Owning Your Own Practice, Office, and Lab

[Frank22]

We all know that there are many dentists that own their own practice. There are even quite a few dentists that own their own office, this saves them about 4% overhead (usually about $48,000 a year), but couldn't a dentist own their own dental laboratory too? Since a dental lab. generally runs for 8% of expenses than a dentist can save 8% or more of overhead in owning one (and they're usually cheaper than buying an office or a practice too). In addition to that a dentist could make money off of the laboratory all together in serving other dentists. Thoughts?

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[7 Iron]

The dentist I went to for many years growing up owned his own building which included a lab in the basement. I'm not sure on the specifics or how much money is saved/earned this way--I'd love to talk to him about it--but I know he is doing EXTREMELY well.

 

[Frank22]

If you ever talk to him about it please let me know what sort of information acquire.

Assuming a dentist is working five days a week on a patient base of 1500 where each patient is providing $750 a year (on 98% collections and 60% overhead):

1500 x $750/year = $1,125,000-gross/year
$1,125,000 x 0.98 = $1,102,500-collections/year
$1,102,500 x 0.6 = $661,500-overhead
$1,102,500 - $661,500 = $441,000-net

If you own your own office you save 4%, or $44,100. Your lab is worth 8% of collections, or $88,200.

$441,000 + $44,100 + $88,200 = $573,300

So for an office grossing $1,125,000 a year the doctor would net $573,300 alone if they owned their own office and lab, this is not including the income generated by other doctors paying rent or the income of selling lab materials to other dentists.

 

[deleted462159]

We all know that there are many dentists that own their own practice. There are even quite a few dentists that own their own office, this saves them about 4% overhead (usually about $48,000 a year), but couldn't a dentist own their own dental laboratory too?

Probably--if the dentist has the time, capital, manpower, demand, etc. to operate it and the business structure/arrangement doesn't violate anti-kickback statutes or other laws.

 

[ttpharm]

I'm stupid. I thought dental practice/office were the same thing lol. Whats the difference? Dentist with dental office owns the whole building?

 

[Frank22]

I'm stupid. I thought dental practice/office were the same thing lol. Whats the difference? Dentist with dental office owns the whole building?

No; you buy a practice (almost always through a loan) that's going to be in an office. You must pay the owner rent for practicing in their office every month--for a healthy practice this is 4% of your total expenses. If you own the office you no longer pay rent and collect rent from every doctor working in your office.

Many times the office of a dentist is not a particularly great investment: the value of the office when you sell it will usually only be slightly higher than when you bought it taking into account inflation. However, over the years the money accumulated via owning the office can be notable: in the tens or hundreds of thousands.