Which specialty has the least overhead?

[robhmnt]

Hi there. First off, I'm so sad that I have found this website while being a D2, and guess what? I found it on Google, and never ever heard anyone in my class talking about SDN, and while I started telling my friends about the website, EVERY single one of them knew about it. Anyway, let's move on.
My question to all D2, D3, and D4s: What is the specialty with the least overhead in dentistry? I have heard different answers for this at school, but would like to know whether there is any consensus.

Thank you

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[drm85]

Just a predental student, but I will say Endo.

 

[aphistis]

Hi there. First off, I'm so sad that I have found this website while being a D2, and guess what? I found it on Google, and never ever heard anyone in my class talking about SDN, and while I started telling my friends about the website, EVERY single one of them knew about it. Anyway, let's move on.
My question to all D2, D3, and D4s: What is the specialty with the least overhead in dentistry? I have heard different answers for this at school, but would like to know whether there is any consensus.

Thank you

Public health.

But among the clinical specialties, my guess would also be endo.

 

[Guy Smiley]

Pathology - all you need is a microscope and some slides.

I also was thinking maybe endo although OMFS has a low overhead if all you do is shuck thirds after the initial investment in equipment especially if you consider overhead in terms of percentage of gross income rather than lowest dollar amount. Honestly though, if all you are concerned about is the lowest overhead, reconsider doing what you love.

 

[Daurang]

I would guess it's endo because endo is where my biggest profit is.

 

[aphistis]

Pathology - all you need is a microscope and some slides.

And transport/shipping for biohazardous specimens, and techs to prepare the specimens, and equipment to prepare them for slides, and microtomes to cut the slide samples, and dozens of different stains, and immunoassay reagents, and transcriptionists for dictations and, yes, the microscopes themselves.

I'm surely forgetting plenty of other significant expenses, too, but I'm pretty sure "a microscope and some slides" falls a little short of the mark.

 

[DrReo]

According to the aforementioned profitability survey, for 2004 overhead is as follows:

Endo: 43.8%
Oral Sx: 50.3%
Pedo: 52.9%
Perio: 57.4%
Ortho: 57.5%
General: 60.9%

As I said, I'm sure you can find offices well over (and well under) these figures but they are all in the ranges I've read.

The article is in depth numbers-wise for each specialty and GP with nice text breakdowns of each specialty, comparing past numbers, profitability, etc etc. One of these days I'll scan it.

I thought about posting the entire article earlier but feel like too many dents and pre-dents will read it and choose specialties based on the $$ (more than usual at least). Perhaps if some of the vets in here were interested I would email or PM the file.

Here is a snippet regarding OMFS since there are a bunch of you on here:
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"Oral surgery recorded another gain in practice profit percentages in 2004. Total ovehead expenses declined from 51.8% in 2003 to 50.3% in 2004, as a result of lower occupancy and nonoperating costs, for a drop of 1.5% points. Meanwhile, profit percentages increased from 48.2% in 2003 to 49.7% in 2003. Oral surgery continues to sport the secong highest profit percentage in dentistry, ranking it only behind endodontics.

Compared to five years ago, practice overhead expenses are up from 45.9% in 1999 to 50.3% currently, while profit percentages are down 4.4 percentage points from 54.1% in 1999 to 49.7% in 2004.

http://forums.studentdoctor.net/showthread.php?t=250339

 

[capisce?]

Last year our pedo office had an overhead of around 42%. It can be done with due diligence. This is really where you can up your salary. What sounds better to you...seeing more patients during the day and doing more procedures, or lowering overhead, keeping your patient flow the same and making more money. I'd prefer the latter. I'm astounded by established GPs (practice paid off) who gross 1 million with 74% overhead, and take home 260k. I'd much rather scale things down, produce 700k with a 60% overhead and bring home more money (280k) I think a lot of dental students and predental students get wowed by practice gross, but it's really irrelevant. Maybe my new slogan shall be "it's all about the overhead".

 

[DrReo]

Last year our pedo office had an overhead of around 42%. It can be done with due diligence. This is really where you can up your salary. What sounds better to you...seeing more patients during the day and doing more procedures, or lowering overhead, keeping your patient flow the same and making more money. I'd prefer the latter. I'm astounded by established GPs (practice paid off) who gross 1 million with 74% overhead, and take home 260k. I'd much rather scale things down, produce 700k with a 60% overhead and bring home more money (280k) I think a lot of dental students and predental students get wowed by practice gross, but it's really irrelevant. Maybe my new slogan shall be "it's all about the overhead".

What are some tactics to keep a low overhead?

 

[jdmdd]

Precisely why practice NET is a much more useful number to look at while looking at practice valuations than practice GROSS.

Ways to limit overhead:
1. consolidate staffing (can your front desk also do your books?)
2. supplies - do you need to use the most expensive disposables/composites/impression materials/etc...
3. negotiate a good rent (obviously this needs to be done from the begining).
4. dont go out and buy a cad/cam,conebeam,laser etc,etc at first...get by with what you NEED.
5. staff benifits (health,profit sharing)
6. Lab fees - David Kims lab in NY charges like 400/unit for veneers...do you have the type of practice where that is necessary, or can you get by with the local guys that charges 100/unit.
7. Useful marketing dollars - track it so you can see if you are getting a decent ROI.
8. Just like home - watch the thermostat
The list could go on and on.

 

[charlestweed]

What are some tactics to keep a low overhead?

Don't hire too many full time employees. Cross-train your staff so one person can do everything: taking xray, sterilizing, cleaning, billing, ordering etc. I'd rather hire one person and pay him/her well than hire too many low paid incompetent employees. My 2 girls can assist ortho and perio and do many other things….and they've stayed with me for a long time.

Don't buy expensive equipments such as CEREC, digital pano, Adec chairs etc. Do you know that you can rent a panoramic xray machine for $35/image?

Rent a small office space and install as many dental chairs in there as possible. You don't need to have a nice game room, a large lunchroom, a doctor office, multiple bathrooms.

 

[mustang99]

instead of renting, is it a good idea to just buy the office space? instead of just paying rent you could just mortgage it?

 

[jdmdd]

instead of renting, is it a good idea to just buy the office space? instead of just paying rent you could just mortgage it?

Sure...can be one of the better investments you can make in your career... IN the begining though, you will have a hard enough time getting financing to purchase a practice (start up or existing), let alone financing to purchase the real estate as well.

 

[charlestweed]

instead of renting, is it a good idea to just buy the office space? instead of just paying rent you could just mortgage it?

I prefer leasing an office space because I don't have to come up with a huge amount of down payment (most banks want 25% down….that's 250k if the building costs a million dollars) in the beginning. I also have the freedom to relocate my office or to close down the business (if my business is failing or if I want to quit) when the lease expires. The lease payment is 100% tax write off. I believe you can only write off on the interest if you buy building.

Most of my successful friends and colleagues want to buy their own building b/c they hate to deal with the greedy landlords. But for me, I really don't mind paying a small yearly increase in rent (usually 2-5%).

 

[diplo123]

So how much is the rent for a leased dental office on average?

 

[Daurang]

So how much is the rent for a leased dental office on average?

Is this a serious question? Are you talking about an office space in Candem, NJ or Times Square, NY?

 

[charlestweed]

So how much is the rent for a leased dental office on average?

Depends on the location. If it is a brand new center, at a busy interection, and has big stores (like Walmart and Home Depot) nearby, the rent is very expensive (ie 4+ dollars/square foot)….and you have to fight with other dentists to get such space. The landlord will accept the dentist that has the highest income (no chance for new grads). This is why big corporate dental offices (like SmileCare, Western Dental) are always located in good locations.

2 of my 3 offices are in medical/dental professional bldg…they are not very visible so the rents are not too bad. I pay a little bit more for the 3rd one, which is in a strip mall.

 

[NyCzPeter]

I actually thought ortho would have the least overhead. Call me ignorant but isn't it just wires and glue?

 

[Istr8nthem]

I actually thought ortho would have the least overhead. Call me ignorant but isn't it just wires and glue?

Unfortunately, ortho has a fairly high overhead... this is due in part to high cost of brackets (brackets range from $2-over $20 per bracket), wires (some new superelastic wires can cost >$5-10 per wire), lab made appliances, large staff (6 chair office needs 6 assistants, front desk staff, lab tech/sterilazation), and due to the number of patients seen in a day a large number of instruments. This is a quick list, and of course this in not all-inclusive. Throw in all the little things and it all adds up. Dentistry in general has a relatively high overhead, but overhead can always decrease with adequate planning, ordering, and overall management of the office.

 

[kato999]

The lease payment is 100% tax write off. I believe you can only write off on the interest if you buy building.
.

If you own the building you would lease the office space to yourself and then write 100% of that off. Of course you can't charge your self too much for the lease or uncle same will come knocking. Still, starting out leasing is almost always the way to go.