Moving From Cottage Industry to a Corporate Organization

I was visiting with a local orthodontist last week and I asked him if there was anything going on in dentistry that might be of interest to our members. After a little thought, he remarked that dentistry has slowly evolved from a cottage industry.

I have heard the profession of dentistry being described as a cottage industry before and assumed that was because of the "small shop” hands-on nature of the delivery of goods and services. It turns out that I was right but the term cottage industry once referred to rural areas where a farmer’s wife might take in laundry and ironing into the house to supplement the family income. Cottage industries are typically loosely organized and have a homespun approach to customer service.

Is the evolution from dentistry being a cottage industry to a more corporate business structure a bad thing? It can be a little of both. We know that the best-managed and more profitable practices are the ones that have good systems that are constantly updated and closely monitored. Once the organization is lost, chaos ensues. The cottage concept oftentimes lacks a sound business structure. Now there are more practices that are managed professionally but it is likely that personal customer service suffers due to the demands of quotas and budgets. This orthodontist told me that it is surprising how many of his patients come to him and have no idea what their dentist name is! Many of them go to clinics with a corporate name rather then the "good old days” when the dentist name was the name of the business.

I totally get that a practice name is good for business. Branding is great for recognition and marketing. A named practice or group of corporate clinics allows for the transfer of ownership or treating dentists without outwardly changing the goodwill earned over time. The larger the entity, the better chance that "the left hand doesn’t know what the right hand is doing” scenario will occur. In the cottage industry model, the dentist name and reputation accounted for all of the goodwill and made a one-on-one relationship much easier.

The bottom line is that dentistry as a cottage industry is likely more personal but business practices are harder to manage while corporate style makes it more difficult to develop a solid patient-dentist relationship. Certainly, a small individually dentist-owned practice can have immaculate business practices and a corporate dentist can achieve a great patient-dentist relationship, but it will take more attention to make it happen.

We should all strive to make the business of dentistry better as well as building goodwill regardless of the nature of the practices we work in so that we can uphold the positive image that our noble profession has earned over the last one hundred and twenty years.