Just like any other small business owner, as a dentist the profitability of your practice is impacted by the state of the economy.
That’s not to say that your practice can’t be profitable in a poor economy—it can be. And it’s important to understand that it is your local economy that matters, not the state of the economy in general.
One of your jobs, as the leader of your practice, is to keep your finger on the pulse of the local economy. It’s essential that you do this, because your marketing strategy should vary significantly depending on the state of your market. When unemployment is high and families are cutting back on their budget, pushing expensive procedures that are largely cosmetic will likely be ineffective. You’d be better off emphasizing the value that your practice provides.
So, aside from watching the news at night before bed, what should you do to stay up-to-speed?
Below are three suggestions:
1) Network with other business owners. Following the stock market and reading the Wall Street Journal may give you a sense of what’s happening across the country, but it won’t tell you anything about your market. Talking to other business owners in your city or town, on the other hand, will. Ask how they’re doing, what their challenges have been, and what they expect over the next several months.
2) Watch your local real estate market. One of the best indicators of the strength of your economy is the housing market. If you are seeing “for sale” signs go up every day, and very few come down, chances are your local economy is still far from a recovery. As houses sell and new residents move in, you can expect your economy to strengthen.
3) Talk to your patients. Ask them how things are going. Most patients want to talk with their dentist—they’ll let you know if they’re worried about losing their job or about paying the mortgage. Of course, you can’t draw conclusions based on a small sample size, but if you consistently chat with your patients, you’ll have a good sense on the economic state of your town.
I know, I know—you didn’t go to dental school to be an economist. But the reality is that the state of your local economy plays a major role in the success of your practice. So pay attention!