Multiple practices

[CalabasasDental]

Can anyone give me insight on owning multiple practices and running them as a CEO? 3-5 practices?? How they did it? Income?

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[THS]

It generally starts with owning a single successful practice. Once the owner doc recognizes that this practice has hit that perfect formula of marketing, location, etc. and their new patient flow is overwhelming, they will apply that same formula to a second location. They then split their time between the two and may hire associates to keep both practices open full time. If the second practice is successful as well, they can continue to do this. Eventually, they can have enough passive income from these practices to step away and allow them to be run by associates.

Income is very variable, but lets use the national average for a solo practitioner and assume each practice has a gross income of $700k. If overhead is 60%, the owner doc could take home a net of $280k. Now if the owner doc instead hires an associate to work full time, and pays them 33% of their production, that associate would be paid around $154k (assuming that hygiene is providing 1/3 of the practice's gross production and the associate is producing the other 2/3). So subtract that associate's income from the net income and the owner doc can keep $126k without seeing a single patient. And that's just for one practice, using national averages. I would assume that if a dentist has a practice successful enough to open other locations, each practice is probably producing more than $700k.


ColdFront may be able to chime in with some solid info on this subject.

 

[SM555]

I'd also like to hear about the pros and cons of multiple offices in the same city and different cities to go a long with what the OP stated

 

[Miley Cyrus.]

ya...any thoughts @Cold Front ???

 

[xkc9126x]

edit 10/1/15:

 

[Cold Front]

It generally starts with owning a single successful practice. Once the owner doc recognizes that this practice has hit that perfect formula of marketing, location, etc. and their new patient flow is overwhelming, they will apply that same formula to a second location. They then split their time between the two and may hire associates to keep both practices open full time. If the second practice is successful as well, they can continue to do this. Eventually, they can have enough passive income from these practices to step away and allow them to be run by associates.

Income is very variable, but lets use the national average for a solo practitioner and assume each practice has a gross income of $700k. If overhead is 60%, the owner doc could take home a net of $280k. Now if the owner doc instead hires an associate to work full time, and pays them 33% of their production, that associate would be paid around $154k (assuming that hygiene is providing 1/3 of the practice's gross production and the associate is producing the other 2/3). So subtract that associate's income from the net income and the owner doc can keep $126k without seeing a single patient. And that's just for one practice, using national averages. I would assume that if a dentist has a practice successful enough to open other locations, each practice is probably producing more than $700k.


ColdFront may be able to chime in with some solid info on this subject.

You are right on all accounts.

Here is what I did to get to 3 locations. All offices are setup as separate entities (LLC's) with different names.

Practice #1 (2010)
I opened it in retail center within 6 months after I graduated (summer of 2010). A lot of foot traffic and high visibility. Although I wont disclose my actual numbers, it took 18 months to grow from 2 ops to 5 ops. The formula you had for $700k was achieved. This was a ground up construction office, 2,000 sft. Overhead was about 55%.

Practice #2 (2012)
The formula from practice #1 was repeated. Again, high visibilty and street traffic. Ground up construction too, your forumala for $700k was achieved around the 10th month (for months 11 - 23). A mjor national dental chain in the area closed (Small Smiles), so we picked up a lot of new patients from day 1. I knew the closing of Small Smiles through the media during the planning phase, so the office was built to accomadate the Small Smiles patients too. 3,500 sft with 13 ops (8 hygiene rooms, 5 doctor rooms). Ovehead was 50%.

Practice #3 (2013)
Same formula here, but in a medical office that has a large Childrens medical clinic (5 physicians). This was strictly pediatric population office, tons of hygiene, xrays, sealants and prophies. The space was originally part of the Children medical clinic, but they didn't utilize it to full capacity - so I leased it from them. 2,500 sft, 8 ops. Overhead is 25% (as I said, hygiene based office - with only 20% of production coming from general dentistry).

Practice #1 (2014/2015) moves to a new building.
My 5 years lease expires, so I buy a half acre ourparcel lot within the plaza and build a new building. More visibility. Overhead dips closer to 45% because there is no lardlord (rent payments), and part of the building is leased to a national tenant that covers the mortgage.

Practice #2 (2017) has plans to buy the landlord out.
The goal here is to own the building (10,000 sft) and get other 4 tenants to pay for mortgage. Overhead should be closer to 40% after this happens. This is a 2017 plan, about 18 months from now.

Hope this clarifies the concept of owning multiple practices. At least from my experience.

 

[deleted659902]

You are right on all accounts.

Here is what I did to get to 3 locations. All offices are setup as separate entities (LLC's) with different names.

Practice #1 (2010)
I opened it in retail center within 6 months after I graduated (summer of 2010). A lot of foot traffic and high visibility. Although I wont disclose my actual numbers, it took 18 months to grow from 2 ops to 5 ops. The formula you had for $700k was achieved. This was a ground up construction office, 2,000 sft. Overhead was about 55%.

Practice #2 (2012)
The formula from practice #1 was repeated. Again, high visibilty and street traffic. Ground up construction too, your forumala for $700k was achieved around the 10th month (for months 11 - 23). A mjor national dental chain in the area closed (Small Smiles), so we picked up a lot of new patients from day 1. I knew the closing of Small Smiles through the media during the planning phase, so the office was built to accomadate the Small Smiles patients too. 3,500 sft with 13 ops (8 hygiene rooms, 5 doctor rooms). Ovehead was 50%.

Practice #3 (2013)
Same formula here, but in a medical office that has a large Childrens medical clinic (5 physicians). This was strictly pediatric population office, tons of hygiene, xrays, sealants and prophies. The space was originally part of the Children medical clinic, but they didn't utilize it to full capacity - so I leased it from them. 2,500 sft, 8 ops. Overhead is 25% (as I said, hygiene based office - with only 20% of production coming from general dentistry).

Practice #1 (2014/2015) moves to a new building.
My 5 years lease expires, so I buy a half acre ourparcel lot within the plaza and build a new building. More visibility. Overhead dips closer to 45% because there is no lardlord (rent payments), and part of the building is leased to a national tenant that covers the mortgage.

Practice #2 (2017) has plans to buy the landlord out.
The goal here is to own the building (10,000 sft) and get other 4 tenants to pay for mortgage. Overhead should be closer to 40% after this happens. This is a 2017 plan, about 18 months from now.

Hope this clarifies the concept of owning multiple practices. At least from my experience.

So when it's all said and done, how much $$$ do you take home per year? For science, of course...

 

[CanaDMD]

So when it's all said and done, how much $$$ do you take home per year? For science, of course...

It would be interesting to know how much take home 3 initially successful clinics in good locations brings

 

[Cold Front]

So when it's all said and done, how much $$$ do you take home per year? For science, of course...

I will plead the fifth here.

If you chase money, you will never enjoy dentistry. I very much love challenging myself and push for more potential. Being a great clinician is not enough.

 

[CanaDMD]

I will plead the fifth here.

If you chase money, you will never enjoy dentistry. I very much love challenging myself and push for more potential. Being a great clinician is not enough.

No need for any specific numbers. Can you just send us towards the right ball park? LOL

 

[Cold Front]

No need for any specific numbers. Can you just send us towards the right ball park? LOL

Any number (whether mine or not) will not mean another dentist can earn the same figures too?

But it is safe to say, that... It's possible to make (let's say) $2 mill a year take home from 3 practices, while its also possible to make that same number at 1 or 2 offices.

The bottom line is how a doctor runs his office(s).

 

[SM555]

.

 

[CanaDMD]

Any number (whether mine or not) will not mean another dentist can earn the same figures too?

But it is safe to say, that... It's possible to make (let's say) $2 mill a year take home from 3 practices, while its also possible to make that same number at 1 or 2 offices.

The bottom line is how a doctor runs his office(s).

Very true!

No, your numbers do not mean another dentist can earn the same figures, but it's simply interesting to know what some dentists are making in today's market.

Thank you though!

 

[toothsleuth11]

Very easy.
1)Get into dental school
2) Cruise your way through school because fack it, C's get degreses right?!
3) Carry that same carefree mentality into your private practice/business because "who really cares if I try or not"
4) own multiple practices. PM if you have questions

 

[Incis0r]

If you chase money, you will never enjoy dentistry. I very much love challenging myself and push for more potential. Being a great clinician is not enough.

I have a "Greatest Quotes" journal in which I pencil in motivational things I've read/heard, and just sayings that I like to live my life by. It has quotes from people like Lincoln and Socrates.

Guess who is the first person ever from SDN that I have quoted in that journal?

 

[embrojam]

Any number (whether mine or not) will not mean another dentist can earn the same figures too?

But it is safe to say, that... It's possible to make (let's say) $2 mill a year take home from 3 practices, while its also possible to make that same number at 1 or 2 offices.

The bottom line is how a doctor runs his office(s).

Assuming you have dental associates at your other practices, how do you deal with turnover? With an assoc run practice, where the dentist turns every 2-3 years, I would imagine you'd lose patients who would want to go to an owner-operator practice, with one consistent dentist?

 

[Incis0r]

@Cold Front ,

Another question:
I assume you did NOT have any business experience or related education prior to dental school, correct? If so, can you please share what resources were helpful in getting started with the idea of multiple practices? Did you take any courses or read any books that helped you a ton/gave you that "Aha!" moment?

 

[byoung]

hi @Cold Front , I'm just curious what your role is at each of those three offices. Do you regularly see patients at all three? Or do you primarily work at one office? Or do you focus on running the 'businesses' and hire associates to take care of the majority of the dental care? Thanks for being so open about your experiences.

 

[Cold Front]

Assuming you have dental associates at your other practices, how do you deal with turnover? With an assoc run practice, where the dentist turns every 2-3 years, I would imagine you'd lose patients who would want to go to an owner-operator practice, with one consistent dentist?

Great question.

This is the number 1 problem for doctors who own multiple offices. In fact, there is a doctor I know locally who owns 3 offices in my city who just listed one of his practices today because he had enough with one of his associates who runs the 3rd office for him.

For me, I went through 3-4 associates the past 4-5 years. For the life of me, I never understand why some dentists don't realize their full potential and simply don't put a good effort in their day schedule. The biggest issues were just not working confidently and having a big productive day at the same time. Some would just come across as ambitious and hard working during interviews, then they turn out to be the opposite.

Right now, I have one associate and 3 hygienists. We rotate between offices and consolidate our schedule per office to 50-60 patients a day (60% are hygiene patients). So we hit each office as a group, while the other 2 offices are closed. This is traditionally how orthodontists with multiple practices function, and helps overhead down and keeps the staff and doctors very busy. If all 3 offices had 1 doctor and 1 hygienist each, the overhead would be much higher and schedule would be more scattered. Ultimately, as an owner, I'm involved with all operations and there is less turn over with the current associate and staff.

 

[Cold Front]

hi @Cold Front , I'm just curious what your role is at each of those three offices. Do you regularly see patients at all three? Or do you primarily work at one office? Or do you focus on running the 'businesses' and hire associates to take care of the majority of the dental care? Thanks for being so open about your experiences.

See my previous post.

I'm involved with all 3 offices day to day operations. My break-even numbers are less this way and essentially more connected with my staff.

 

[SM555]

Hi @Cold Front First off, thanks for your previous answers on this thread. I was hoping you could answer a few more specific things about your practices.
What is the population of the city you have your practices in? Do you think another size of city would be better?
With multiple practices means multiple associate dentists. How do you insure they are all performing the quality dental care required to build a good reputation in the community?

 

[fancymylotus]

We own three practices locally. We have six other associates besides my dad/boss/owner, along with four hygienists who all rotate amongst the practices. He does not see many patients anymore and is more involved with the admin/business side of things.

It's possible, with the right systems and staff in place.

 

[Cold Front]

Hi @Cold Front First off, thanks for your previous answers on this thread. I was hoping you could answer a few more specific things about your practices.
What is the population of the city you have your practices in? Do you think another size of city would be better?
With multiple practices means multiple associate dentists. How do you insure they are all performing the quality dental care required to build a good reputation in the community?

Population is about 2 million (including suburbs). This is relatively saturated city, 1 Dental school about 200 practices (including specialists and Owers with multiple offices).

I work at all my offices so I see all patients, from hygiene to associate dentist. I see the patients who praise or criticize first hand, because I work at each office. This is very important to me. I'm involved with all resolutions for patients, and track it through monthly staff meeting at each office if I didn't catch anything.

 

[Cold Front]

We own three practices locally. We have six other associates besides my dad/boss/owner, along with four hygienists who all rotate amongst the practices. He does not see many patients anymore and is more involved with the admin/business side of things.

It's possible, with the right systems and staff in place.

So you consolidate patients too and have big days? All 6 associates go to 1 office together at a time? That must the same system I have, but on steroids!

 

[fancymylotus]

So you consolidate patients too and have big days? All 6 associates go to 1 office together at a time? That must the same system I have, but on steroids!

No, we're spread out. No more than 3 per office at a time. I'm the only general dentist, everyone else is a specialist

 

[Cold Front]

@Cold Front ,

Another question:
I assume you did NOT have any business experience or related education prior to dental school, correct? If so, can you please share what resources were helpful in getting started with the idea of multiple practices? Did you take any courses or read any books that helped you a ton/gave you that "Aha!" moment?

No previous business experience. But had a circle of colleagues and friends who had tons of business experience. I started asking the questions from first year of school to this day.

Some basic personal finance books, which helped with how to have great a good credit and financial discipline.

 

[FrownUpsideDown]

Hi Cold Front, thank you so much for your input.

I'd like to ask you a question about your obstacles as you were starting out. Could you please tell us about things that were difficult for you in the beginning whether it was practicing dentistry or managing a practice, and how you managed them?

Also do you have any advice for future graduates like me? Should I focus on learning as much dentistry as possible or should I work towards learning about business as well?

Thank you!

 

[embrojam]

No previous business experience. But had a circle of colleagues and friends who had tons of business experience. I started asking the questions from first year of school to this day.

Some basic personal finance books, which helped with how to have great a good credit and financial discipline.

Were banks always open with their pocketbooks, or only once you had developed your credit? Did you have any cosigners at the start?

 

[shallsen]

No previous business experience. But had a circle of colleagues and friends who had tons of business experience. I started asking the questions from first year of school to this day.

Some basic personal finance books, which helped with how to have great a good credit and financial discipline.

Any specific books that were more helpful than the others?

 

[Cold Front]

Hi Cold Front, thank you so much for your input.

I'd like to ask you a question about your obstacles as you were starting out. Could you please tell us about things that were difficult for you in the beginning whether it was practicing dentistry or managing a practice, and how you managed them?

Also do you have any advice for future graduates like me? Should I focus on learning as much dentistry as possible or should I work towards learning about business as well?

Thank you!

The hardest part of running a dental office are staff. I went trhough 4 doctors, 3 hygienists, 3 front desk girls and 7 assistants the past 5 years. I learned a lot from letting people go, made my whole approach to hiring new staff more efficient. The current team has been with me 2-3 years, so the staff revolving door has definitely slowed down for my offices. It's pretty normal in the begining to adjust through the staff.

 

[Cold Front]

Were banks always open with their pocketbooks, or only once you had developed your credit? Did you have any cosigners at the start?

No cosginer. Worked on my credit during dental school - it was polished by the time I applied for loans.

 

[Daneosaurus]

Very easy.
1)Get into dental school
2) Cruise your way through school because fack it, C's get degreses right?!
3) Carry that same carefree mentality into your private practice/business because "who really cares if I try or not"
4) own multiple practices. PM if you have questions

Not at my school! We have to keep a 2.60 GPA.

 

[PocketRocket]

How much more expensive would it be to build or add a second/third/fourth floor with an elevator to your already established practice?

Is that something a dentist would even want to do?