Money Members Club. Smart Money Members Club also includes multiple mini courses and webinar series on finance for dentists, including how to become as tax fitent as possible, as well as understanding investing. All of this content counts as verifiable CPD, and you can download your certificates there and then upon completion of each lesson. In addition to this, we also include a whopping 10% discount on your dental indemnity and a 5% discount on lab bills for dental principals, amongst other perks and discounts for members. Please use the link in the description to claim your verifiable CPD for this episode.

Dr Chetan, 3m 14s:

Today we're going to speak about KPIs. Everyone here aware of KPIs? Right? What does KPI stand for? Simple, right? And working with practices, that's what I've been doing over the last three years, working with different practice owners. Implement systems in their practices, implement processes in their practices. Sometimes they have issues and problems. We're trying to find solutions for them in their practices. And one thing that terrifies most, not all, but most practice owners, is numbers. The minute you say numbers, they switch off. They're great at clinical dentistry, but the minute you say numbers, then they switch off. The practice is busy, they're fully booked most days. The team's working flat out. Right? And this is what I get on a weekly basis, practice owners asking me, like, what the hell is happening? Right? They're busy, very busy, but they're not profitable. Great turnovers, right? You all heard that saying, so I'm not going to go through that again. But it's not about turnover anymore. It was never about turnover. And it's it's more important now, right? So this practice owner, I'm going to give you some examples as we go ahead. So this practice that I'm working with at the moment, they spoke to me six months back. They had an 18% drop in production per hour. Overheads, this is a common trend in most practices, going up 65%. With this practice, it was 65 to 78%. But this is a trend across the industry. Case acceptance rates. For treatments, over a thousand pounds dropped from 62% to 41%. They were busier than ever. They were working harder, but there was just no money in the bank. There was just no money in the account. Right. Now, this practice owner had no idea what was going wrong. He just kept working harder. He'd been running his practice for the last 15-20 years. He was not a new practice owner. He's been running his practice for the last 15-20 years. Now, it might seem obvious to you, right? Like, okay, fine. But the but the issue was there was no tracking. He just didn't track anything. And the problem I find with most people is this, right? Wipe-based management. That's that's the biggest issue. You've you run your practices, most people run their practices just because of their with the gut with their gut feeling, just to see how they feel about the practice. The schedule looks full, so things must be great. The practice is busy, so things must be great. The team seems happy. No one's complaining. Does that actually mean the team's happy? Patients keep coming in through the door, so things must be great. And this is the biggest one. They're too busy to think about it because they're so busy putting out fires. Right? And this is very important, right? So busy, your practice being busy does not mean it's profitable. Full doesn't mean efficient, and fine does not mean that your practice is thriving. So question. Why do dentists avoid numbers? And this is across the board that we've seen, right? The first thing is we aren't trained for this. Five years in dental school, how many hours on business? Not in my school. Right? This is the biggest issue we're having. You have a clinical course, and this was me as well, right? Been doing dentistry for the last 19 years. This was me as well. We run to the first clinical course that's there, restorative course, composite course, implant course. But how many of us have spent time learning on the business of dentistry? Right? Numbers. No. So this is the problem, and that's why we there are lots of practices there who are struggling. Second, numbers feel unethical. We need to stop thinking like this. We all run, especially practice owners out there, we run sizable businesses. On an average, half a million turnover, right? You have a responsibility to your team, to your staff. It's very important that you stop thinking that numbers feel unethical, right? Tracking KPIs feel like reducing patients to revenue units. And this is a big one, right? We are afraid of what we'll find. Right? I know we need to track our numbers, but we're just worried about what we're gonna find. I've poured my heart into this practice, but it's actually failing. Nowadays you've got lots of softwares that give you numbers. But the problem is not getting the numbers, it's understanding what you do with those numbers. Right? You have softwares that keep throwing numbers at you. Right? You can open spreadsheets with numbers, numbers, numbers, but what do you do with them? That's important. Right? And this, I relate to this. Did five years of dental school not to look at spreadsheets. Right? So this is what we're gonna do. So we're gonna do this one exercise, right? To start off with, I want you guys to play full on on this. You don't have to share this with me. So, my team, I'm gonna share some sheets with you. What I need you to do is score yourself, okay? This is your honest self-audit. So you've got to score between one to five, right? Now, one means that's not me at all, right? And five means I relate to this, right? So one means that's not me at all, and five means I relate to this. Ah, you'll need pens, right? So share a pen if you'll have one. You'll all got a sheet? We're gonna have a few exercises like this, so get used to it. We're gonna do a few in the next forty-five minutes. Yep. There are some pens here. Once you finish writing, just share that, yeah. Did everyone get? It's not an exam, should take you a couple of minutes to finish. I'm coming to your talk later. Yeah.Interesting. Yeah. Has had a chat with Barry.That's what I told Barry we need to have a chat. Yeah. Good. Some still filling. Don't worry, you just gotta be honest with yourself when you do this. I'm not going to ask you to share this. This is for you to take back home with you.Right?We're gonna have a few exercises like this. The more you play into it, the more you get into it. Right, all done. Oh, thanks. Is there a mic? Yeah, that's fine. Okay, so show of hands, how many of you have scored between zero to ten? That's fine. How many of you have scored between eleven to fifteen? And how many of you have scored between sixteen to twenty? Fairly equal number. And twenty to twenty-five? Cool. Right. So this is normal, right? And this is exactly how these next twenty-five minutes are gonna go. What I want you to do is speak to the person next to you and share with them that one number where you scored a five on. Right? And what and what number in there has the biggest, I mean, the biggest problem you have with? Right? So speak to the person next to you. So anyone brave enough to share what happened? Do you want to share? Do you want to share what what you discussed?Which one?So you feel time is you feel it's too time consuming. Sorry, what's your name?Simon?Simon. You gotta practice? You wanna practice? Okay, fine. Thank you, I'll catch up on that.Right.Good, good, good, good, good, good, good, good, good, good, good, good.Do you want to share?What's the biggest problem? You have no idea. Because you're not trained, right? To the clinical dentist. Good. All right, should we continue? Guys, we've got thirty minutes left. Right, should we continue? Fab. So anyone here wanting to share? No? Should I ask? Dev, which part do you think you struggled with? So where were you a five on?

Speaker 3, 15m 54s:

I was I'm not five on and I mean I wasn't trained. This could be five.

Dr Chetan, 15m 59s:

Yes. But the rest, I think becoming a practice owner changes you. Which is very important. We know each other for such a long time. And the biggest problem most of us face is we weren't trained. Everyone agrees with me on that? Yeah? That's the biggest problem we have, right? And that's why I said I reluctantly became a practice owner. I didn't know that you had to be trained to run the business side of things. I knew I was good at dentistry, but it's a whole different ballgame once you're a practice owner. Fab. So let's go ahead. Next. So KPIs, right? Now on the left we have KPIs. So before when you go to your doctor, your doctor sees you, what does the doctor do? The doctor measures your blood pressure, heart rate, oxygen saturation, temperature, respiratory rate, and then he helps you arrive at a diagnosis, right? He checks all your vital signs, right? KPIs just to make sure that everything's fine. If we as doctors, dentists in the medical profession do KPIs, uh, we have, I mean, look at patients' vital signs to understand exactly what's happening, we need to look at the vital signs of our business as well. All right, very important. So I've kept it simple, right? Over the years, I started looking at different metrics, different numbers to see what works, what doesn't work. And then I realized that with time, we don't need to look at 40 or 50 different metrics. Sorry, 40 or 50 different metrics. We just need to look at five or maybe six metrics. That's it. We don't have to spend hours every week looking at spreadsheets and numbers, right? Leave that to the accountants to do, right? But you need to know a few key numbers, something that helps you keep your pulse on the business. Right? So, for a practice, having an idea of your new patient numbers, case acceptance rates, production per hour, overhead percentage, and patient retention. Right? A doctor wouldn't treat a patient without checking their vital signs. Yeah? So being a practice owner, it's so important you know your vital signs. And what I find that happens most of the time is your gut feelings. How's your practice doing? I think it's doing well. I think it's great. Why? Everyone's happy, no one's complaining, the books are full. I think they're cool. There is some money left over in the account at the end once it's all done. Right? So having some vital signs for your practice is very important. So let's look at the six main KPIs that I think we need to look at. So let's go there. Yeah. So this should give you 80% of the insight you need in your practice. Not 100%, but 80% of the insight you need in your practice. So the first one, new patient numbers. Not only the number of new patients coming into your practice, right? Not only the number of new patients coming in, but where are these patients coming from? Simple. Right? What's your case acceptance rate? You're a practice owner. What is the case acceptance rate of your associates? What's the case acceptance rate for general dentistry, for complex and for specialist level services? What's your production per hour? If you're an associate, great metric to look at. If you're not an associate, it's important, I mean, as a practice owner, to see what your associates are doing. Overhead percentage, this has become more common now than it used to be, just because of the increase in costs these days. Right? Silent killer of most practices, overhead percentage, patient retention, very easy to calculate and very important as well. And finally, team management. Now, what I'm going to do in the next 15-20 minutes is I'm going to go deep on three of these. Yeah. Now, these three are going to make the biggest financial impact in your practices. I'll touch up a little bit on the others as well, but three that I'm going to go slightly deeper into. And if you implement these three, it'll really help your practice.

Dr James, 21m 4s:

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Dr Chetan, 22m 55s:

So let's first look at new patient numbers, right? So it's not only important to check how many new patients come to your practice, but what's more important is to check how many new patients came to your practice and where did they come from. So, on an average across the country, what I've seen is anything between 30 to 50 new patients, again, depending on your type of practice, 30 to 50 new patients per full-time dentist. So uh I have it's a good example. I had a practice that came across, they spoke to me, they said we're spending X amount on marketing, we keep throwing money on marketing month on month. On month, we keep spending a lot of money on marketing, but we're not getting the results that we need. We're not getting the results that we want. So I told them one metric. This look at this one metric that you need to measure, right? Look at the number of new patients you have last month, the month before, and for the last few months. Track and see where they came from. And you know what? It was interesting. They spent close to 2,000 pounds on Google. And look at the number of new patients they had from there. Whereas they had 22 patients from word of mouth and from referrals. Right? What does that say? Anybody? You're doing well?Good quality practice.Good quality practice. Great care. Right? It shows that you're doing a good job with your patients. Great care. Patients like what you're doing. Yes, they trust you. So they're referring more patients to you. So if you know that you're going to get more patients through that, where are you going to double down on? You're going to double down on that service. There's no point you're throwing X amount on marketing, getting one marketing agency and then the next marketing agency and expecting a different result. It's not the marketing agency's fault. The problem is you're doing a great job looking after your patients. So we redirected their budget into a referral program. Right? We doubled down on it. Right. And the only reason, simple reason, right? The only reason they knew about this was the change because of tracking. Right? Something as simple as that. So and this metric is not difficult to calculate. You don't need a software to calculate this. Right. Fab. Next, case acceptance rate. Okay? Another important KPI. And personally, I feel this is one of the biggest predict predictors for your associates mainly. Right? What I find is between 70 to 80 percent routine care should be like a norm. Routine channel dentistry. There's a reason why they've come to your practice. 40 to 60 percent for major treatment, anything over a thousand pounds, implant work, orthodontic work. On an average, you should have between 55 to 65 percent. Okay. Again, this is a real life example of a practice that came to us. They discovered their accepted, I mean, they never measured anything in the first place. Then we said, okay, what's your new patient numbers? They got their new patient numbers. Then we went further down deep. I said, Okay, these are your new patient numbers, you're spending so much on marketing, you're getting patients coming in through the door. What are your associates doing with those patients that are coming in through the door? I don't know. All right, so let's measure it. And when we measured it, we found 31%. Right? So all that money you're spending on marketing, you're getting the patients in, but your conversion rate is only 31%. So we started going deep down into their consultation process. We started identifying what their consultation process is like, right? What are they doing right? What are they not doing right? And small changes, just putting visual aids in, spending more time, listening to patients. It's not rocket science, right? That itself increased it to 54%. Right? And look at the difference it did. 80,000 in anwater production. Right? Small metrics, just small metrics, just small changes can make such a big difference. Right? Again, you don't need a software to measure it. It's pretty straightforward. Right? Start measuring it because let's think about it, right? You'll spend on Monday, you might go in and say, no, I need to increase my marketing budget because I need more patients coming in through the door. Right? You don't need more patients. Look at what you already have and do small tweaks. Fine. Let's move to point number three. Production per hour. Right? Now a lot of people talk about production per hour. Anyone knows their production per hour here? You? You okay, great. More than the norm. But generally, no one measures their production per hour, right? And this is very important. We spend a lot of time talking about production per hour because this goes down into zoning of your diaries and everything. I don't have the time to speak about that at the moment, but I just need you guys to be aware of these topics, right? So as a general dentist or as an associate in your practice, roughly you look at around 200 to 300 quid an hour. If you're doing advanced treatment, 300 to 400 an hour, specialist treatment 400 to 500, 400 to 600 an hour. Right? Now, in this practice that we worked with, their production per hour dropped from 285 to 214. So they were stupidly busy. Right? That was the problem. Right? Anyone came in, okay. You squeeze them in, squeeze them in, squeeze them in. But the problem was by squeezing, squeezing, squeezing everybody in, their hourly rate started dropping. Right? And this can happen like over a year. It's one patient, two patients, if you don't set strict rules to your appointment books or appointment diaries. We went in, we saw this, and a small change again. Restructured their schedule, looked at their diaries, saw exactly what needs to be done, spoke to the reception team, spoke to the booking team, and we changed it. Right? And that one small change, just a few pounds, right? Increase, changed everything. Right? And now obviously you've got to multiply it if you have a bigger practice, five surgery, six surgery, seven surgery, it just multiplies. Fab. Now let's look at point number four. Right? Like I said previously, this is the silent practice killer, and this is a big reason a lot of dental practices these days are struggling, especially the big mixed practices. In fact, I'm seeing it more now in private practices as well, practices that have been there for a long time because they've just been doing things how they've been doing things and they expect a different result, right? So, what do I mean by this? So these are different percentages. What do I mean by 60 to 65 percent excellence? So for every hundred pounds or say for every pound that your practice earns, 60p is gone, so you get to keep 40p for the rest. Right? So if you have that kind of ratio, you're great. But at 80% overhead, then it's a problem. And trust me, that can change soon. Right? That can change soon. For those of you who have practice owner, who are practice owners, you know, remember the time when we didn't have clinical waste bags. Now we have, sorry, yeah, go ahead. Yes. Yeah, definitely. Yeah. Yeah, yeah, yeah. So for those of you, I'll give you a simple example. A practice that we were working with, clinical waste, right? Big practice, they were just chucking the clinical waste in the bin, everything was fine. All of a sudden, the practice owner never checked the bills on his clinical waste because the team was paying for it, everything was fine. It was a process that was happening. But what he didn't realize is in the surgery, there was only one bin, and that was the clinical waste bin. So they took out wrappers, clinical waste bin, everything in the clinical waste bin. What happened? Clinical waste bin. You know how you get charged with clinical waste, right? It's per bags. What also happened was at the end of the day, there were people who were coming in for a couple of hours, three, four hours, just doing a short shift clinical waste in the bin. You were charged per bag. And they didn't realize just clinical waste alone increased by 60%. Right? Something as small as that. Right? But I'm talking about multiple levels, right? The price of running a practice, electricity, gas, all these things have gone up. These are like basic stuff. Forget about material cost and everything. I don't believe you've got to compromise on your material, but it's very important you look at your overheads. Now, we know year on year, for some reason, staff expect a pay hike. It's like a birthright, right? They expect uh a pay rise every April. And if you don't, they either leave uh or you end up in a tribunal. Right? So again, how do you justify giving a pay hike, right? So say I think this year it was 5%. Where do you get the extra 5% in your business from? If you don't have an extra 5% in your business, how are you going to pay your staff extra? You can't just increase your 5% and expect it to happen. It doesn't magically happen. But over the years, every year, year on year, for those of you who have had practices for quite some time now, every year we've had this increase. But has the practice grown similarly? Right? So things like this creep up slowly and they start eating away on your overheads. Right? Smaller practice, it's great, you have more control, you have bigger practices, then it's an issue. New equipment, we all love our toys in one form or the other. Um you buy them without understanding the impact that it's causing on your revenue, it makes a big, it makes a big um, it can be a big problem. Right? Your staff come and tell you you're just giving us too much work, there's just so much work, constantly you're throwing work at us. All right, let's hire some more staff. Right? But it's not as simple as that. So just from 78% to 63%, right? From a struggling practice to a thriving practice. Small, just a small difference, right? But again, it depends on your turnovers. Like I said, most practices on an average are a half a million turnover to whatever numbers, right? So they can make a difference. Fab, let's move to number five. Number five is patient retention, right? And I tell this all the time: there's no point spending on marketing if you have holes in your bucket at the moment. You're losing patience constantly. There's no point spending anything on marketing, right? You could spend and spend and spend, but if you're losing patience on the other end, it's not good, right? And this is important, right? It takes it costs a lot more to attract a new patient than to retain an existing one. A lot more, right? Plus, it's a new patient who's coming in. You've got to build trust with this patient, plus you're spending on marketing, right? So I call this the leaky bucket problem. So again, a practice who I was working with before we started tracking, so we did the tracking retrospectively, they were getting 14 new patients a month. It was great. So the first metric that I spoke to you about, new patient numbers, great, 14 new patients a month, right? But what's the point having 40 new patients if you're losing 35 patients a month? Right? And then so the net growth was five. They increased their retention rate. You can use this on different metrics: your hygiene, your general dentistry, and other treatments. But if you lose, if your retention rate's low, your growth's low. So they sorted their retention rate out, say marketing budget, they managed to increase their numbers. Okay, again, it's not complicated, it's simple. You don't need to do it as practice owners. Get someone in your team to do it. It's simple, just delegate it. Delegate it to somebody in your team and just tell your team, tell them that this is what I want. Can you do this for me and give it to me in a week's time? It throws a lot of information. Finally, team engagement, right? Now, this is an interesting KPI. This is not a financial KPI. This is not a financial KPI. Anyone here knows what the NPS is? Except those people who came on the DPN. Sorry. Yeah, what is NPS?Net NS.That's correct. Anybody else for the PNS? Brilliant. Net promoter score, right? Lots of big companies, they have an NPS scoring system. An NPS scoring system tells how likely you are to refer that business or company to somebody else and how loyal you are to that business. Okay, question here. What's an E NPS? No. ENPS. Anybody? No. Employee net promoter score, right? It's how likely your employees are to refer your business as to somebody else as a great place to work. Right? That's an E NPS scoring. There's a system behind it. You can Google it, don't overcomplicate it. But ask them one simple question. Right? On a scale of 0 to 10, how likely are they to recommend our practice as a good place to work? Keep it anonymous. Right? And be ready to face criticism. But like it's better of the devil you know, right? Then you don't know. So again, a big problem in a lot of practices, high staff turnover. Right? It's more expensive, it costs you more to get a new staff member than to retain your old staff member. It's not that one pound increment, right? You've got to take into factor uh into consideration the time, the training, right? Yeah. So team engagement, this is great. I mean, so important if you have to build a big team, right? And a good team. At the moment, I have 132 staff members who work with me and 36 dentists. This was one of the most important things that helped change, create the switch for me in my practices. Right? And we regularly do this. We regularly do this. Right. Ready for the next exercise? Now, again, I'm going to distribute some worksheets with you. Now, on these worksheets, what I would like you to do is you've got three minutes. Just three minutes. For each of you to write your six KPIs. Right? Listen, it doesn't have to be perfect. Again, I'm not going to ask you to share it with me. But this is for you guys, right? For you guys to keep. Write down your best guess, your best guess at your own number right now. If you genuinely don't know one, just put a question mark next to it. Right? The whole idea of this exercise is not to know your numbers, but it's to know those question marks on it. Right?Are those percentages all from your practice or are they from your own?It's from no, it's from my not my practices. So I work with lots of practices. So I've been 164 practices across the country. So those are because industry numbers can be skewed. Yeah. So I prefer to use my data. Right. So we got three minutes. We're almost there, we should be done in the next ten minutes. You might as well put a question mark on it. Right, hands up if you have one question mark. One question mark, hands up. Two question marks? Great. Three question marks. Four. So most of you all know your numbers well. Fine. But the reason for this exercise is like I said, I'm not going to ask you to share your numbers with me. But the whole idea is you need to understand these six metrics. Right? There's no point you doing it if you know, running a practice if you're not aware of these numbers. Fine. So this is what I propose to you guys, right? Just keep it simple. You don't it, it doesn't have to be too complicated. Just have on your practice dashboard one page, six numbers, and update it monthly. It doesn't take you long. Five minutes weekly, twenty minutes monthly, and thirty minutes quarterly. That's all it does. There's six numbers. And listen, you don't have to sit down with the spreadsheets and write the numbers. Delegate to it to your team and expect your team to do it for you, right? Decide on a date and a time when you want them. This is less time than scrolling social media, right? It's quick. And what's the benefit, right? You get complete clarity on your practice health. You know exactly what's happening, at least 80% of what's happening, right? Look at the risk to reward ratio, right? Fab. This is one thing I want to touch up on quickly, and this is what a lot of people think, right? Knowing data corrupts your ethics. It doesn't. It protects them. Again, if you don't track, what I see happen most of the time is people trying to over-treat to boost production, they start pushing unnecessary procedures, procedures that they don't need to do. Cut corners and materials, rush appointments, reduce staff regardless of care impact. But once you start tracking your numbers, remember what I said in the beginning. It's alright to know your numbers, but you need to understand what you're going to do with those numbers. Right? And this is what I've seen with practices that we've worked with, right? Time and time again. They improve how they present their treatment. They start scheduling their books more efficiently, they start zoning their diaries more efficiently. They invest in better systems and the price fairly for value delivered. Now, without data, you make desperate decisions in crisis mode, and that's usually when I get a phone call. When people are in crisis mode, right? And common trend, no data. Now I'm not asking you for data that the MPC, for those of you who have exactly, that throws out, right? Again, you need right data, you need correct data, right? Because your your decisions are only as good as the data you get. Right? With data, you can make principal decisions every time. Listen, it doesn't have to be complicated. This practice that we worked with, we we spoke on all those six metrics. We changed their overhead cost from 78%, we reduced it to 63%. We increased their production per hour by 28%. Case acceptance increased, and their ENTS scoring increased as well. But look at the difference it cost, right? But it was not by working harder, but by making better decisions. Right? Six KPIs, better decisions, job done.