Although Google is by far the dominant search engine, Yelp is now number two in online reviews in terms of search importance. And as my last blog post outlined, because of new strategic alliances, Yelp most likely will start closing the gap. Here are my thoughts on how to take maximum advantage of the new dynamic.

Go to yelp.com and complete your Yelp profile for your dental practice.

Start accumulating Yelp reviews from your patients. I was simply amazed when I compared Google search results to Yelp results for a dentist in a geographical area. Dentists who are high up on the local Google business page often don’t even show up on Yelp. Currently there is a big disparity here. Translation- there is a huge opportunity here.

Yelp reviews are easier to leave than Google reviews. Yelp allows any email address to be used during sign up. To leave a Google review, you need to have an existing  gmail account or have to set one up  – a major obstacle for the typically technologically-challenged individual. You also now have to join Google+Local before you can leave a Google review.

Yelp only displays the reviewer’s first name, last initial, and city.  Under the new rules of Google+Local, the reviewer’s full name is required. While this is a positive step in reducing the number of spam reviews and also the reviews by persons attempting to damage the reputation of a legitimate business, it may also be perceived as a deterrent for some people to leave a review.

Without question, local reviews are directly correlated to the success of any business. I recently read that 90% of all buying decisions – and choosing a dental practice is certainly a buying decision – are made on the Internet. Even if someone is merely validating a personal recommendation of your office,  what others are saying about you online often will seal the deal.

So continue to ask your patients for Google reviews – but in order to cover all of the bases and increase your visibility on the web,  it really is time to make the accumulation of Yelp reviews an important priority. That being said, I must warn you that I have received an inordinate amount of negative feedback from dentists all around the country regarding Yelp. In my next post, I intend to share those comments with you, and go into greater detail about the legitimate concerns we as dentists should have about online reviews.

The ultimate status recognition for a company is when its name becomes a verb. When we copy something, we “Xerox it”. When we overnight mail, we “Fedex it”. And when we search for something, we usually “Google it”. Google is hands down the dominant search engine – and by a large margin. Full disclosure – I used Google to research this information. And I have written numerous blog posts on the importance and benefits of a dental practice securing Google reviews.

But a flurry of new business activity has definitely started to modify my thinking. Yelp recently signed a deal with Bing, the Microsoft search engine, in which Bing will now display Yelp reviews and ratings similar to Google+Local. Apple also recently announced a departure from Google Maps, lending even more importance to Yelp, as Yelp reviews and ratings are already factored into Siri search results. Siri is Apple’s phenomenally intuitive voice activated assistant app.

Apple’s new mapping software will be featured in all iOS6 devices, from iPhones to iPads. Apple’s share of the mobile device market is extraordinary. In just the first Quarter of 2012 alone, Apple sold 37 million phones worldwide!  Their mapping software will display local businesses similar to Google Maps. However, Yelp reviews will now be displayed and given preference in search results.

Because of these new strategic alliances, I anticipate that Yelp will be playing a larger and more prominent role in search results rankings. So while Google reviews are still important and desirable, and a dental practice should still continue to make the effort to accumulate them, Google is no longer the only game in town. My recommendation is for dentists to begin gathering reviews on Yelp prior to the launch of Apple’s new iOS anticipated in October of 2012.

Next time – I will discuss the mechanics of accumulating Yelp Reviews.

I work as a management consultant to the dental profession,  primarily coaching and mentoring doctors in general practice. One of the reasons I am hired is to help doctors who have plateaued  begin to increase revenue again. There are only four basic ways to do this: increase fees, increase hours, increase the frequency that patients come to the practice, and offer more services. Let’s talk today about offering more services.

I recently attended a two day seminar for Six Month Smiles. The course provides hands on learning for “short term orthodontics” which is defined as cosmetically focused orthodontic treatment performed in less than nine months with aesthetic brackets and wires. The average general practice is loaded with adult patients very unhappy with the way they look because of crowding, spaces, or protruding teeth. These patients will usually not agree to undergo conventional orthodontic treatment because of the length of treatment time and metal braces. Six Month Smiles offers a great alternative to conventional orthodontics–it is conservative,  affordable, and quick – and you won’t believe how easy it is to learn. It is also  a great opportunity for a dentist to change people’s lives while significantly increasing revenue.

The course material was very well presented. Attendance is limited so you get as much personalized attention as you need. I would say that the majority of the doctors at the course were frustrated Invisalign providers who literally embraced the differences: faster tooth movement, lower lab fees (about one third of aligner therapy), much more control of the case, no compliance issues, and no endless “refinements”. A wonderful benefit is the Provider Resource Center where eighteen clinical mentors assist in online dentist to dentist case support. If you post photos and models, you will get opinions and guidance often that same day.

Five of my clients attended the seminar in Boston. Less than two weeks later, between them they had started eight cases! That is pretty amazing. If you are a restorative dentist who loves to create beautiful smiles and has an ability to visualize cases, this ortho technology will be a fabulous addition to your armamentarium. You will quickly be able to move teeth into proper position so that bonding, veneers, and more traditional crown and bridge or implants can now be performed.

I have not done clinical dentistry for 16 years, happily spending my days now as a management consultant. But I can tell you–as I sat through that course–and saw the amazing results that could be created–it was the first time that I was a little bit nostalgic as I was thinking how much fun I could have as a clinician again! So please do yourself a favor and check this out. Orthodontics does not have to be a mystery any longer.

Google continues to call the shots on local search marketing.  After most of you were finally getting comfortable with the mechanics of marketing your dental practice using a Google Places listing, Google has changed the rules–again!!  Less than two weeks ago–with no advance warning–Google introduced Google+Local, and literally overnight about 80 million Google Places Pages were replaced by Google+Local Pages. Google Places, the brand, has migrated to Google+Local, lending itself to more social interactions through Google+Pages. Most of the features you’ve grown accustomed to will remain, including the Places dashboard where you can upload photos, add contact information, and post-patient reviews. All current reviews that you have worked so hard to acquire will also transfer. Good news there.

But Google completely changed up its review system with a two component rating scale developed by Zagat (Google acquired Zagat about eight months ago). First–the individual review rating which previously was based on five stars is now based on a scale of 0-3: 0=Poor;1=Good;2=Very Good; and 3=Excellent. The most noticeable difference is the way that your reviews appear. Each individual review will now also display the full username associated with the Google account of the reviewer. This change should help reduce the number of spam reviews and also the reviews by persons attempting to damage the reputation of a legitimate business. The second piece of the  new rating system is the overall score which is now a composite score of 30 possible points. This breaks down in the following way: 0-10=Poor; 11-15=Fair to Good; 16-20=Good to Very Good; 21-25=Very Good to Excellent; and 26-30=Extraordinary to perfection. Also under this new system, reviews that Google has identified as helpful–both positive and negative–will remain closer to the top of all the reviews posted – despite their age. Under the old system, reviews were listed in the order they were posted.

I would offer three suggestions. First–continue to solicit quality reviews from your patients. They are more important than ever to the success of your business with this new system of local ratings. Second–contact your Webmaster immediately to help you to set up a Google+Business Page. Every business will be forced to have a Google+Business Page (just like Google Places). You may choose to wait and Google will create one for you, but I would suggest creating one now using the same email address as the Places listing. Third -be sure to have your webmaster  install a Google button on your website that encourages patients to leave reviews (here is the link to mine), and make sure that it is linked correctly to the new Google+Local Page where reviews can be written.

My last three blog posts have discussed some of the issues to be aware of regarding the valuation, financing, and timing of dental partnership transitions. I would like to finish up this series with some thoughts on additional stipulations that must be included in a partnership agreement. These are incredibly important, and probably where the most time–many meetings and discussions- needs to be spent when designing the partnership documents. These are what I call the “what ifs”. And contrary to my normal optimistic approach to life, since I have seen so many bad situations–and since partnerships don’t always last–I have to be almost pessimistic at times and design essentially a pre-nup in order to try to anticipate what might happen in the future.

If you agree that the value to the buyer is based on the seller staying on board and being involved in the practice to continue to transfer goodwill and to continue to produce at a high level in order to help pay the bills, then all kinds of financial penalties have to be written into the agreement to prevent the negative ramifications to the value of the second half of the practice in the event of the death, disability, early retirement ( earlier than agreed to) or professional disgrace to the older partner.

In addition to the above, the challenge is to also try to anticipate every other possible contingency or policy decision that if not identified and planned for has the potential to undermine the expected financial solvency of the dental practice going forward.  Some examples would be technology purchases, physical expansion, dental insurance participation, job responsibilities–a methodology for making these kinds of important decisions must be outlined  and agreed to. I can tell you that based on my own experience over the past 20 years–this is unlikely. I keep learning from every situation. So please make the time and put in the effort to be as explicit as possible.

I was not kidding when I described partnership documentation being over 100 pages long. I would categorically suggest that a partnership agreement written WITHOUT these many contingencies identified and clarified, is not worth the paper it is printed on.

The most important reason that partnerships fail – or become severely compromised – is a lack of preparation for the future. We have all heard the adage: “If you fail to plan, then you plan to fail.” A strategy that says “we’ll cross that bridge when we come to it” is simply not acceptable.

The typical dental partnership is generationally based where an older doctor sells a 50% interest to a younger doctor. Not establishing the value of the second half of the transition and the timing of when that transition will occur is potentially a prescription for disaster. In my opinion, the value of the second half should be determined by the same formula that was used to set the value for the initial buy-in. It is also my opinion that there should be a requirement – not a choice – not the right of first refusal – for the younger doctor to purchase the second half.

This requirement is important from the perspective of both the buyer and the seller. If there is no requirement for the younger partner to purchase the second half, the senior partner might have difficulty finding a buyer. Perhaps someone would want to buy, but they don’t want to be partners with the younger doc. They might be interested in purchasing the entire practice. So the senior doctor in that situation would be at a disadvantage. Conversely, the younger doctor would be at a disadvantage if the senior doctor decides to sell to Osama Bin Laden’s brother because he can’t find any other buyer. Now the younger doctor might have to be partners with someone he doesn’t like or respect. So when I am involved in forming the initial partnership, I insist that the younger doctor be REQUIRED to buy the second half.

The younger doctor will then be in total control of his/her destiny. Probably bring in an associate – not a partner – and usually make a lot more money. Future partnership can then become an option if the dynamics are positive.

Many years ago, it was common practice for the selling doctor to finance the purchase price that the associate had agreed to pay for an equity position in the dental practice. The selling doctor would charge a competitive interest rate and typically the note would be for a 5 to 10 year time period. With this approach, the seller receives the purchase price in little pieces rather than the full amount. I would much rather see the seller get the full price all at once. You can do a lot of neat tax strategies with retirement plans. And there is certainly a time value for money invested.  I am strongly opposed to owner financing for the following reasons.

There is no need. Nowadays there are many banks and lending institutions that have programs specifically tailored for dental practice acquisitions. I am constantly amazed at how easy it is for a young dentist–even with significant education debt–to borrow 100% of the money needed strictly on a signature. No collateral. Even at the depth of the financial mortgage crisis in 2008 in 2009, dentists were still able to get their financing. This was in stark contrast to many successful small business owners in the same community who were not able to secure loans.

Practice values have increased so buyers often need more time to amortize the purchase price in order to make the purchase affordable. I would not want the selling doctor to hold paper for that long. That is what banks are for.

The biggest negative to the seller is the risk involved by acting as the bank. It is much easier for a disgruntled junior partner to walk away from this kind of owner financing. Sure–you have a legal agreement and you could sue for damages–but often times it just is not worth the aggravation. If in fact after a few years the junior leaves, he or she loses whatever money they paid in, and the selling doctor regains 100% ownership of the practice. But now the seller is essentially back to square one. The security of selling the practice has vanished and now you have to get back to the hard work of finding another buyer. I have witnessed this unfortunate situation on a number of occasions.

If instead the purchase had been bank financed, it is much more difficult for the buyer to walk away from the obligation. Remember that the bank has already paid the seller the entire purchase price. This buyer would now certainly risk personal bankruptcy and certainly severe damage to their credit score.

Owner financing is also a negative for the buyer who would not be able to fully share in the revenue stream of hygienists and other dental providers such as itinerant specialists or other associate dentists. As I have mentioned, when the selling doctor provides financing, he does not receive the full purchase price–just one year at a time. So the buyer only becomes “vested” in the other profit centers of the practice based on ownership. As an example, with a 10 year owner financed situation, the buyer pays 10% in the first year but only receives 10% of the profit centers. After year two, 20% and so on.  The increased sharing from profit centers only occurs as the acquisition cost is paid off.

Make the buy in a win/win situation for both parties. Don’t even consider owner financing.

It is very important to recognize that the associate buying in should NOT have to pay for all of the growth that he or she created since entering that practice as an associate. The formula that I recommend is that the associate pays for 50% of the growth. Here is my rationale. The associate (buyer) is producing dentistry on the seller’s patient base. Without that base, no dentistry would be produced. So credit the owner. But the associate was talented enough to diagnose, conceptualize, sell and perform the dentistry. So credit the associate.

Illustration: A practice was collecting $900,000 when the associate first joined the practice. Two years later, the practice is collecting $1,600,000 of which $500,000 is from the associate’s production. Subtract $250,000 from the $1,600,000 and the Collection number on which you base your valuation is $1,350,000.

What is a fair valuation? Appraising the value of a dental practice is based on a professionally prepared analysis that takes a large number of factors into consideration. Included would be- but not limited to: net profit (what is left over after you pay all the bills); are collections decreasing, flat, or increasing; number of new patients; insurance participation (dependency); age of equipment; level of technology; esthetic appearance of the office; practice location – good neighborhood or changing population dynamics; number of dentists in the area. The list is long. And then you need to factor in the current supply/demand ratio.

Based on my observations and experience, we definitely are in a seller’s market with more dentists looking to buy than doctors willing to sell. A diminished supply of quality practices for sale is driving higher practice valuations – often in the range of 70-75% of a weighted average of the last three years collections.

The poor performance of the stock market in the first eleven years of the twenty-first century has dashed the retirement hopes and expectations of so many dentists. They simply have not been able to accumulate the necessary funds to retire from practice and maintain their life style. As long as they keep working, they are financially OK. But they simply can’t afford to retire.

Recommendation.  Hire a professional to perform a practice appraisal as soon as an associate joins your practice. This will avoid arguments down the road.

Over a three month period beginning July 2011, I wrote a series of seven posts on how to avoid the common pitfalls of dental practice transitions.  My comments were focused on  the sale or purchase of an existing practice resulting in a merged larger practice still with one owner. In the general scheme of things, this is  relatively uncomplicated.

The most difficult and complex practice transition is an equity partnership. In the typical situation, an associate who has been working as an employee for a number of years in a dental practice is offered the opportunity to buy a percentage of the business and become an owner. The sale is designed as an exit strategy for the senior doctor who will be retiring from clinical practice – probably in five to seven years.

The complexity of a dental partnership can perhaps be measured by the length of the legal agreement, often 90 to 100 pages. Contrast that to an outright sale of a practice where the legal documentation of the purchase is usually 10 to 15 pages.  There are significant risks to both parties when entering into a partnership. From the perspective of the seller, some  questions might be:

1. How am I going to handle losing total control (power) over decision making?
2. What will happen to my income stream?
3. Am I giving away the store?

The buyer will also have questions:

1. Will I be able to afford all this debt?
2. Am I paying too much?
3. I know that I am an equal partner, but will I ever be able to truly exert my influence?

You are going to the altar on this! It is a marriage without the romantic benefits, and in my experience I have observed that a dental partnership has about the same chance of success as a marriage. That being said, most marriages that don’t last certainly don’t fail in the first few years. So with hard work on everyone’s part, there is a reasonable chance to have the partnership survive until the senior doctor retires.

Contrary to my normal optimistic approach to life – and since I have seen so many unfortunate situations – and since partnerships don’t always turn out to be long term success stories – I have to force myself to use restraint when advising clients in this arena. The challenge is to design what essentially is a pre-nup agreement that tries to anticipate every possible contingency in the event that things don’t go smoothly and blissfully or as planned.

By definition, a dental partnership between a senior doctor and a younger “associate to become partner” is full of built – in inherent conflicts of interests. Recognizing this dynamic makes it all the more important that the prospective partners at least share basic core values like personality, consideration for others, and an ability to communicate well. Without that to start, all of the thoughtful contingency planning in the world will not insure success.

In my opinion, success in life is always about having reasonable expectations. I would suggest that you will be disappointed if you think your dental partner is going to be your best friend and golfing buddy. But if at the end of the day, you and your partner respect each other and can co-exist in a peaceful professional relationship, then that would meet my definition of success. Anything more than that would be icing on the cake.

Over the next few months, I plan to document and discuss in detail a number of positive suggestions and strategies to implement when designing a dental partnership.

True confession–I have not been a big Facebook fan. I always recommend to my clients that they should have a Professional Facebook Page. It is free and relatively easy to set up and there are benefits. But my priorities in the Internet marketing world have always related  to Google search. Create a great website that is attractive and easy to navigate, one that positions high up on the local Google business map when someone does a search for a dentist in their geographical area.  In my experience, I continue to see a strong correlation between a well-positioned website and new patients calling the office.

But new evidence shows that there are almost as many searches for a dentist on Facebook as there are on Google. So with the advent of Facebook’s Timeline, now may be the time to upgrade your Facebook presence. Here are three good reasons why.

1. Additional real estate– with the wider profile of Timeline, you have more of an opportunity to tell your story graphically with a bigger logo and bigger and more dramatic photos. It gives you the feel of a website on your Facebook page.
2. Pinned posts–in the old Facebook format, any post you made about an offer–like a free exam or a discount on Zoom whitening–would quickly fall off of your live feed page. Now you can “pin” or attach that offer to the top of your Facebook page so the offer stays visible at the top of the page for seven days or until you unpin it.
3. Icons–in the old format, any icons were very small and appeared as a list below your small photo or logo on the left side of the page. Now with the open layout and wider format, the icons can be much bigger–similar to the buttons on your website. In my case, with my new layout, Get my Blog and Videos are now prominently displayed. Click here to see the before and after of my new Facebook page. I think you will agree the differences are pretty dramatic.

I want to thank Tim Healy and his talented team at TNT Dental for all of their extraordinary efforts in creating my new website,  my new mobile website, and my new Facebook page. I am especially grateful to them for the screenshots they were able to create on this post and the two previous ones that make it easy for people to see what I’m describing. I also want to thank my good friends Rich and Dave Madow who teach a fabulous course on Social Media. I took their course three years ago, and it provided me the inspiration and the technical knowledge to begin a journey that continues uninterrupted to this day.

On March 30^th, whether you like it or not, Facebook is going to force the timeline change, so any custom work you have done under the old format will look funky and possibly distorted. And if you are not prepared in some fashion, you are not going to look good under the new format either. So don’t delay. Speak with your technical people and take the appropriate action. And please remember to Like us on Facebook!