You’d think that nobody could forget the lessons of the Great Recession of 2008-2010.
Unfortunately, it looks like Americans have short memories.
The United States is currently experiencing the second-longest stock market boom on record. By itself, that’s not a bad thing. Markets tend to run in boom and bust cycles. The problem comes when the bust is huge, and that’s what happened in 2008 when the subprime mortgage market collapsed.
There were fundamental flaws in the regulation of the markets prior to 2008, and attempts were made to learn from history. Stronger financial controls were put in place; but, as is common when the government tries to restrain business, those controls were diluted by lobbyists.
Right now, the “too big to fail” banks are bigger than ever. It’s an open question whether the increased capital requirements for the big banks will work as intended if the economy goes south.
Lessons For Dentists From 2008
Dentists’ incomes took a significant hit when the economy tanked, and it wasn’t until 2o15 that revenues stabilized. Many dentists who had planned on retiring found no ready buyers for practices whose value had slumped. They had to continue operating their practices with far less revenue, which further impacted retirement investments that had tanked when the market did.
Some of those dentists are still waiting for retirement.
One of the lessons is that economic recovery can be a very slow process. The markets rebounded fairly quickly, but hiring, incomes, and GDP lagged considerably. That pattern is likely to repeat in an economic downturn even if the next one – and history teaches that there will be one – isn’t as bad as what we went through last time.
When the economic news is bad, people tend to reserve their money for the necessities – food, shelter, clothing, transportation, medical care. Dental care and particularly elective dental procedures are put on hold as long as possible.
The Time To Act Is Now
Emergency preparedness is a good thing. You probably have an emergency evacuation plan for your practice and a disaster recovery plan too. What are your plans for when the economy goes south again?
Is your dental practice positioned to withstand a sharp cut in operating revenue? Can your retirement plans stay on track if your investments nosedive?
Be prepared for what’s coming. Your best insurance against the next downturn is to attract the 20 percent or more of your market that isn’t driven by low prices, insurance, or specials.
That market segment has the ability and willingness to pay more for the right dentist. And the vast majority will retain the ability to pay more even when things go south.
Getting more and better patients is what SmartBox does for more than 550 dentists on three continents. Our industry-leading Patient Attraction System™ helps them get more patients, more profits, and more freedom.
And the patients that will keep their practices afloat when the next recession comes.
Visit smartboxdental.com to reserve your free Practice Discovery Session™ and receive your customized Patient Attraction Roadmap™.
We’ll show a Patient Attraction System™ that can double or even triple your practice.
Keep your practice in the black with SmartBox.