Last week, I actually suggested that a dentist declare Bankruptcy.
In over 40 years of advising dentists, I have never had to give such advice. It made me feel sick to my stomach. I nearly wept. And, I was mad as heck.
I hate seeing people being taken advantage of.
This wonderful, smart, though overly trusting dentist was taken advantage of, given bad advice and lied to by multiple people. I’ll call her Dr. GG (for Good and Gullible). I could write a book on all the mistakes that were made but here’s the short version.
THEY LIED TO US
The really big lie was by the dental school and professional establishment. It’s still being told. They lied by telling us all that being the best dentist, learning all there is to know, and continuously improving our skills and knowledge base, would be assure our success.
Boy, what a bunch of BS that was and still IS!
Dr. GG bought into that lie hook, line and sinker, and attended every CE course and symposium she could. She even attended an expensive and time consuming “mini-residency” half way across the Country, leaving her practice and her family for extended periods of time.
Sometime during her frequent junkets for CE and attending to her practice, her marriage fell apart.
Now, a single parent an “amazing opportunity” arose. Dr. GG was advised to open a second practice location by purchasing a “guru’s” practice across town. It was touted as “the opportunity of a lifetime”.
The bank lent this exceptionally trained doctor the money to buy the guru’s practice. At the same time, others lent her money to expand and renovate her primary practice.
The “guru” too was a great dentist but had no business acumen. There were no systems in place and might even have been the victim of embezzlement. He sold his practice to Dr. GG for a “guru” price, which among other financial flaws, didn’t support the possibility that 25% of the practice would not transfer.
And that’s exactly what happened. The guru left and so did most of the staff. The practice’s revenues went down over 25%. Maybe the staff were worried that the embezzling would be recognized and/or stopped?
Plus, Dr. GG’s attorney who negotiated the sale and the new lease failed to protect her interests. It turned out that some of the equipment in the guru’s office was owned by a third party!
OMG, what a mess!
Now, Dr. Good and Gullible is in the hole for way more money than her cash flow can meet. She is hemorrhaging cash.
So, her banker suggested that she take out yet another loan to “consolidate”.
How do you get out of such a hole?
The first step is to STOP DIGGING!
I wish I didn’t have to give Dr. GG the “B” advice. I hope never to have to do it again.
Please don’t make the mistakes Dr. GG did.
Here are 6 RULES that can help you avoid Dr. GG’s fate.
- Stabilize and Optimize what you have before you Expand.
- Make sure you get a decent ROI from all of your investments, including those related to the time, effort and money spent on CE.
- Never go into debt without a clear and secure pathway out.
- What you focus on will grow, what you ignore will GO (like a marriage).
- Don’t trust a Practice Broker who represents both seller and buyer.
- Always ask for advice (and if necessary, pay for it) from a disinterested and trustworthy 3rd party. And, the sooner, the better.
Practice Perfect Systems helps Doctors PLAN so they can avoid digging themselves into a hole and can strategize ways to get out of holes too. We much prefer the former!
Contact us at: email@example.com
To everyone’s excellent success,
Michael, Laurie and the PPS team.