“Nothing lasts forever,” they say, and that’s built on hard experience in practically every area of life. At the risk of stating the obvious, that saying really applies to economic growth cycles. History overwhelmingly shows that economic expansions are followed by contractions and that bull markets turn into bear markets.
That will happen in the United States at some point, and in fact recent reports indicate that growth is slowing. It’s anyone’s guess when the downturn will begin, but dentists will do well to prepare for its effects now.
A Blinding Glimpse Of The Obvious
When you hire a lot of people when things are going great, you have no choice but to reduce your payroll when things aren’t so great. A vivid example of that fact is the Great Recession of 2008. Unemployment grew rapidly from 4.8 percent in February 2008 to 10.2 percent in October 2009 – a 5.4 percent increase in just 20 months.
Even worse, the unemployment rate didn’t drop below 7 percent until December 2013. That’s an awfully long time for a lot of people to be out of work.
Dentists’ incomes reflected the fact that many more people were much more concerned about keeping the lights on and food on the table than getting dental care. By one estimate, the average dentist income dropped between 7 and 11 percent. And that’s the average; arguably, many dentists took a far harder hit.
Many experienced dentists were forced to delay their retirement plans. Some sold their practices for far less than they had hoped and retired anyway.
“Not As Bad” Is Bad Enough
It’s quite possible that the coming economic contraction won’t be as bad as the Great Recession. However, at a minimum, dentists can expect their growth rate to decrease, requiring them to adjust their forecasts and even their retirement dates.
Hiring decisions may have to be deferred as may staff raises. Investment in new equipment may be put off.
Low price will likely become even more of a draw than it is now, which is considerable.
So, not as bad is still bad. With that said, the time to prepare your practice for what will come is now. It might surprise you to learn that preparing doesn’t require a large amount of effort on your part.
Downturns don’t affect everyone equally. Even when unemployment rates rise, there are still very significant numbers of people will pursue regular dental care. Quite a few will even choose fee-for-service elective dentistry. These are the patients you need to keep your practice profitable even when many other industries aren’t profitable.
SmartBox is the marketing firm that provides comprehensive, integrated, and strategic dental marketing services. We help thousands of dentists on three continents get more and better patients, even during an economic downturn.
“Map” Out Your Future
If you want to secure your practice against the next downturn, schedule a Roadmap call. You’ll need to invest about the amount of time you need to place a single crown or a dental implant. The Roadmap call is an in-depth exploration of your goals and the competitive forces at play in your market.
Following the call, we’ll send your completely personalized Roadmap to your success.
Don’t wait for the future to get here. Prepare now.