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I am wondering where people are going to get enough money to start their office even though they have 150-300K of student loan.
Where does the money to establish an office come from?
- Thread starter Highschoolstud
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Personally, I wont be starting a practice fresh out of dental school. I'll work as an associate for a couple of years which will do 2 things for me:
1) Make money
2) Learn the ropes of managing a successful practice (from what I hear, the transition from school to the real world is not that easy)
1) Make money
2) Learn the ropes of managing a successful practice (from what I hear, the transition from school to the real world is not that easy)
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I lot of people may partner with another dentist who already has an established practice. In the contract can be a negotiated buy-in period and amount. This often occurs with a practice that has a near-retirement dentist.
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its easy to get a loan...well not easy but easier if you have a sound business plan when you walk into the bank
Show them a realistic proforma statement (5 years is good) and a sound marketing plan.
Sounds easy, doesn't it....guess again. It takes some good research and a soild background to develop the skills to pull this off.
Some fortunate souls like aphistis have a family member to help them out.
Others like myself have to educate ourselves. Hence if you are in undergrad and have a few electives to spare, take a Financial managemnt class, acct., etc
For those like myself that did not have this advise, go get an MBA. I did this before dental school bec I know once I get out there is no way I'm sticking my butt in another class room (besides CE)
Show them a realistic proforma statement (5 years is good) and a sound marketing plan.
Sounds easy, doesn't it....guess again. It takes some good research and a soild background to develop the skills to pull this off.
Some fortunate souls like aphistis have a family member to help them out.
Others like myself have to educate ourselves. Hence if you are in undergrad and have a few electives to spare, take a Financial managemnt class, acct., etc
For those like myself that did not have this advise, go get an MBA. I did this before dental school bec I know once I get out there is no way I'm sticking my butt in another class room (besides CE)
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Remember student loans are not like consumer loans. Dentists have very high success rates in setting up successful businesses and banks are more than ready to loan you the bucks.
But you face 2 main problems starting up a practice after graduating:
-establishing a patient pool
-Work productivity.
That's why working as an associate (with an option for partnership in the future) is so beneficial.
But you face 2 main problems starting up a practice after graduating:
-establishing a patient pool
-Work productivity.
That's why working as an associate (with an option for partnership in the future) is so beneficial.
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A new dental office is one of the few things that fail when one comes out of school. About 1% of all dentists go bankrupt in the first 5 years. Given this stat banks and lenders are more then willing to take the risk.....there is a 99% chance you'll be in business in 5 years and the money they gave you will be comign back with interest on top. Worry abotu getting through school....there is more then enough practices to buy out there and it's seems as if alot of people start up their own after leaving school, leaving even more dentists who want to dump their practice up the river without a paddle. You can get money....just keep your credit clean and keep focused.
T 2006
T 2006
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"....banks are more than ready to loan you the bucks. "
This is not really true. The old saying goes banks only loan money to people who don't need to borrow it.
If you were new out of school and starting a scratch practice you would have a difficult time obtaining funding through a traditional bank unless you fit the criteria above or have someone who does co-sign the loan with you. It would be SLIGHTLY easier if you were buying an existing well established practice, but a bank can't repo your practice and sell it to just anybody else. Most states have laws against non-dentists owning a practice so they are very restricted in getting their money back if you fail.
There are several financing companies that will lend you money for your scratch practice but you will get a much higher interest rate and unfavorable repayment terms . But if you really want to do it, it can be done.
I'd also like to see some proof about the 1% of new practices going bankrupt in the first 5 years. That seems very low. I'll bet one or two of your professors are there b/c of chapter 11 out in the real world. This kind of stuff just isn't talked about in polite dental circles, much to the detriment of new dentists.
Rob
This is not really true. The old saying goes banks only loan money to people who don't need to borrow it.
If you were new out of school and starting a scratch practice you would have a difficult time obtaining funding through a traditional bank unless you fit the criteria above or have someone who does co-sign the loan with you. It would be SLIGHTLY easier if you were buying an existing well established practice, but a bank can't repo your practice and sell it to just anybody else. Most states have laws against non-dentists owning a practice so they are very restricted in getting their money back if you fail.
There are several financing companies that will lend you money for your scratch practice but you will get a much higher interest rate and unfavorable repayment terms . But if you really want to do it, it can be done.
I'd also like to see some proof about the 1% of new practices going bankrupt in the first 5 years. That seems very low. I'll bet one or two of your professors are there b/c of chapter 11 out in the real world. This kind of stuff just isn't talked about in polite dental circles, much to the detriment of new dentists.
Rob
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I read in one of the gov't data sheets its about 5% failure rate for new dental startups
Anyhow, it was the number 1 most successful new business startup.
I will try to recall where this data is
I bet the majority of that 5% were the gunners that came out of school thinking they knew it all...don't let cockyness get the best of you.
Anyhow, it was the number 1 most successful new business startup.
I will try to recall where this data is
I bet the majority of that 5% were the gunners that came out of school thinking they knew it all...don't let cockyness get the best of you.
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That's such a gratifying thought
Too bad there's no way to validate it.
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thats from the fact-sheet on ADA webpage.
It is also on ADA (or ADEA's) webpage that 1/3 of the practicing dentists will retire within the next 10 years and we will be faced with a shortage of dentists while the population will continue to rise. Even as of now, i see a shortage,... a lot of dental schools are looking for faculties to teach and when you call your dentist, the earliest appointment they can give you is 2 months away. I could worry less about patinet pool. No wonder there is such a success rate for dental offices and banks are more than willing to lend you $$$$$$. lets just worry about getting in and out of the dental school.
Comet
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This is a good subject to talk about. Most dental students and pre-dents never think about what they are going to do immediately after school (including myself). Alot of people think they will graduate and someone will pay you $100,000 a year. If you have significant loans someone is going to pimp you until you can get your own practice. The pimp may be a dentist, the goverment, or the bank. Coming out of school: 1.)You will probably make between $30,000-60,000 as an associate working for someone else(unless you are working for your dad). 2.)Your skills and your knowledge will be sub-par.
I have done some research and here is what you can expect to pay going to separate routes post dental school.
1.)New Start-up Solo practioner directly out of school:
Avg dental school loans: $125,000
Small house, and vehicle replacement: $100,000
Office space, equipment, advertisement. $250-300,000
Additional loan to cover expenses $50,000
*No patient base.
~$25-30,000/yr net income
*$500-600,000 initial debt
2.)Buy-in solo practioner directly out of school:
Avg dental school loans: $125,000
Small house, and vehicle replacement: $100,000
Purchase a practice: $250-400,000
Additional loan to cover expenses: $50,000
~lets hope the patient base stays with you, hopefully the previous doctor will stay around for transition, not always so.
~$40-60,000/ yr net income
*$600-700,000 initial debt
3.)Associateship
Avg dental school loans: $125,000
Small house, and vehicle replacement: $100,000
Office purchase: $0
*200-250,000 initial debt
~$30-60,000 yr income
I know everyone has a story of a dentist making $500,000 a year, but these cases are rare, and in the right situations. The dentist has superior financial, and patient management skills, along with clinical experience. Most dentist don't reach there Clinical, and financial peak until they are 10-15 years out of school. If you have kids, you may be postponing that financial peak for an additional 5-10 years. It's not all rosy out there folks. I hope this helps.
I have done some research and here is what you can expect to pay going to separate routes post dental school.
1.)New Start-up Solo practioner directly out of school:
Avg dental school loans: $125,000
Small house, and vehicle replacement: $100,000
Office space, equipment, advertisement. $250-300,000
Additional loan to cover expenses $50,000
*No patient base.
~$25-30,000/yr net income
*$500-600,000 initial debt
2.)Buy-in solo practioner directly out of school:
Avg dental school loans: $125,000
Small house, and vehicle replacement: $100,000
Purchase a practice: $250-400,000
Additional loan to cover expenses: $50,000
~lets hope the patient base stays with you, hopefully the previous doctor will stay around for transition, not always so.
~$40-60,000/ yr net income
*$600-700,000 initial debt
3.)Associateship
Avg dental school loans: $125,000
Small house, and vehicle replacement: $100,000
Office purchase: $0
*200-250,000 initial debt
~$30-60,000 yr income
I know everyone has a story of a dentist making $500,000 a year, but these cases are rare, and in the right situations. The dentist has superior financial, and patient management skills, along with clinical experience. Most dentist don't reach there Clinical, and financial peak until they are 10-15 years out of school. If you have kids, you may be postponing that financial peak for an additional 5-10 years. It's not all rosy out there folks. I hope this helps.
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33767
30-60k sounds a little low even for new grads. I have a friend who graduated last year from TX school. He started out making 85 at Monarch Dental. Also, most dental jobs I see on Monster or healthcare job sites are closer to 90k. Some say $700 a day. I know all aren't like that, I am just curious where you got your numbers. If you have already graduated and are in the real world then I would certainly lend a lot of credibility to what you have to say about the numbers.
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$30K/yr is indeed WAY too low where I am, even for a new dental school graduate going into an associateship.
What one needs to do is to negotiate the terms an associateship contract. At least 30% production, and have the lab costs deducted from the patient's fee (rather than you having to pay for it out of your own collection). $80K/yr easily if one works 5 days/week at a practice that is reasonably busy.
ALWAYS have a trial period (at least two weeks) before agreeing to take on an associateship, to make sure the practice is reasonably busy and has patients willing to pay for procedures that command good fees-- For instance, you don't want to work in a practice where the owner keeps all the fixed prostho work for himself and relegates you to doing just the recalls.
$30K is for those who decide to do a GPR/AEGD residency first... That's how much the stipend usually is.
Bottom line is, always read the terms of the associateship contract carefully-- That way you will never be suckered into a job that pays only $30K/yr. The practice management instructor at my school is fond of saying: ALWAYS read the fine print before you sign on the dotted line! 😀
What one needs to do is to negotiate the terms an associateship contract. At least 30% production, and have the lab costs deducted from the patient's fee (rather than you having to pay for it out of your own collection). $80K/yr easily if one works 5 days/week at a practice that is reasonably busy.
ALWAYS have a trial period (at least two weeks) before agreeing to take on an associateship, to make sure the practice is reasonably busy and has patients willing to pay for procedures that command good fees-- For instance, you don't want to work in a practice where the owner keeps all the fixed prostho work for himself and relegates you to doing just the recalls.
$30K is for those who decide to do a GPR/AEGD residency first... That's how much the stipend usually is.
Bottom line is, always read the terms of the associateship contract carefully-- That way you will never be suckered into a job that pays only $30K/yr. The practice management instructor at my school is fond of saying: ALWAYS read the fine print before you sign on the dotted line! 😀
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you go ahead and work for 30k bec no one else will.
Put it this way, if you are making less than 70k, you've been stiffed or suckered into a really bad job.
My cuz got his associateship with 35% of production...he made 110k his first year and this is not uncommon
Show me where you get this 30-60k from and I will believe it.
Go to www.dentaltown.com and see how much they pay new grads
Put it this way, if you are making less than 70k, you've been stiffed or suckered into a really bad job.
My cuz got his associateship with 35% of production...he made 110k his first year and this is not uncommon
Show me where you get this 30-60k from and I will believe it.
Go to www.dentaltown.com and see how much they pay new grads
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All of you are assuming that as an associate you are getting the best patients that walk in the door. The reason that dentist hire associates is to make money off them. Many of them are a part of manage care programs, and if you end up working for one of these guys then $30,000 is possible. You have to read the contract. Many of those advertisements that you read are highs (has potential to make $130,000). Of course all of this depends on when you live. Some of you in the northeast can expand more. Always go with the average of what they quote.
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Broc,
It's hard to find dentist that will pay you off production.
It's hard to find dentist that will pay you off production.
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to Firm:
That's why trial periods are important-- If the place turns out to be a managed-care nightmare or the owner is obviously using you to do just scut work while he keeps all the lucrative stuff to himself, get the hell outta there! (i.e. ALWAYS make sure you got adequate escape clauses in a contract!)
Of course the new graduate cannot expect the owner of a practice to give you all his best patients, but you must demand to have at least a reasonable share.
It's not uncommon to go through five or six 2-week trial associateships before you find a place you like to work in.
And yes, the Northeast rocks. 😀 It's not hard to find associateships here in the NE that pays a percentage of your production.
That's why trial periods are important-- If the place turns out to be a managed-care nightmare or the owner is obviously using you to do just scut work while he keeps all the lucrative stuff to himself, get the hell outta there! (i.e. ALWAYS make sure you got adequate escape clauses in a contract!)
Of course the new graduate cannot expect the owner of a practice to give you all his best patients, but you must demand to have at least a reasonable share.
It's not uncommon to go through five or six 2-week trial associateships before you find a place you like to work in.
And yes, the Northeast rocks. 😀 It's not hard to find associateships here in the NE that pays a percentage of your production.
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Lots of percentage of production in FL too!!!
You must be looking in the wrong place Firm
Go to that dental town website and see how they pay their associates. Some do a min of $400 a day or percentage, which ever is higher
Go to that website and ask dentist that are practicing, maybe that will change/convince you.
You must be looking in the wrong place Firm
Go to that dental town website and see how they pay their associates. Some do a min of $400 a day or percentage, which ever is higher
Go to that website and ask dentist that are practicing, maybe that will change/convince you.
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this thread is really incredible.
i thought we were jumping way ahead of ourselves when we started talking about what specialty to get into.
i suggest you guys finish high school (the OP), then finish college, then try to see if you get into dental school, then maybe worry about specialties and practices.
good luck!
i thought we were jumping way ahead of ourselves when we started talking about what specialty to get into.
i suggest you guys finish high school (the OP), then finish college, then try to see if you get into dental school, then maybe worry about specialties and practices.
good luck!
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My info is from practicing dentists in the midwest and south, not from some website. I have an uncle who owns 7 practices in michigan, a friend who owns 4 in Tennessee, a friend who owns 2 in georgia, and friends in associateships in the midwest and south. $300 a day is normal for these areas, and many earn only on collections.
Another factor affecting your net income that I forgot to mention is malpracitce/disability insurance.
Alot of people think that you're going to make $200-400,000 as a general dentist. A couple of prosthodontist and I figured that the average general dentist not performing any specialized services (ie: braces, Full mouth reconstruction, implants), and treating patients ethically should have a max income between ~150-180,000. I emphasize the word "ethically". We see patients all the time where dentists are placing substandard restorations or not observing the perio before placing $2-3000 bridges on Case type IV perio. If a general dentist is saying that he nets $500,000/yr and he charges average fees, red flags should go up. This of course doesn't apply to UBTOM because you live in THE city. I know there will be some disagreements so lets hear them.
Another factor affecting your net income that I forgot to mention is malpracitce/disability insurance.
Alot of people think that you're going to make $200-400,000 as a general dentist. A couple of prosthodontist and I figured that the average general dentist not performing any specialized services (ie: braces, Full mouth reconstruction, implants), and treating patients ethically should have a max income between ~150-180,000. I emphasize the word "ethically". We see patients all the time where dentists are placing substandard restorations or not observing the perio before placing $2-3000 bridges on Case type IV perio. If a general dentist is saying that he nets $500,000/yr and he charges average fees, red flags should go up. This of course doesn't apply to UBTOM because you live in THE city. I know there will be some disagreements so lets hear them.
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I think your outlook on dentistry sounds as extreme as Lance's (the attorney) outlook on the law field.
Furthermore, I dont beleive your views apply to metropolitan areas. Also, I dont know enough about the midwest and south to discount what you are saying.
Maybe 60k in those areas will accomodate the same lifestyle as 100k in metro areas?
Furthermore, I dont beleive your views apply to metropolitan areas. Also, I dont know enough about the midwest and south to discount what you are saying.
Maybe 60k in those areas will accomodate the same lifestyle as 100k in metro areas?
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max is 150k yet the avg income for a GP dentist is 150k...interesting
Tomorrow when I land in Ft. Lauderdale my gf cut out a article in the paper with avg incomes and that will settle this for sure. I will scan it and post it up here as a jpeg when I get back on dec 1st
Not as an insult, but it seems like those you know need better business skills and i don't mean ripping people off.
I want proof and numbers not word of mouth. You are new and don't know me yet, but I back everything I say with data not opinion. I stay on here to help people and not to deceive them.
I will ask my associate buddies for their pay stubs and see if I can scan them and post them
Tomorrow when I land in Ft. Lauderdale my gf cut out a article in the paper with avg incomes and that will settle this for sure. I will scan it and post it up here as a jpeg when I get back on dec 1st
Not as an insult, but it seems like those you know need better business skills and i don't mean ripping people off.
I want proof and numbers not word of mouth. You are new and don't know me yet, but I back everything I say with data not opinion. I stay on here to help people and not to deceive them.
I will ask my associate buddies for their pay stubs and see if I can scan them and post them
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to Firm:
The range from $150K-$180K does sound about right for an established GP, yep..
Personally I think one should avoid trying to get an associateship as "just a job." If the owner-dentist knows from the outset you are only going to work for him for a little bit then go somewhere else, he really has no incentive to treat you right.
A better way I think is to approach an associateship with the stated intent that you would like to buy in someday. That way, the owner has an incentive to increase the valuation of his practice and give you a more fair share of the high-value work, because part of his retirement is riding on how well you do (i.e. some day in the future you may give him upwards of $200K for his practice-- A VERY nice retirement nest egg).
This is not to say that your associateship should ALWAYS lead to ownership, of course... That's what escape clauses are for in a contract, in case the situation turns sour in the future and you need to move on to bigger and better things. 😀
The range from $150K-$180K does sound about right for an established GP, yep..
Personally I think one should avoid trying to get an associateship as "just a job." If the owner-dentist knows from the outset you are only going to work for him for a little bit then go somewhere else, he really has no incentive to treat you right.
A better way I think is to approach an associateship with the stated intent that you would like to buy in someday. That way, the owner has an incentive to increase the valuation of his practice and give you a more fair share of the high-value work, because part of his retirement is riding on how well you do (i.e. some day in the future you may give him upwards of $200K for his practice-- A VERY nice retirement nest egg).
This is not to say that your associateship should ALWAYS lead to ownership, of course... That's what escape clauses are for in a contract, in case the situation turns sour in the future and you need to move on to bigger and better things. 😀
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My info is from the research that I have gathered, it may or may not be accurate for your area, and I don't expect you to believe everything that I say. You should look at a bunch of sources and take the average of what you hear. My point is that there are many factors to considered, and you are probably not going to make a ton of money right away. Griffin04 has a good thread. UBTOM, you made some good comments.
PS: All of my figures are for metro areas.
PS: All of my figures are for metro areas.
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Very correct I agree with you on that.
I do not plan to have a nice income and savings for about 10-15 years, but I will not be living in poverty like conditions. I will not be driving nice cars, but rather an S-10. I will not have a $300k home, but rather a 150k
I plan to use my dental income to invest in other areas and I plan to live on this resiudal income for years to come
I do not plan to have a nice income and savings for about 10-15 years, but I will not be living in poverty like conditions. I will not be driving nice cars, but rather an S-10. I will not have a $300k home, but rather a 150k
I plan to use my dental income to invest in other areas and I plan to live on this resiudal income for years to come
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