THE MOST DANGEROUS NUMBER IN BUSINESS IS? | Dental Blog

So what is the most dangerous number in business? Well read this quick story and have a guess, this could be the most important article that you read this year.

Over the last few months, we have seen an influx of Dentists joining our Two Day Ethical Sales & Communication Programmes; All these Dentists and Practices have one thing in common; they all want to improve their sales of Private Treatment. They are all NHS Dentists, still committed to providing this type of treatment, but have realized that because of the cut backs, the fact that there has been no pay rises for a while now, that if they don’t start increasing private income, then they are going to struggle to survive.

This really hit home to me when I delivered a workshop to 61 delegates in the Midlands, of which 18 were Dentists. There were some very long detailed conversations about how much income of their income was attributed to the NHS and how much of their treatment was delivered privately. The average was around 95% NHS and in some cases it was closer to 99%. This really brought home to me one of the most important business lessons I discovered many years ago. It is the most dangerous number in business.

So what is the most dangerous number in business? Well read this quick story and have a guess, this could be the most important article that you read this year.

No this is not about numerology or some woo-woo nonsense like that.

I’m talking about a number that can make businesses/Dental Practices brittle.

That is the number 1.

Let me share with you some examples;

In the above example, although it may seem that the above Practices have thousands of patients, they are in fact all supplied by one major customer and of course that is the NHS. The NHS provides well over 95% of their income
Does your Practice rely on one major source to supply you with new patients?
If you are a referral Practice, do you have one or two major referrers? Do you have the 80/20 rule? In other words over 80% of your new patients are supplied by 20% of your referring Dentists.
Do you rely heavily on one team member?

To borrow a computer system term, does your business have “a single point of failure?”.

If so, your Practice is relying very heavily on a single source and a small change in circumstances outside of your control, could have a devastating effect.

That’s a very tough situation to end up in.

I know of my friends who run online businesses. They were hit hard when Google changed its search engine algorithm. These businesses put all their marketing budget and effort on search engine optimization and literally overnight found themselves with no other source of leads.

Similarly when Google started to make changes to the types of paid ads it wanted to show, even advertisers who were paying Google enormous amounts of money each month were hit with the “Google Slap”. That is Google started to charge them four, five, sometimes even ten times as much as they did previously. This change forced the advertiser to stop their campaigns and try to fix the issue or find another source of leads. In the meantime their business virtually stopped.

You have to Build Your Practice on a Solid Foundation

If you look at how new houses are built. The builder’s fist digs big foundations, and houses are then built on a rock mass instead of on sand. That way when the storm inevitably comes, our houses don’t cave in.

So what can you take away for your business?

The first step is to identify any scenarios where the number 1 can potentially hurt you. Here are some examples:

What if your largest referring Dentist leaves you for a competitor, or they started delivering the treatments themselves. These are treatment that they previously referred to you?
What if there is a change of government legislation, particular towards the NHS and there was more cut backs and no more pay rises?
What if your main advertising strategy stops working?
What if your advertising costs rise dramatically?
What if your currently high search engine rankings disappear or pay per click rates rise sharply?
What if a key member of your team got knocked over by a bus?

All of these scenarios can and do happen.

If you rely on one of anything, you are leaving yourself in an exposed position – you’re effectively building your house on a sandy foundation. When the storm comes and the floods rise, the house is going to collapse.

Identify and eliminate single points of failure in your practice and do it now.

That way, if the laws change, if the advertising rates go up, if all of a sudden one specific strategy stops working as well as it used to, your business will be safe.

The late great Jim Rohn had an excellent philosophy on the matter:

“You’ve got to think winter in the summer. It’s just too easy to get faked out when the sky is blue and the clouds are fleecy. You’ve got to prepare for winter because it’s coming, it always does.”

In the meantime, even if none of these scenario’s come to pass, at least you’ll have built a more resilient and valuable Practice that will give you a good night’s sleep.