The Cost of Failing to Plan

Most of you have heard the adage, “If You Fail to Plan, You Plan to Fail.” Just as many of us fail to take the time to plan any major decision, we also fail to understand the cost of this failure to plan.

Let’s face it. Whether consciously or unconsciously, none of you got to where you are today without planning. And the better the plan, the better the outcome. From the time you were children, many of your parents “planned” on making certain you could get into college and beyond. Their plan included saving for future college expenses (or at least they tried to) and encouraging you to get good grades so you would qualify for entrance. If they didn’t already know it, they quickly realized the better your grades, the more quality colleges would be willing to accept you, and furthermore, better grades made you eligible for scholarships to help with the financial cost. Subsequently, various methods of encouraging good grades were written into their plan.

As you got closer to graduation from high school, you began getting actively involved in the planning process. You began selecting and applying to various colleges. You began thinking about long-range careers. Because many of you were already looking at dental school with a career in dentistry as your endpoint, once accepted into college, you began planning your schedules to include the necessary predental curriculum courses. For some of you, a “failure to plan” dentistry as your final career during your early college years resulted in the cost of both additional time and tuition to obtain the necessary required pre-dental courses.

Finally, you were accepted into dental school. You immediately began new plans. All of your focus, time and energy were now directed at planning how you were going to pay for each semester’s tuition and how you were going to complete the requirements for graduation. Towards the end of your dental school experience, in an effort to finish your educational requirements, many of you began to look for and made plans to attend various GPR’s or Specialty Training Programs.

Graduation day comes, and now there is a new question:

“What’s next?” This is where failing to plan gets needlessly expensive.

Planning Mistakes

Why do people fail to plan? There are four primary reasons: procrastination, excessive time demands (too busy), perceived complexity of the planning process and failure to fully understand the cost of not planning. Procrastination is beyond the scope of this discussion. The busiest people are typically the most productive and successful people. And they attribute much of that suc-

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cess as the result of their planning. These successful, busy people have learned that planning need not be complex or take a lot of time, if a few simple guidelines are followed.

Whether graduating from dental school or some other post-dental school training, for many, in their final year of career education, future career planning stops or significantly slows. All of the new dentist’s time and energy is focused on just completing their requirements, graduating and passing their boards. However, planning is in and of itself a lifelong process involving every aspect of our lives. The timing of when the planning is done (how far in advance of the need should plan formation begin) is sometimes just as important as the plan itself.

The first mistake many have is not having a system for handling and developing an organized plan for major decisions or goals. Once identified, a practical plan and timetable is never developed. If some kind of a plan is in fact developed, the timetable is not followed.

When the anticipated deadline arrives, the emotional and financial crisis begins. The further in advance of the desired outcome the plan is made and followed, the better the outcome. Plans formulated and developed during a crisis rarely have adequate, the same, or better outcomes than those plans developed long before the deadline and subsequent crisis.

What are the Planning Failure Costs for New Dentists?

The two most important costs of failing to plan (or thoroughly plan) are typically both emotional consequences and financial. The level of severity is directly tied to the magnitude of the subject. We have all experienced the stress of something not going according to plan or because there was no plan. The level of stress can vary from a mild annoyance to an all-out psychotic breakdown or stress-induced heart attack. Dealing with the emotional costs is not the intent of this discussion. Readers will need to seek their own counseling for that subject!

their post-professional school employment to begin the preparation process for practice ownership. As a result, ownership is delayed, sometimes for years, while the new dentist makes necessary preparations. The average practice owner earns 3-4 times as much as an employeeassociate dentist. Subsequently, by the most conservative estimates, the ultimate after-tax net income loss as a result of delaying ownership is a minimum of $10,000 per month.

The two most important

costs of failing to plan

(or thoroughly plan)

are typically both emotional consequences

and financial.

What I want the reader to understand and have is a better picture of the financial costs of NOT planning. Many times a very minor detail in a plan can save us tens of thousands of dollars later. As an example, while building my own dental practice facility many years ago, my architect pointed out that moving a one-half inch line on the building plan now would cost about $20,000 less than moving the wall later because the wall was in the wrong place, along with the plumbing embedded insidee.

Instead of planning, securing employment effective one month after graduation and entering practice ownership as soon as possible, we all too frequently observe a different than desired outcome. The new graduate, beginning the search for employment after taking a month (or several) off post-graduation to celebrate the end of their college careers, eventually faces financial reality. Beginning the search for employment a year earlier would have taken virtually no time from their schedule.

The first major failure to plan that we see with new dentists is related to post-dental school employment. Henry Schein has a dental placement division for dentists seeking associates and associates seeking employment opportunities. Of the approximately annual 5,500 dentalprogram graduates, this division receives approximately 1,500 applications from new dentists seeking employment.

From a practice purchase perspective, most lenders feel comfortable lending the necessary funds for practice acquisition and/or startup practices within one to two years post-graduation. Based on the successful history of tens of thousands of dentists, it is their belief that the new graduate has the required skills to own and operate a dental business. However, we are seeing increasing numbers of new dentists postponing practice ownership for 3-7 years post-graduation. Using the above $10,000 per month, this represents a post-tax income loss of $360,000$840,000.

So, what is the problem? The first problem is not planning for post-graduate employment in a timely manner. These applications come in from May to August of the graduation year. Typically, however, it takes six or more months to locate an employment opportunity. Therefore, these new graduates are even further financially crushed after graduation because of their lack of employment, and/or they accept less than desirable employment opportunities in locations where they do not want to practice just to have an income flow.

Simple Planning Process

Whatever the subject or project, the first step is to write it down as a goal. Personally, I maintain a file marked Goals and Plans (currently on my computer desktop). As soon as the goal is written, the second step is to assess the timing for its completion. The third step is to list any known major steps required to completing the goal and prioritize based on the timing. Next, list a rough timeline assigned to the necessary steps to com-

The second primary planning problem I have observed over the past 20 years relates to planning for practice ownership. Many new dentists wait until well into

plete the goal in a timely manner. This initial entire process should take less than five minutes, even for a major goal such as the acquisition of a dental practice. The last step is to mark your calendar relative to when you must come back to your plan to begin work on the details and put the plan into action.

clinics directly in desired community 3. Assess personal financial needs to determine bare minimum required compensation: Timing - Prior to first interview Next plan review date: Aug. 1, 2014

Example:

Goal: Post-Graduation Employment

Desired Start Date: Aug. 1, 2015 Anticipated Time Required to Accomplish Goal: 12 months

Steps: 1. Identify City/State desired: Timing Immediate 2. Post Resume/Register Availability: Timing - 6-12 months prior to desired start date

Timely Planning is Key

This discussion was not intended to be an exhaustive discourse on planning. It was designed to point out an expensive problem for many new dentists. That

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a. Notify local dental supply compaproblem is a failure to have at least minimal planning regarding their post-graduate employment and post-graduate practice ownership needs/desires. Planning does not need to be complex. However, these two major goals for most new dentists does require a timeliness of action, or the resulting costs can be substantial as a result of delay and implementation.

nies of availability b. Post availability on employment

job boards/websites c. List availability with dental recruiting companies d. Contact individual dentists/dental

Dr. Eugene W. Heller is the VicePresident of Professional Practice Transitions, a nationwide dental practice sales and consulting organization. He can be reached at 1-888-477-8552.

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