Owning a Practice

[JackyTreehorn]

Also ain't no one paying down 250k on a 140k salary in 5 years.

I did. I saved the now empty bottle of 18yr Elijah Craig bourbon with the date on it to mark the day. Paid off a 255k student loan balance in 4.5 years, with no help but my own two hands. I started from zero. I'll admit to your point that it's not the norm, as most of my peers are still dealing with their loans in one way or another.

Graduated and started practice in 2012, I'd say on average I've been around the 150k mark with some years above and some below. It's possible to do, but I literally ate rice and beans for years, I lived in my parent's basement for 2 years after I graduated in addition to living in other absolute dumps. Pretty rough quality of life those first 4-5 years.

I'm entering my 10th year of practice soon at a private practice. I'm not sure what's next for me, and I've explored pretty much everything....nearly even bought a 500-700k practice. Not so sure right now...I've dived deep into it all

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[PerioDont]

I did. I saved the now empty bottle of 18yr Elijah Craig bourbon with the date on it to mark the day. Paid off a 255k student loan balance in 4.5 years, with no help but my own two hands. I started from zero. I'll admit to your point that it's not the norm, as most of my peers are still dealing with their loans in one way or another.

Graduated and started practice in 2012, I'd say on average I've been around the 150k mark with some years above and some below. It's possible to do, but I literally ate rice and beans for years, I lived in my parent's basement for 2 years after I graduated in addition to living in other absolute dumps. Pretty rough quality of life those first 4-5 years.

I'm entering my 10th year of practice soon at a private practice. I'm not sure what's next for me, and I've explored pretty much everything....nearly even bought a 500-700k practice. Not so sure right now...I've dived deep into it all

congratulations!! that's an amazing accomplishment. you made a lot of sacrifices to get there for sure.

the typical thing I see is lease a brand new BMW a few weeks after graduation and then move into a fancy place. Stack debt up to your eyeballs to live a 'doctor' lifestyle while your student loan balance just grows and grows. I do understand it as you have sacrificed those four years while your peers were out in the world starting to buy houses, get married etc and you want to show that you are something too. Most people are nowhere near as disciplined as you.

 

[JackyTreehorn]

congratulations!! that's an amazing accomplishment. you made a lot of sacrifices to get there for sure.

the typical thing I see is lease a brand new BMW a few weeks after graduation and then move into a fancy place. Stack debt up to your eyeballs to live a 'doctor' lifestyle while your student loan balance just grows and grows. I do understand it as you have sacrificed those four years while your peers were out in the world starting to buy houses, get married etc and you want to show that you are something too. Most people are nowhere near as disciplined as you.

Yep, sweep them under the rug, pay minimum for 20-25 yrs and be left with an unknown balance to pay taxes on the forgiveness (if that's still a thing). Doing the math, that was a lot of moolah down the tubes, and a fuzzy end game.

To the OP:

- Good associateships are hard to come by. There's a lot of jobs for dentists out there. But not a lot a lot of GOOD ones. Mostly corporate offerings. A few rare gems exist, but it's like finding a needle in a hay stack. You may go through a few before you land on one that sticks. You can play your loans however suits you...I chose to live like a homeless person for 5 years, but that does not work for everyone's situation.

- Owning or buying a turn-key practice that has instant cashflow as a new grad is much better than attempting a startup as a new grad. Either way isn't going to be easy but it's possible if you are a go-getter and have a mentor to help you through the early days of your career. Practice debt, rent or real estate debt, student debt, assuming you will be buying a home one day....you're looking at a lot of debt. Maybe even over a million. Believe me, it's possible to do and still net some money....I'm not sure how much in the end you'll be netting, but your loans will certainly be serviceable and that's all the banks care about...

-It may be worthwhile to be an associate for 5-7 years and get a lot of experience under your belt...pay your loans off and then look at buying. Some practices are looking for associates to transition in that time to ownership.

 

[Cold Front]

There's a lot of jobs for dentists out there. But not a lot a lot of GOOD ones.

Most pre-dents think becoming a dentist = many GOOD jobs.

Here is my opinion on the topic of “GOOD jobs”:

1. Some dentists consider a short commute to work is a good job. I think young dentists are making urban areas more saturated, so the new jobs are now further and further away from where they live and socialize - which is not good.

2. Majority of dentists consider working in a private practice as a “Good job”. Well, DSO’s are expanding rapidly and hiring most young dentists at a record pace. So, in this sense, the majority of new jobs are available at corporations - which is also not good.

3. Practice ownership use to be (still is) the “dream job”. Well, with high student loans + higher cost to build or buy a practice = a very risky proposition. Definitely not good.

4. Inflation relative to income has been very asymmetrical. Most dentists income has a direct relationship with insurance reimbursements, which has been very stagnant for close to couple of decades. The world around us is becoming more expensive to live in; home ownership prices and rentals have gone up exponentially the past few years, as well as most of what we consume. Which means, average dentist income has been going down, not up, in recent years. Absolutely bad!

5. Most dentist jobs (associate jobs) are production based (with goals), and a dentist would make a percentage of what they produce. Well, those goals are very difficult to hit for most dentists - as employers try to keep up with their rising expenses in payroll, rent, etc. So when goals are not met, for whatever reason, the associate becomes at odds with the ownership, and that’s usually the beginning of the end on that relationship. Many offices have clinical directors who are IMO the “jockeys” in the process, and they usually whip the associate dentists to hit their goals. This job setup always has a bad endgame.

With that being said, good jobs exist, but are becoming rare every year - and heading to extinction in my book, specially if corporations continue to grow and inflation heats up in the years ahead, and both will be in the foreseeable future.

 

[JackyTreehorn]

Most pre-dents think becoming a dentist = many GOOD jobs.

Here is my opinion on the topic of “GOOD jobs”:

1. Some dentists consider a short commute to work is a good job. I think young dentists are making urban areas more saturated, so the new jobs are now further and further away from where they live and socialize - which is not good.

2. Majority of dentists consider working in a private practice as a “Good job”. Well, DSO’s are expanding rapidly and hiring most young dentists at a record pace. So, in this sense, the majority of new jobs are available at corporations - which is also not good.

3. Practice ownership use to be (still is) the “dream job”. Well, with high student loans + higher cost to build or buy a practice = a very risky proposition. Definitely not good.

4. Inflation relative to income has been very asymmetrical. Most dentists income has a direct relationship with insurance reimbursements, which has been very stagnant for close to couple of decades. The world around us is becoming more expensive to live in; home ownership prices and rentals have gone up exponentially the past few years, as well as most of what we consume. Which means, average dentist income has been going down, not up, in recent years. Absolutely bad!

5. Most dentist jobs (associate jobs) are production based (with goals), and a dentist would make a percentage of what they produce. Well, those goals are very difficult to hit for most dentists - as employers try to keep up with their rising expenses in payroll, rent, etc. So when goals are not met, for whatever reason, the associate becomes at odds with the ownership, and that’s usually the beginning of the end on that relationship. Many offices have clinical directors who are IMO the “jockeys” in the process, and they usually whip the associate dentists to hit their goals. This job setup always has a bad endgame.

With that being said, good jobs exist, but are becoming rare every year - and heading to extinction in my book, specially if corporations continue to grow and inflation heats up in the years ahead, and both will be in the foreseeable future.

100% agreed on all of that. It's a minefield out there. I tell young grads that want to do private practice to run for the hills, literally. Go find a family owned private practice out in middle of nowhere Palatka or Dunnellon where patient's got no teeth, no insurance, no choice. Or a lot of retiring boomers with aging dentistry about to fall apart. Good paying folks, deep pockets. Willing to invest in their bridges, partials, implants. You don't find it downtown in trendy cities where the young guns wanna be. Plus you'll actually be able to afford a house, maybe.

 

[Cold Front]

100% agreed on all of that. It's a minefield out there. I tell young grads that want to do private practice to run for the hills, literally. Go find a family owned private practice out in middle of nowhere Palatka or Dunnellon where patient's got no teeth, no insurance, no choice. Or a lot of retiring boomers with aging dentistry about to fall apart. Good paying folks, deep pockets. Willing to invest in their bridges, partials, implants. You don't find it downtown in trendy cities where the young guns wanna be. Plus you'll actually be able to afford a house, maybe.

That too.

In 2020, during the pandemic, associate dentist jobs dried up. On dental town, the largest online dentist forums, use to have an average of about 4,000+ jobs posted, it now averages about 1,000 jobs - and almost all of them are corporate office jobs.

Interestingly, the number of practices for-sale went doubled, from 1,000 to 2,000 - which I’m sure are all competing for a very small pool of buyers. All the while, schools are graduating every year new dentists with fewer clinical skills, specially during the pandemic, which creates a skill gap between new dentists and the jobs they apply for - they are learning more on the job than ever before.

It’s difficult time for the associate dentist job market in general. Although many offices are busy and seeing a pent-up demand, the future is still uncertain.

 

[PerioDont]

Most pre-dents think becoming a dentist = many GOOD jobs.

Here is my opinion on the topic of “GOOD jobs”:

1. Some dentists consider a short commute to work is a good job. I think young dentists are making urban areas more saturated, so the new jobs are now further and further away from where they live and socialize - which is not good.

2. Majority of dentists consider working in a private practice as a “Good job”. Well, DSO’s are expanding rapidly and hiring most young dentists at a record pace. So, in this sense, the majority of new jobs are available at corporations - which is also not good.

3. Practice ownership use to be (still is) the “dream job”. Well, with high student loans + higher cost to build or buy a practice = a very risky proposition. Definitely not good.

4. Inflation relative to income has been very asymmetrical. Most dentists income has a direct relationship with insurance reimbursements, which has been very stagnant for close to couple of decades. The world around us is becoming more expensive to live in; home ownership prices and rentals have gone up exponentially the past few years, as well as most of what we consume. Which means, average dentist income has been going down, not up, in recent years. Absolutely bad!

5. Most dentist jobs (associate jobs) are production based (with goals), and a dentist would make a percentage of what they produce. Well, those goals are very difficult to hit for most dentists - as employers try to keep up with their rising expenses in payroll, rent, etc. So when goals are not met, for whatever reason, the associate becomes at odds with the ownership, and that’s usually the beginning of the end on that relationship. Many offices have clinical directors who are IMO the “jockeys” in the process, and they usually whip the associate dentists to hit their goals. This job setup always has a bad endgame.

With that being said, good jobs exist, but are becoming rare every year - and heading to extinction in my book, specially if corporations continue to grow and inflation heats up in the years ahead, and both will be in the foreseeable future.

I still feel that ownership is a better bet than job hopping looking for a 'good' associate position where the owner is not cherry picking all the crowns and good cases and there is enough pt flow etc. Isn't the average owner income still around 100k higher than the average associate income?

Of course if you want to be the owner of a fancy practice that costs hundreds of thousands, you will have much more financial pressures. But my understanding is that if you do a small two, maybe three chair startup in the right demographics with two employees and no hyg at the beginning (key is low OH), you will likely end up in a better financial position than many if not most associate jobs. And you can grow the practice and eventually maybe sell it as an asset as well later on. That's my plan at least. I can't really stand the idea of having a boss over me either, though maybe that is just my personality.

 

[2TH MVR]

I still feel that ownership is a better bet than job hopping looking for a 'good' associate position where the owner is not cherry picking all the crowns and good cases and there is enough pt flow etc. Isn't the average owner income still around 100k higher than the average associate income?

Of course if you want to be the owner of a fancy practice that costs hundreds of thousands, you will have much more financial pressures. But my understanding is that if you do a small two, maybe three chair startup in the right demographics with two employees and no hyg at the beginning (key is low OH), you will likely end up in a better financial position than many if not most associate jobs. And you can grow the practice and eventually maybe sell it as an asset as well later on. That's my plan at least. I can't really stand the idea of having a boss over me either, though maybe that is just my personality.

I think we can all agree that ownership is better, but it has been well documented that private practice in a saturated urban center will be difficult. If you must be in an urban area ..... DIVERSIFY. Most of you cannot do what @Cold Front does with his multiple businesses. Therefore open or buy a small practice in a well-thought out niche area ...... and then plan on travelling to a PT Corp job elsewhere.

I don't see the point of buying a huge, expensive practice. Such a gamble. Start small. Small initial investment. Maybe share space with a specialist.

Start small. Less financial risk. Build it up with word of mouth. Community involvement such as Rotory clubs. Involvement in local dental govt.

Regardless of where you set up shop .... eventually competition (other GPS, DSO's) will find you. That's reality.

For an older dentist. Ownership may not be ideal. Revenue declining due to age and poor business practices. At some point the hassle of owning and operating a business will be too much hassle for the compensation. Smart thinking is to sell your assets (practice, real estate) while it is still worth something. How many older dentists waited too long .... and then their practice was worth nothing?

 

[yappy]

I still feel that ownership is a better bet than job hopping looking for a 'good' associate position where the owner is not cherry picking all the crowns and good cases and there is enough pt flow etc. Isn't the average owner income still around 100k higher than the average associate income?

Of course if you want to be the owner of a fancy practice that costs hundreds of thousands, you will have much more financial pressures. But my understanding is that if you do a small two, maybe three chair startup in the right demographics with two employees and no hyg at the beginning (key is low OH), you will likely end up in a better financial position than many if not most associate jobs. And you can grow the practice and eventually maybe sell it as an asset as well later on. That's my plan at least. I can't really stand the idea of having a boss over me either, though maybe that is just my personality.

I've had several friends do this and they're successful. One is even in a highly desirable area. I don't get why so many people stay at a corporate or assume they're doing something they cant. The business end of dentistry is literally the easiest part of the job.

 

[PerioDont]

I've had several friends do this and they're successful. One is even in a highly desirable area. I don't get why so many people stay at a corporate or assume they're doing something they cant. The business end of dentistry is literally the easiest part of the job.

My personal plan as a periodontist is to start by renting some chairs in an endo office. Once I build my reputation and referrals come in and some $$ as well, branch into my own location and go from there.

Stay small, low overhead, lean and mean.

This is a really cool blog of a GP who has done a really lean startup: Practice Biopsy – A Look Inside the Business of Dentistry

 

[bergus95]

U

 

[2TH MVR]

I've had several friends do this and they're successful. One is even in a highly desirable area. I don't get why so many people stay at a corporate or assume they're doing something they cant. The business end of dentistry is literally the easiest part of the job.

Long term Corp employment just seems like a deadend for younger dentists. Fine initially to build speed, reps and experience and make a little money. but later ....will seem mundane. I guess you could say that about any employee job.

As for the business side of private practice. Yes. Easy when you are making plenty of money to justify the LONG hours involved in running a small business. I've also posted many times that a dentist specific acct on retainer or paid monthly is such a benefit. But make no mistake. As a business owner ..... MANY, MANY people will have their hands extended out for you to put money in. It never ends.

Staff: Staff expect raises. In order to give raises .... revenue has to increase, or a new hire needs to come in at a lower salary to replace a long term employee. Always a balancing act.
Healthcare costs: Every yr .... I would have to negotiate the health insurance premiums for myself, my family and staff that made up my "SMALL" little group. Every yr .... those premiums would rise. Every yr .... I would have to choose ever higher deductibles just to keep the monthly premium the same. EVERY YEAR.
RENT. I had 2 locations. One I controlled the lease (mortgage payment) since I owned the real estate. The other was located in a retail area. The annual lease would rise EVERY year. That's how it works. If you want to be somewhere desirable ..... the lease will be high. The lease never goes down. Always up. Again ....will need more revenue to make up the difference.
INSURANCE: Every year the insurance needed to run a small business will INCREASE. Malpractice ins. Business liability ins. Health ins. Personal disability ins (this usually stays the same). Insurance on your building if you own. Insurance on your suite ... if you lease.
Utilities: typically increase over time. Phone. water. power. advertising. Internet.
IT fees. Always increases. Anything with computers will require expensive maintenance to repair or replace. Every few yrs the practice software company would be telling me to upgrade the hardware. EVERY few yrs.
How about those misc. Backflow preventer maintenance fees ...EVERY year. Fire inspection fees.
If you have a bank loan .... expect EVERY year to provide necessary insurance verification and income verification to the lender. EVERY yr.
Simple things like making sure your office is CLEAN. Do you hire outside cleaners or does the staff do this?
TAXES. Never end. Funny thing is I sold my practices over 4 yrs ago and most recently sold my commercial real estate building. I'M STILL DEALING WITH TAXES with these sales. Rental taxes on the commercial building.

TIME. I spent plenty of this commodity. Arrived early to the office. Made sure all the computers were up and running. Made sure the office was clean. Paid the never ending bills. Checked my schedule to see if I was visiting any GP offices to "ask" for referrals. And during all of this .... I was treating patients. Returning calls to referring dentists. Talking to my tax acct and personal finance advisor.

It never end. This is just a small taste of what running a private practice is like.

Is it easy? If you make PLENTY of money ... it is easy. If you make average money. No thanks.

 

[charlestweed]

I've had several friends do this and they're successful. One is even in a highly desirable area. I don't get why so many people stay at a corporate or assume they're doing something they cant. The business end of dentistry is literally the easiest part of the job.

People stay at the corp because of the stable income flow….guaranteed daily pay, regardless of what happens to the economy. No overhead to worry about. No competition to worry about. I’ve been out for nearly 20 years and I still can’t completely quit my good paying job at the corp. Currently, I work 11 days/month for corp and 11 days/month at 4 of my own offices. Having a steady income flow from the corp job has helped reduce the stress of running my own offices. If there were no the corp offices, I wouldn’t come on here to say good things about my profession.

 

[Cold Front]

Long term Corp employment just seems like a deadend for younger dentists. Fine initially to build speed, reps and experience and make a little money. but later ....will seem mundane. I guess you could say that about any employee job.

As for the business side of private practice. Yes. Easy when you are making plenty of money to justify the LONG hours involved in running a small business. I've also posted many times that a dentist specific acct on retainer or paid monthly is such a benefit. But make no mistake. As a business owner ..... MANY, MANY people will have their hands extended out for you to put money in. It never ends.

Staff: Staff expect raises. In order to give raises .... revenue has to increase, or a new hire needs to come in at a lower salary to replace a long term employee. Always a balancing act.
Healthcare costs: Every yr .... I would have to negotiate the health insurance premiums for myself, my family and staff that made up my "SMALL" little group. Every yr .... those premiums would rise. Every yr .... I would have to choose ever higher deductibles just to keep the monthly premium the same. EVERY YEAR.
RENT. I had 2 locations. One I controlled the lease (mortgage payment) since I owned the real estate. The other was located in a retail area. The annual lease would rise EVERY year. That's how it works. If you want to be somewhere desirable ..... the lease will be high. The lease never goes down. Always up. Again ....will need more revenue to make up the difference.
INSURANCE: Every year the insurance needed to run a small business will INCREASE. Malpractice ins. Business liability ins. Health ins. Personal disability ins (this usually stays the same). Insurance on your building if you own. Insurance on your suite ... if you lease.
Utilities: typically increase over time. Phone. water. power. advertising. Internet.
IT fees. Always increases. Anything with computers will require expensive maintenance to repair or replace. Every few yrs the practice software company would be telling me to upgrade the hardware. EVERY few yrs.
How about those misc. Backflow preventer maintenance fees ...EVERY year. Fire inspection fees.
If you have a bank loan .... expect EVERY year to provide necessary insurance verification and income verification to the lender. EVERY yr.
Simple things like making sure your office is CLEAN. Do you hire outside cleaners or does the staff do this?
TAXES. Never end. Funny thing is I sold my practices over 4 yrs ago and most recently sold my commercial real estate building. I'M STILL DEALING WITH TAXES with these sales. Rental taxes on the commercial building.

TIME. I spent plenty of this commodity. Arrived early to the office. Made sure all the computers were up and running. Made sure the office was clean. Paid the never ending bills. Checked my schedule to see if I was visiting any GP offices to "ask" for referrals. And during all of this .... I was treating patients. Returning calls to referring dentists. Talking to my tax acct and personal finance advisor.

It never end. This is just a small taste of what running a private practice is like.

Is it easy? If you make PLENTY of money ... it is easy. If you make average money. No thanks.

So much gold and gems in this post. @2TH MVR is a national treasure on SDN forums. lol

 

[2TH MVR]

So much gold and gems in this post. @2TH MVR is a national treasure on SDN forums. lol

Ahhhhh. You're making me blush.