Build A Moat

May 24, 2021
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The upheaval some have been predicting is upon us.  Surely, you recognize the signs; higher prices for nearly everything, gas lines, a wildly fluctuating stock market, wild crypto and other currency swings, bad news internationally and an acute lack of trust in our leadership.  All of this on top of a Pandemic which has caused a collective case of PTSD.

Worries about inflation, underemployment, business closures and other economic canaries in the coal mine seem to portend a lessthansmooth road ahead.

And just when you thought it couldn’t get worse, something else hits the fan.

What are you to do?

Jim Collins in his book “Good To Great” refers to a strategy he calls the Hedgehog Concept.  I prefer to think of it as the Castle Principle.

The overall strategy is to build a MOAT around the things that matter most and that are within your control and/or sphere of influence, so you can protect and defend them against the upcoming onslaught.

Here are a few tactics that you might consider deploying.

1. Solidify and protect your assets:  make sure that what you have cannot be taken away (read about the real danger for this below).
2. Value your Assets:  Make the most of what you have. Stop spending time and money on risky growth or irrelevant strategies.  There will be a time to do this, but not just now.
3. Diversify: I’m not referring to your portfolio (although that might be smart too), I’m referring to your offerings, services, products, and your market.
4. Focus on what’s working:  that means that if you have gotten great results from a specific marketing campaign, double down; do more of it until it stops working.
5. Build a war chest:  Keep a reserve of everything you might need for your business; cash, supplies, toilet paper!
6. Keep your employees happy!  Now is not the time to be looking for new employees.  Keep those you have engaged in the business and with your vision.  Invest in their growth.  And keep recruiting always!
7. Keep your patients connected:  Don’t take them for granted.   They are your business.  Engage them in as many ways as possible and as often as possible.  Be their advisor, friend and even confidant.
8. Focus on OUTFLOW:  Expenses and timewasting activities can easily and silently creep up.  In particular, know your tax burden, which might not be apparent until the accountant gives you the “bad news.”  By that time, it’s too late.  Seek out a proactive tax strategy now.
9. Build a War Council: Get a team of advisors whom you trust to help you.  There’s no way YOU can know or do everything yourself.
10. Keep a vigilant eye on the METRICS:  watch all the numbers and pay close attention to changes.  They might reveal a trend that requires adaptation.

The MOAT you build will protect you, slow down erosive factors but will not totally shield you.  The wider and deeper your moat is, the better.  Having a toll or drawbridge into your Kingdom can help control the flow in both directions.  The higher the toll, the longer the bridge, the better too.

Many younger practitioners have no idea of just how tacky the road can be.  Some might have been around for the 2008-10 deluge, but few were in practice in the late 70’s as I was.

Dentists were particularly impacted by both events.  The skyrocketing costs in the 70’s entirely changed restorative dentistry, as it prompted research into materials to replace gold.   Still, because the costs of practice (overhead) hadn’t yet skyrocketed and insurance dependence didn’t come close to current levels, dentists survived.

The financial discomfort of 2008-10 was substantial because the profit margins had shrunk, insurance dependence became the norm and student debt grew substantially.  The result?  Bankruptcies skyrocketed. Even my practice was flat in 2009!

Experience can be a harsh teacher.  It’s better to learn from others’ painful experiences rather than personally feeling the pain.  Unless you’re a masochist.  Then, ignore the above.

Plus, there’s a new looming catastrophe awaiting dentists.  Uncle Sam (Joe) has plans to double the size of the IRS.  Guess who they’ll be coming after?

Remember the pass-throughs that you enjoyed?  Remember the car, the home office, the paper toweling, Ibuprofen and other items bought for “office use”?

These and MORE are what the IRS will be looking to take away from you.  With a penalty to boot!

Too bad your moat won’t be able to keep Uncle Sam from knocking at the door of your castle!

Want to know how YOU can build or expand your moat?  

Want to learn how to implement some of the aforementioned strategies?

Want a shoulder to cry on?

Book a strategy session today.

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To Your Excellent Clarity, Success and Moat Building,

Michael

Practice Success Insights

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Dr. Michael Goldberg is one of the leading educators on dental practice management in the United States.

Michael ran and sold a prestigious group practice in Manhattan and has been on Faculty at Columbia University and New York-Presbyterian Medical Center for 30 years including Director of the GPR program and Director of the course on Practice Management.

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