Five Myths Dentists Believe about Owning a Practice

  1. I can’t afford it.
  2. Corporations will buy all the best practices.
  3. Owners have a less flexible lifestyle.
  4. As an associate, “it’s not my problem.”
  5. You’re on your own.

At the age of 15, I knew that I wanted to be a dentist and own my practice. This goal spurred me through dental school and impacted all of my decisions. I saw owning a practice as achievable and desirable. But the more that I mentor young dentists, the more I find that many believe owning their own practice is an unattainable goal, or at best, a long way off in the future. In the face of significant debt, lack of business experience, and limited funds, many new dentists believe that working as an associate is the only viable option. There are some myths about owning a dental practice that is widely believed. I want to take a moment and address the five most common misconceptions that might just be keeping you from stepping into success as a dental entrepreneur.

1.  I can’t afford it.

When you graduate from dental school with debt in the six-figure range taking on more debt to own a business can seem counter-intuitive. Who would give me financing to buy a practice? According to Dental Economics (The Case for Private Practice, Jan. 2019) banks are currently willing to loan money to those purchasing a dental practice, and small business loans are very attainable, even for those carrying large debt. This new debt is the kind that will enable the dentist to pay back their student loans and make a more significant profit.

Let’s look at some numbers. As an associate, your income is limited. You are an employee and earn a salary. Any personal expenses you incur cannot be legally written off on your taxes (i.e., meals, travel, car mileage). According to the Bureau of Labor Statistics, the average salary of a dentist as of May 2018 was $175,840. Of this, a large portion will go towards taxes and paying off student loans.

Fast-forwarding ten years, and a dentist working as an associate may have her student debt paid off.

If the dentist were to purchase a practice however, she can make significantly more. The MDA estimates that 49% of Michigan dental practices have incomes of a million or higher.

Instead of believing that you can’t afford to own dental practice, maybe the reality is, you can’t afford not to!

2. Corporations will buy all the best practices

So, you have your small business loan, and you’re ready to purchase a practice.  Aren’t you going to have to compete with large corporations who can write a check and buy a practice?

In actuality, the fact that you are NOT a corporation will play in your favor. Many retiring dentists would rather sell their business to one owner who will care for their patients and respect the character and culture of the practice.

3. Owners have a less flexible lifestyle

Many believe that owning a practice increases your level of responsibility, and the hours you must work to keep the business running. While some business owners feel the need to micro-manage, this does not have to be the case!

I currently own and operate eight dental practices. I built teams in each office and then empower them to work for my success. As an owner, I create my schedule and choose the hours and days that I want to work.

As an associate, there is less flexibility. You will always be at the mercy of the practice owner and the days and hours they want you to work. Taking time off to travel and enjoy personal pursuits will be limited to a narrow window.

So, in reality, the practice owner will always enjoy more flexibility and freedom than a hired associate.

4. It’s not my problem

It’s easy to assume that as an associate, you would bear less responsibility, both legally and within the organization. The prevailing thought is, “it’s not my problem!” As a respected member of the medical community, an associate is just as vulnerable to malpractice lawsuits.

In this age of social media, associates are just as susceptible to bad reviews on Twitter, Yelp, or Instagram in addition to online rating services like ratemds.com.

As an employee, it may not be your problem if the technology, systems, or equipment are not up to par, but it will affect your level of excellence.
And you will not be in a position to effect changes.

The business owner is empowered to solve problems and pursue the highest level of service.

5. You’re on your own

If I purchase a practice, don’t I have to be ready to run every aspect of the business? “I’ve never done payroll or purchased software or managed an office,” you might say.

You have just spent several year studying dentistry and preparing to be a medical professional and may feel at a loss when it comes to the realities of running and owning a business.

The good news is, you don’t have to do it all by yourself!

I can help coach you through the details and share what I have learned on my journey. Let’s talk! 

3 Proven Ways to Find a Dental Practice

When we want to buy a car, we go to a dealership or maybe a website like Carvana. If we need a home, we search to Zillow or we find a real estate agent. For almost any other item, we can usually find it on Amazon, and with Prime it will be there in 2 days.

But, where do we go to buy a dental practice?

1. Personal Network — Your Community

In my experience, when your community knows you are looking for a dental practice, the opportunity may come your way with little effort on your part.

Make sure that your friends know that you are actively seeking a dental practice. My personal network has been the source of several of my practice leads.

2. Trusted Advisors

If you have professional advisors in your life (accountant, lawyer, physician, financial advisor), utilize their networks.

Chances are they have other dentists as clients and may be aware of those desiring to retire. In 2014 the baby-boomer generation began to reach retirement age, so the number of retiring dentists is currently very high.

Advisors also have professional relationships that can assist you; my accountant connected me to a dentist that ended up selling me his practice.

3. Letter of Introduction

This idea may seem “old school” but can be very effective.

Acquire a list of current dentists from your state dental association and send out a letter introducing yourself. Explain that you are looking to purchase, and offer to connect by phone or in person.

Who knows, you may be precisely who a retiring dentist is looking for!

 

 

Challenges in Owning Your Own Dental Practice

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If you know me at all, you know that I am a huge advocate of dental entrepreneurship. I believe the autonomy of being your own boss creates a life of freedom, flexibility and the opportunity for unlimited financial success.

The reality is, there will be significant challenges along the way.  The biggest learning curves for me happened in the areas of systems organization, human resources, and vendor relationships. Ironically, patient care was the least of my troubles!

Dental school did an excellent job preparing me to care for my patients, but the majority of my business knowledge came in the form of on the job training.

1. Organization

When I transitioned from associate dentist to owning and operating my practice I jumped right into patient care. I was confident that I was serving my patients well, but I didn’t have systems in place for the daily operations of my business. As a result, I didn’t receive timely compensation. I was contacting each patient’s insurance company for the first time on the day of service. The patients were not being asked to pay upfront.

I have since learned that a bit of research into the leading insurance companies can streamline this whole process. Forms and documents are available online to register as a provider with the insurance companies, as well as the necessary forms for the patients.

Create a checklist for your staff, to confirm the insurance company has everything they need to process your request. You can receive electronic payments from most companies. This can reduce the wait time of compensation from weeks to days.

Before your doors open, spend some time researching how you will organize your systems. There are many software options available to ease daily operations and workflow, and it’s much better to have these systems in place before you ever see your first patient.

 2. Human Resources

As a new practice owner, I suddenly found myself hiring and managing employees.  From the person who greets the patients at your front desk, to dental assistants, hygienists, and associate dentists, each team member will affect the success of your practice. I was not prepared for the reality of hiring, firing, and the difficult conversations I needed to have regularly.  Dental school did not teach me how to confront employees who were not behaving professionally or how to negotiate salaries.

One piece of advice I can pass along is to have a clear job description for each staff role, as well as a salary cap. Know exactly who you are looking for to fill each position and an explicit parameter for each salary.

3. Vendor Relationships

To run a successful dental practice you will need to build relationships with a wide range of vendors. From website development to dental supplies and everything in between, knowing who to hire and how to negotiate can save you dollars and headaches. I learned the hard way that you can’t always trust people. I poured a lot of money into a website design only to find out that the marketing person plagiarized the content from another dentist’s site in Texas. You don’t know what you don’t know! Or as Maya Angelou said “When you know better, you do better.” Having a mentor who is experienced in running a dental practice is invaluable. A mentor can introduce you to vetted vendors and you can avoid making costly mistakes.

You can avoid the tough, new business owner lessons . I can help. Let’s connect.