Serious question. I see job postings online offering positions for associate general dentists with salaries ranging from 170k all the way up to 300k. With the huge cost of buying a practice and the headaches that come with it. Why not just work as an associate at this guaranteed salary and not take out a massive loan to buy your own?
What’s the point of owning your own practice?
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There's no right answer for everyone.
Some people are satisfied with that setup and income and do associate forever.
Benefits of owning a practice include- far greater income potential when you get paid not only on what YOU produce but also hygiene, specialists, other associates (ie 2x-5x that income), tax benefits of owning your own business (meaning you take home more of what you keep), not relying on someone else keeping you employed or firing you at will (*big one), working everyday with assistants or other office staff that you may not get along with but have to work with because the owner keeps them around, difference in treatment philosophy from the owner, potential pressure to produce more or see more patients (esp with corporate).
But yeah, lots of people associate forever and are okay with it too (otherwise multi-practice owners wouldn't exist!). Because you're right, it's a lot of headache and a lot of stress to manage people and run a business. But some would take that over the stress of- "will I have a job tomorrow if this owner dr decides to fire me".
Some people are satisfied with that setup and income and do associate forever.
Benefits of owning a practice include- far greater income potential when you get paid not only on what YOU produce but also hygiene, specialists, other associates (ie 2x-5x that income), tax benefits of owning your own business (meaning you take home more of what you keep), not relying on someone else keeping you employed or firing you at will (*big one), working everyday with assistants or other office staff that you may not get along with but have to work with because the owner keeps them around, difference in treatment philosophy from the owner, potential pressure to produce more or see more patients (esp with corporate).
But yeah, lots of people associate forever and are okay with it too (otherwise multi-practice owners wouldn't exist!). Because you're right, it's a lot of headache and a lot of stress to manage people and run a business. But some would take that over the stress of- "will I have a job tomorrow if this owner dr decides to fire me".
D
deleted659902
there is no income ceiling with ownership (plus you build an equity by buying a practice)
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If your aim is to be a GP, I strongly recommend partnering/starting your own practice.
From speaking to my GP friends, it seems most are fed up with their associateships, and 3 yrs out of school, all are trying to either start up or purchase a practice. With associateships, the compensation package varies so broadly. Some luck out and end up in amazing positions, where they get a solid percentage of everything, including hygiene, and solid benefits. But many do not; some owners cherry pick the big production cases, others don't have the patient load to support another Doc etc.
For specialists, since demand tends to be higher, and there are simply less of us, it seems its not that difficult to stay as an associate and get paid well. Not as difficult to find another position if an office is slow, unethical, etc. However, the owners do much, much better, and once again-job security.
From speaking to my GP friends, it seems most are fed up with their associateships, and 3 yrs out of school, all are trying to either start up or purchase a practice. With associateships, the compensation package varies so broadly. Some luck out and end up in amazing positions, where they get a solid percentage of everything, including hygiene, and solid benefits. But many do not; some owners cherry pick the big production cases, others don't have the patient load to support another Doc etc.
For specialists, since demand tends to be higher, and there are simply less of us, it seems its not that difficult to stay as an associate and get paid well. Not as difficult to find another position if an office is slow, unethical, etc. However, the owners do much, much better, and once again-job security.
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One thing that sucks about being an associate is the lack of control. My first year out I made about 220k but my boss was a jerk about getting personal days off and I only got to miss two days when one of my kids was born. I also had to deal with my boss deciding to add another associate to the office where I worked to grow his practice. It made perfect sense to him because it meant more overall collections for the office and more profit for him but in the mean time my $18,000 a month income was going to turn into $10,000 or $11,000 a month due to sharing production.
Now that I am in ownership I don’t have to work as hard to make a dollar because I am in control of everything. I no longer take crappy paying PPO plans so I don’t do any $500 crowns or anything close to that like I used to. I also made 33% as an associate and keep a much larger percentage now. I don’t have to ask anyone to take a day off or worry about sharing my production with a new associate.
I don’t know why anyone that is really good would stay as a long term associate. If you are good enough to make 300k year after year as an associate you’ll probably make 500k as an owner.
Now that I am in ownership I don’t have to work as hard to make a dollar because I am in control of everything. I no longer take crappy paying PPO plans so I don’t do any $500 crowns or anything close to that like I used to. I also made 33% as an associate and keep a much larger percentage now. I don’t have to ask anyone to take a day off or worry about sharing my production with a new associate.
I don’t know why anyone that is really good would stay as a long term associate. If you are good enough to make 300k year after year as an associate you’ll probably make 500k as an owner.
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You could start up for a lot cheaper. 300k is nothing when compared to a dentist-owner.
Why own a practice?
1. Autonomy - Do what you want. It's your practice and you don't have to answer to anyone except your patients and the board.
2. Money - Make way more money than you ever did associating. You get to keep more of what your office produces.
3. Entrepreneurial opportunities - More room for growth (via other offices or other businesses)
That's all I can think of for now. There are more headaches in owning an office, but you're well compensated for it. Retire faster... I took a short vacation recently and it made me realize that although dentistry is fun, going on a vacation is even more fun. Too bad it had to end and I have to go back to work. Imagine if the rest of your life was like a permanent vacation, that's the dream.
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$$$$$$ - autonomy, answering to some old doc gets ****ed after a while.
IMO the better question is why wouldn't you want to own the means of production?
If you can afford to pay an associate well that means they're also paying you, the owner, well. Owning capital is key for building wealth. I prefer to not have to earn every cent that comes my way in life by being a W-2 employee.
If you can afford to pay an associate well that means they're also paying you, the owner, well. Owning capital is key for building wealth. I prefer to not have to earn every cent that comes my way in life by being a W-2 employee.
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I’ve been having the same thought lately. I have been working public health for 2.5yrs and it gives me good salary&benefits. I really enjoy having a set salary and knowing I will take home at least a certain amount. Sometimes private practice/DSO income seems too unpredictable.
I’ve been looking into possibly switching to corporate/private practice but the income seems like it can be unpredictable since it’s production/collections based. The all around benefit package with public health jobs offering $160K, loan forgiveness and benefits
is a sweet deal.
I’m trying to get rid of debt and having to take out more loans to open a business is scary.
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Money and control.
Also... don't believe "online offerings" without seeing actual production reports. They are naturally going to put something overly optimistic. Lots of deception in the market place and BS jobs ads, trust me. But once you are making good money as an associate, and understand the business model, and are confident... you will realize you are leaving a lot of loot on the table not being the owner. But ownership is def not for everyone.
If you are making $300k as an associate, you are working your arse off. Thats at least $1million dollars of dentistry being done, usually with this crappiest insurance plans. And you are not even getting anything from the hygiene dept. Do the math.
