In dentistry, failure doesn’t mean going out of business. By our definition at Levin Group, a practice that is failing is a practice in steep decline. Steep decline has ramifications such as doctors working many more years, not having sufficient income for their current lifestyle, or not taking advantage of retirement funding opportunities. While most businesses have an occasional down year, ongoing growth is necessary for keeping up with increases in overhead and inflation. Why do good practices start to fail?
1. Complacency.
Good practices often become complacent simply because they are good practices. They have no sense of concern that the practice needs to be improved on a continual basis. This is a mistake. Even if the practice is doing well, it doesn’t mean that continual improvements should not be put in place.
2. Not knowing numbers.
You need to know the current state of the practice, and it is best if there are key performance indicators (KPIs) for each practice area. Many dentists know production or income, but they do not know the KPIs that reveal where they might be weak. Practice leaders should consider the following:
- Are there enough new patients coming in?
- Is case acceptance at the right level?
- How high is the no-show and last-minute patient cancellation rate?
- How much time is being spent for each procedure?
- What technology could improve efficiency to improve performance?
These are questions dentists should be asking themselves on a regular basis.
3. Disruptive team members.
It only takes one negative team member to bring down an entire team. It starts with negativity, then goes to gossip, and then goes to cliques, with some staff members not even speaking to each other. Practices with this type of degradation of teambuilding will inevitably suffer. Don’t be afraid to replace a team member who has a disruptive or toxic personality. The damage being caused by these individuals can often outweigh the pain and suffering of replacing them.
4. Not monitoring cash.
There’s an expression I have used in many seminars, “If you have enough cash, you will always be fine.” This statement brings forward the idea that cash can help a practice build a fortress of protection around itself so that it doesn’t have to worry about paying staff or bills. One example of how not having enough cash on hand can be problematic is the situation of one of our clients. This particular client purchased a number of expensive technologies without any financial or cash management analysis. After a slight downturn in revenue, this practice is now struggling to keep up with overhead and expenses. The average practice needs enough cash to last at least 12 months.
5. Poor customer service.
If your customer service does not range somewhere between good and exceptional, you need to address this immediately. We have seen many practices that had a deluge of patients leaving before they realized that there was an issue, often at the front desk. Treating patients abruptly, being inconsiderate, or pushing inconvenient appointments all lead to patients seeking other dental practices for themselves and often their family.
6. Not monitoring overhead.
One thing we can guarantee is that overhead will increase. It is simply the nature of business and economies. Unfortunately, with many insurance companies not increasing reimbursements and some even lowering them, overhead becomes more challenging. You should track your overhead percentage against national averages and then work to reduce it on a consistent basis. Depending on the practice, overhead can be reduced approximately 4% to 8%. Just remember, if overhead rises faster than revenue, the practice will enter a downward spiral financially.
7. Lack of a strategic planning.
Dental practices are not Fortune 500 businesses that need high-level strategic planning. But most practices do need to take time to think about where they are going. They might consider adding a
new service, changing labs, increasing the number of new patients, improving customer service, or adding a team member. These are a few of the key questions that need to be asked on a regular basis. The staff wants transparency and the opportunity to provide input toward improving the practice, and this can happen as you identify strategic opportunities.
The failure rate of dental practices, as I defined in the introduction, is increasing. The seven areas of potential failure outlined in this article can be a checklist to analyze your own practice and determine not only where you stand today, but what actions will ensure that you continue to be successful tomorrow.
About the author
Roger P. Levin, DDS, is the CEO and Founder of Levin Group, a leading practice management consulting firm that has worked with over 30,000 clients to increase production. A recognized expert on dental practice management and marketing, he has written more than 60 books and over 4,000 articles and regularly presents seminars in the U.S. and around the world. In 2025 Dr. Levin received the Fauchard Gold Medal from The Pierre Fauchard Academy for his contribution to dental practice management. To contact Dr. Levin or to join the 40,000 dental professionals who receive his Practice Production Tip of the Day, visit www.levingroup.com or email rlevin@levingroup.com.
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