How to Know if You Need a Second Location

When do you know if you are TRULY out of space? What are the options to consider to increase space or decrease your patient count? How do you know if you need a second location? In this episode, Dr. Kuba and Bethany discuss the potential highs and the potential lows of starting a second location. They also discuss all of the “signs” that may indicate that you are truly out of space. If you are feeling cramped for space or are thinking about a new business venture with a second location, this episode is for you! 

Previous Episodes Worth Revisiting: 

Charting Your Course to Contentment 

How Many Team Members Do I Need? 

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Transcript

are you looking for a podcast where you can hear from real people regarding their real dental drama if so then
0:09
you've come to the right place join hosts bethany penny and dr reena kuba as
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we dive into the solutions we've created and the mistakes we've made while
0:20
managing dental drama let's get started hey friends hey
0:26
hey so i have a topic i want to talk about today okay before i do i have a
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question not for you okay for you listening are have you subscribed yet if
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you haven't go quit putting around may content is out it is fantastic we're
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already working on building up june so um go subscribe um no excuses no excuses
0:52
i love it excuses move along um okay so the topic i want to talk about today is
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i don't think we've talked about this before and
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um satellite locations mhm can we i want to talk about i think a lot of dentists
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um either start off with going "oh that's the pinnacle of success is when i
1:17
have multiple offices that's what i want to do my friend did it so's doing it i
1:24
can do this." um or i you know i we're we're so full
1:30
we're busting at the seams we have no more space to see patients clearly i need to have a satellite location or i
1:36
need a bigger office um so do i keep this one and start another one over
1:42
there or what do i so the topic i guess um and maybe you
1:48
can help kind of rein it in but my question is i think all of us at some point either somebody has asked us or
1:55
suggested or we feel like oh my buddy's doing it am i behind should i have
2:01
another office um and it's really easy to get caught up in that and it's like
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am i doing am i doing it for the right reasons um or am i getting caught up in
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what the joneses are doing and shut up and focus like what so i think that's um
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i know early on i had a um practice uh
2:24
what do you call it a a rep my rep um chris at the time and he said something
2:30
and it's always stuck with me and he was like you know people always seem to think you get busier and then ooh i can
2:38
just recreate this in another location why do i not do that and get twice the money and he's like what they're not
2:44
realizing is you're getting twice the headache and can you really give enough attention to both or are you going to
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start giving attention to that one and then this one start dropping because you can't keep up um and so he said like
2:57
really if if you're in the camp of "oh i'm so busy." he's like "are you are you
3:02
maximizing your space 6 days a week are you open on saturdays and you still can't get enough room are you utilizing
3:08
all your operatories or is it like you're full out of two operatories but you really could build out three more and you're not doing that but yet you're
3:14
going to go start another location?" like so that's always stuck with me because i would say probably around year four or five when we finally were
3:21
hitting our stride and our rhythm and all of that and i remember the staff going "oh we don't have any more room
3:27
here." here and i was like normally that would have been easy for me to go yeah you're right no we're open from 7 to 3
3:36
3 days a week we have not outgrown our space we're just not utilizing it to full capacity when we are here on
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saturdays and we're here from 8 to 5 or longer with two doctors three hygienists
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like whatever the space can accommodate and we're doing that six days uh continuously consistently then i'm
3:57
busting at the seams that's right but i don't think people think about it that way they start going "oh we're busy." well you're busy in the confines of what
4:03
you're doing but can you stretch those confines and i think in a in most cases
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the answer to that is no but you're you're in your bubble and in your zone and haven't thought about thinking about
4:16
you know alternatives alternatives but then you're also going "oh a new shopping center opened up in the town
4:23
next door or i've heard this town is growing and look we've been so successful here let's do that there."
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and i think that for me is always i'm just like "whoa whoa whoa whoa whoa whoa." cuz now you really are splitting
4:35
yourself amongst two and how can two be equally successful unless you're
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bringing on a partner or a management team i don't know but to me it's like i
4:45
don't know about that so can we talk more about how do you know if you could and should have a
4:52
satellite location and for people that are like "well everybody else is doing it and i'm behind talking about some of
4:58
that mentality as well." yes so i think this is such a great
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topic because i do think you're right i think there's this like this is the evidence that you're successful that you
5:09
have more than one location and i disagree with that sentiment completely
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now i do think there are cases where a second location makes sense but i think
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you'd be surprised to hear me say that there's very few situations that i think actually make sense for a second
5:27
location so because often times i can get in and look and realize there's so
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many other solutions before we branch into a second lease that we're having to
5:39
pay for utilities lights you know equipment for that space staff for that
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space it sounds easy to replicate like oh we've done it here we could just easy
5:52
easily replicate there that sounds good but is the team that you have at your
5:58
existing location are they all going over to that satellite location because
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replication happens when the same people are executing the same tasks so if your
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team is not going with you to that new location which i would never recommend
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because then you're not in this location anymore then you're compromising your your bread and butter base yeah it's
6:22
your baby and now what is fueling the financial pipeline for that second
6:27
location you just compromised it you just cut its legs off and said "i still want you to run as fast." well that
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can't happen because you you took out the team that was making that possible
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so replication of a practice which to me you're like "okay
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why would we ever take the team?" my assumption is if you're needing a second
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location it means that you're fully maxed out and what you have described is exactly what i would describe are we
6:58
working five days a week have we lengthened our days have we added saturdays if need be are we truly best
7:05
have we brought in an associate like what have we what have we done to fully yeah and so to me if you're looking at a
7:11
satellite or a second location it means you're fully maxed out so then we can't
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our team members from that primary location are unavailable to go to the satellite location so replication is not
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a possibility at all if if that's in your head like oh i'll just start it the same way i did this one and it'll all
7:33
work just the same no no no no no because you've got completely new team members there who don't know you who
7:39
don't know the original system who are they can't replicate anything replicate
7:45
what they have no clue what you're talking about so you're rebuilding an entirely new practice and
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yes might it turn out to be similar to your original practice the the breadand butter practice yeah it could years down
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the road but the same process that you went to went through in this original
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location the same headaches the same problems all that it absolutely will
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happen again at the new location the whole ramp up of everything and not to mention the new location is gonna have
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its own demographic so some of the marketing things that worked in bread and butter may not work in that other
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one the same types of um customer service type things you might get away
8:30
with doing or not doing in bread and butter you may or may not those may or may not work for this new clientele
8:37
that's right um so there's a lot of i think like little things that it makes it seem now i have a colleague that but
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this has been happening now for years maybe 7 8 years when he opened his he and a colleague opened two locations
8:52
together but it was in two separate towns completely far away from each other and it and it ended up being he
8:58
ran one colleague ran the other so i think they eventually split off um so he was basically running one well i talked
9:05
to him the other day he's got five locations now but he's not a practicing dentist anymore he was done with
9:11
dentistry and now he is overseeing and so it's a whole so that's a whole
9:16
different that's a whole different category but if you yourself are going no i'm the provider and all these
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patients in this town love me and i've built up this great practice and i'm going to go duplicate it over
9:27
there something's going to be different so not that it can't be done or
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shouldn't be done but i think just the realities of knowing that it's not just as simple as oh i'll just open all these
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other locations and it's the same yeah and as long as a practice owner
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knows that before they take this leap of faith into a satellite location or a
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second location i i think we've just got to be careful not to oversimplify the pro process as a matter of fact in order
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to make sure it's the right decision i would recommend over complicating it and
10:02
playing out all the horrific whatifs that could happen with a second location
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and once you've played through all those horrific whatifs that jazz because i think the people
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that are ready to do that and wanting to do that don't they're just like "oh this is we we've already been so successful
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here we'll just repeat it there." so what are what are you talking about like the horrific so what if i can't find
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good staff members for that location what would i do it how could i recreate
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a really good practice having subpar employees so right now my bread and butter works great because i have
10:38
fantastic team members they execute everything but what if i have team
10:43
members that don't show up they do show up and they do a terrible job they're
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not good at customer service i'm having to they leave so it's just an environment where i haven't built
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retention with my staff members and so they're constantly funneling through and i'm having to retrain from the ground up
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i don't have a long-standing team member in this new satellite location so i don't have a good trainer built in like
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i am the trainer so what if i'm having to manage a lot of hr headaches and i
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had a a colleague that that did that with and i think you know of course i i'm never going to know the ins and outs
11:20
but he bought another started another location could never keep a good associate frankly then he couldn't keep
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an associate in his main one either and i'm like "oh so now you're constantly looking for two associates." um and so i
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don't know if his original plan was get an associate and they helped summon one and summon the other but the towns were
11:39
pretty far from each other like you know if you lived near one it was going to take you a good 45 minutes to get over
11:45
to the other one and anyway i think ultimately he ended up having to sell that one or close it down because it
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just wasn't sustainable and he tried for multiple years um so uh it's common it's
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a common problem so what if staffing is a real big head headache for me another
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what if is what if the marketing that i did in my original location doesn't work
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in the new location and i'm struggling to get patients in the door i'm struggling to get production on the
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schedule having in your mind a
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longer negative cycle what would i do if it actually doesn't become net positive
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covering the bills until 2 years down the road and making sure financially
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that you've built yourself up enough of a cushion in the original practice that it could continue to feed that satellite
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practice so we don't want to go in assuming "oh my gosh this location's perfect the the culture is just right
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i'm going to get in there and i'm going to be net positive in 6 months." nope play out the what if it's not net
12:56
positive for a longer period of time are you still feeling good about that and you may you may say "yes because i know
13:04
that the situ the the ground is fertile for a practice in that location so i'm willing to continue to kind of filter
13:12
off the top out of my original practice for two years to to pay for that okay so what if i can't get the new patient flow
13:19
i can't get the profitability up fast enough that's a good what if what if to play
13:25
out what if i ultimately find that i can't handle
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both practices which is a very real possibility what if mentally i'm just having trouble managing both the staff
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at the satellite the staff at my original the patient problems that come up between the two what if it becomes
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too much for me which is a a possibility we have to consider what would you do in
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that particular case so the more we can kind of project out worst case scenario and go ahead and come up with
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preventative solutions to those then we're going to be more prepared and have even thought about those boundaries and
14:07
kind of go what would my threshold be if i'm thinking okay can i you know support
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this for two years and not have it be profitable but what is my line is it two
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years is it one year like at what point and if if it gets to that 2year mark and we're still in that same boat what am i
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doing then but if you've kind of gone well no it will be but then you find yourself like 2 years later and you're
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like oh my god i'm bleeding money now because i wasn't thinking about that boundary of 2 years or one year or 6
14:37
months or whatever it is um so having had some boundaries in place i guess
14:43
would be the the question yeah and i would say too as far as projecting worst
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case scenario to me you've got to have somebody that's side by side with you on
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this so it doesn't mean that they're moving over so you might have your
15:00
office manager that's just like you can't live without this amazing person that doesn't mean that your office
15:06
manager is moving over to the satellite location that's not what i'm saying it's just you need somebody to run ideas past
15:14
to potentially support you with some of the things that are needed like maybe you don't have the capacity to do all
15:21
the hiring at this satellite location but thank goodness you've got an office
15:27
manager that can help you filter through some resumes and conduct some of the initial interviews so just i think
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anytime we're talking about a full-time practice the original practice is a full-time practice and that doctor is
15:41
now choosing a sla satellite location even if they've already got a good associate in mind they may even have
15:48
some key team members in mind that out in the community that they already know for that
15:54
location you're still going to want like your inside person that's kind of helping you with it in other words just
16:01
don't try to do it on your own is what i would say h have a good buddy that's walking alongside you it could be your
16:08
financial planner that you're they're making themselves more available to you while you make some of these decisions
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just have somebody that you're running ideas past now having said all the negatives to a satellite
16:23
location in other words just think about all the negatives before you decide to do a satellite location there are times
16:30
that it really does make sense i'm coming from a practice that i was just at where uh he his practice really is
16:38
like we're we're running out of space it is a very busy practice he's got you
16:44
know five hygienists himself and an associate doctor um by they're you know it's open five
16:52
days a week they've both him and the associate doc are just unwilling to do saturdays and that's fine real quick
16:58
before you keep going with that the next question would be is that when i mean is he fee for service yes okay because that
17:05
would be my next question like maybe that's the time to stop maybe you think you're busy but you're still taking hmos
17:10
dude you are working and not making money so before you go start a satellite location thinking you're busy like are
17:17
you working smart or are you just working and so at that point if you think you're busy and you're like "yes
17:22
i'm there 5 days a week and we don't want to work the saturday and we're we're good but we still don't there's still a two-month wait to get in here
17:30
maybe that's where make sure to look at your insuranceances and stuff and say "wait if we dropped this one insurance
17:35
that pays nonsense how many patients am i going to lose could that free up the space we need for better paying patients
17:43
here?" um so i think that's the other thing to think about you absolutely need to consider that
17:49
before starting a second location it it just yeah it doesn't make any sense to
17:56
me because if you're doing dentistry for 50% off which is what you're doing if you're in network then you're you need
18:03
to make sure could i just lose a few patients and be okay and also not just
18:09
on capacity with the actual physical space but also capacity with your team
18:14
like if you're looking at i'm in network with everybody and i'm to a point where
18:19
i can't that me and the hygienist just can't handle this patient base any longer we've got to add an additional
18:25
hygienist or an additional doctor make sure that that makes sense
18:32
financially so is is that high that new full-time hygienist do you have enough
18:38
volume to pay for her and still be net profitable or let's say it's an
18:44
associate that you're bringing in so even capacity from a staff member standpoint does it make more sense to
18:51
drop insurance before adding that new hygiene which i think what a lot of
18:56
people do i think is going "how could it not how could it not?" like we're making all this money and we could see more
19:02
patients and we'll bring in these providers like that seems easy it's not that simple you might be paying a doctor
19:10
top dollar you know to come in but you're you're not making top dollar
19:16
right you're making 50% or less of your fees by taking this insurance so i think
19:23
that's one where a lot of people don't really put that together and that's you're not doing yourself a service
19:28
whatsoever you're actually going to end up in struggling to make profitability yeah and again this is where you have to
19:36
look at capacity through multiple different lens at the end of the day we
19:41
have a certain number of chairs we have a certain number of patients those
19:47
certain number of chairs needs to be able to to service provide enough capacity for our certain number of
19:54
patients and there's going to be multiple times in a practice where you go "these chairs are not enough to
20:00
service the amount of patients that we have in our practice." and wow that's a huge blessing okay well how can we
20:05
lengthen the chair time the same number of chairs but how can we lengthen it how
20:11
can we add a day so that now those four chairs that we have available are also available on fridays and the owner doc
20:18
is like "uh uh uh i ain't going to be doing that." that's fine it doesn't have to be you who could you put in your
20:24
practice on a friday to service your patients and make sure that there's capacity there so there's
20:31
so most times there is just untapped capacity solutions that we're just
20:38
immediately going based on our current circumstances we don't have enough chairs to be able to service the patients yes but you can reduce the
20:44
patient base oftent times with some very creative uh solutions or you can extend
20:51
those chairs so that they're available more hours in the day or more days out of the week or it could be that a doctor
20:59
you know in a especially in a startup practice it could be a year or two in they still haven't added a hygienist and
21:05
they're running out of capacity they're like "oh gosh how do i continue to serve?" well there's a chair that's
21:11
never used it's fully equipped and we never get to that fourth room so you don't need chairs you actually need
21:17
providers is what you need so yes before you consider i'm at capacity and need a
21:24
satellite location make sure that you've actually thought through so you were saying this doc that you were with they
21:30
they've done all of that and their fee for service meaning it's not like they could drop on insurance they have and
21:35
they still have this volume what is he doing then why how tell him to give us the secret i know he he's got a
21:41
fantastic practice and he has um due to
21:46
kind of some prevention training that he's gone through you know a lot of his
21:52
patients see him more than every six months in his mind like a lot of carries
21:57
a lot of perio comes from just they're not seeing the dentist enough and so his hygiene department is very robust he's
22:04
got a great practice so he's in a situation where we've done all that we
22:10
possibly can including which i hardly ever recommend this but including
22:15
cutting back on marketing because i'm like we don't need the new patient flow we can't we can't service the new patients right now because of the space
22:23
limitations and so for somebody like that he's going okay does it make more sense to have a second location does it
22:31
make more sense to expand the physical space you know saturdays and sundays are not
22:37
an option for him and that's that's great he doesn't want that to be an option for his team because he's got you
22:43
know a lot of working moms on the team and all of that so there's some boundaries that he's put into place but
22:49
he's still in a capacity situation when you're in that and you've done everything that you can to reduce that
22:56
capacity problem then you're looking at a satellite location and in that case
23:02
sometimes the satellite makes sense um sometimes it doesn't and you're just like "okay well we got to turn that new
23:09
patient nozzle down to just a trickle and we're okay with that." and um but
23:17
even in that situation we talked about he and i talked about a satellite location and then we really started
23:23
looking at options within his current space current space to go can we add can
23:29
we extend given the layout of his property that is not a possibility so we're like
23:35
okay it's got to be satellite nope no because there's a building next door that he can purchase and either bulldoze
23:42
that and kind of build out or he can connect the two buildings so just be creative is what i'm saying don't
23:48
immediately go to second location even if you're in a true capacity situation
23:54
you may want to look at just what can i do with my current space um so that's
24:01
one thing when you truly have a capacity situation satellite makes sense but then sometimes there are just opportunities
24:07
that present itself where hey you know i wasn't even wanting necessarily a second
24:14
location but this great opportunity came up came up in a neighboring town i know
24:19
that's an underserved population it would be really helpful for them to have a dentist in that
24:25
location i don't necessarily need it from my patient base here but it's kind
24:31
of an exciting possibility so i think that happens a lot with people or they
24:36
talk themselves into that and i think the times where i could see where it it truly does make sense or potentially
24:43
um cuz i had a colleague that in the next town over there was like a a dentist who like for whatever reason at
24:51
like age 70 decided to start a practice and fully equipped it and did all of that and then never quite took off
24:57
because he didn't you know do all the things he needed to do to build a patient base whatever then was like "oh
25:03
never mind i really don't want to be here." so almost like a flash sale you know like "who wants to take this off my
25:08
hands?" and so this colleague was like "it was too good a deal to pass up you know like 50 70 80 grand that for pretty
25:17
much new equipment pretty much whatever decent lease contracts." so he did that
25:22
i i've got a couple of colleagues that actually have done that and um so what are your thoughts on that
25:28
like does that do you think that's a good idea or it can be it can be
25:34
dependent upon the owning doc's capacity right so that's where we still play out
25:40
all of the whatifs we go what if i have staffing problems there what if it's not
25:46
profitable fast enough what if it's too much for me to handle do i think i can handle that so you still have to play
25:53
through all the negative what-ifs and then go okay if kind of
25:59
worst case scenario happened in this second location am i still okay with it or what can i do to potentially prevent
26:07
worst case scenario in that location and i will
26:13
say in all my years of dentistry very seldom is a practice
26:21
bankrupt for some reason it tends to be a pretty surefire bet that you're going to be
26:28
profitable at some point sometimes it takes longer sometimes it's quick but
26:34
most of the time you're going to hit a net profitable situation and so is a dental practice a
26:40
good investment almost always it really is but i think you've got to make sure
26:48
you're okay with the risk that it may not be net profitable as soon as you
26:53
want it to be or it may take more mental capacity than you were wanting to commit
27:00
to it and if you're okay with that it's going to be profitable for you it is
27:05
going to pay off at some point so in that case yeah most of the time it's a
27:11
good situation depending upon the practice owner's capacity so i guess that would be too like if it is a a
27:18
flash sale type situation or you know looking at opportunities that present
27:23
themselves and suddenly you're like well i never thought i was going to do that but now now there's a space available
27:30
that's already plumbed and my you know portion would be $200,000 instead of
27:37
$600,000 like i had to do originally and you know i've got um a colleague that i
27:43
know is moving from out of state and is looking for a place to practice and we've always gotten along and we want
27:49
like things like that if it looks like you can make that work but keeping in mind that it's still not a replication
27:57
exactly and there is going to be maybe maybe financially it may make sense but mentally doesn't make sense for you
28:03
exactly um and trying to figure out like okay what same thing where are my boundaries on that like if if this
28:10
colleague comes to town but then they actually don't come to town they it turns out that they are in a suburb
28:15
somewhere far away and okay now does that mean i've got to work out of that location or do do i oh gosh like who
28:22
what's my plan okay well maybe that location's only open 2 days a week well that kind of sucks cuz that's going to
28:27
take me 3 years to make my money back rather than the 18 months i thought it was going to take but okay so same kind
28:34
of concept um but those are times where it might make sense i to me those are
28:40
often times the cases where they do make sense i love when a practice owner can
28:47
be presented with an opportunity where they can get in and essentially do a startup for a majorly discounted price
28:56
you know e if it's already equipped and you're talking about 60 $80,000 i'm like
29:01
do it there's very seldom times that that doesn't make sense um or even it's
29:06
a finished out space but there's no equipment in it and so now you're having to look at maybe a $200,000 investment and i'm still like
29:14
do it because because a startup at a $600 or $700,000 initial investment from
29:21
the ground up a true startup they're still profitable they they reach a point
29:27
where they're profitable so then you look at an $80,000 investment and i'm like you're going to be profitable so
29:33
much faster true but i still do think uh not to um take away from the mental
29:40
because one of the colleagues that that did that and took over a practice um and
29:46
was like "oh this is great oh i might look for this in other towns too to see like what else is you know somebody's
29:52
got to be vacating and i'll just keep my ears to the ground and and be ready to pounce on that ultimately what ended up
29:59
happening with him is his main practice that was
30:04
fantastic he eventually ended up selling to corporate oh and i'm like okay but
30:10
but in his eyes he's very uh successful because now look i've got two offices
30:16
and the flash sale one that i got for 60 grand and had all this new equipment and
30:21
i didn't have to put much in no but it was so much on you mentally you needed
30:26
help and you that's such a good point was that really a good investment um so
30:32
it depends on how you look at it yeah but um but i just
30:37
thinking through all of those things because it's very tempting a lot of times for all the reasons we just talked
30:43
about above and and i guess my point is go back to your why was your why because you're again you
30:50
you think of that as a measure of success but is it truly a measure of success if you're making minimal profits
30:58
out of both when you could be making maximum profits out of one um are you a
31:04
are you a husband and wife pair are you a sibling pair like maybe that makes sense in those cases where both of you
31:10
are dentists and you need more space but i would say it's tempting it can work it
31:15
is smart in some cases but i think just looking through all of those things before you jump on that bandwagon yeah
31:22
and i would say too you're going to have to approach it from the standpoint of
31:28
you will need more administrative time it is for a practice owner to be
31:35
able to manage two locations and still be practicing dentistry 5 days a week
31:41
that is next to impossible so i think that's where the colleague of mine that now has five that's what he's doing he's
31:47
not being a dentist he's 100% administration and the other one that sold to corporate did so because he
31:54
wanted the back help like the administrative help which i'm like okay
31:59
but at what cost now so yes you think this $80,000 one was a great deal but you sold half your practice to get the
32:06
admin help you needed to run both so again there's different ways to do it but just think making sure you're
32:12
thinking it through yes without blinders on or just going in and going "oh well
32:18
you know my buddy in kentucky did it i should be able to do it i've got better
32:23
grades than him in dental school like look at him." like don't don't fall for that yes foolery there's no there's no
32:30
clout in own i know we think that like oh they must be really successful they
32:35
own two or they own three or they own five but to me it is just as valuable to
32:41
have a very successful one location practice and that is something to be proud of you don't have to have multiple
32:47
locations to show that you're successful and then i would also say when you think
32:53
about starting to divide yourself out that means less clinical time at your
32:58
original bread and butter practice and the last thing you want to do is to
33:03
compromise the success of that that was your flagship place you know and so
33:09
don't if you don't have the mind that can be equally still as committed and
33:17
fervent at your original location if you're like "ooh sparkly shiny i've got this new thing now that i'm focused on
33:24
and now i'm not focusing at all on my original location or i'm very
33:29
unavailable or or divided there." it's gonna impact your even if it doesn't impact your production because you put a
33:35
phenomenal associate there in your place it's going to impact that culture that you're create that you created and your
33:41
team might start to feel different your team might start to feel less loyalty to you because they're not with you as much
33:48
so there can be negative side effects if you're not able to stay just as firmly
33:55
committed and available to your team as you were before the two locations so it
34:02
really does take some careful planning of how you're going to do both well thanks for joining the conversation
34:08
today we hope that you are comforted in knowing that you are not alone but we
34:13
also hope that you're walking away with some really great tips and tricks to try in your
34:19
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