Most associates will ponder this thought at some point in their working careers. The Covid-19 Pandemic has perhaps bought this thought to the forefront for many associates who may be at a crossroads. Below is a reworking of an article I have written in the past.
Traditionally, practice ownership was a rite of passage for private practice dentists. They would work a few years honing their craft and practice ownership would be a natural progression. There was an abundance of patients and there was little need for any marketing. No thought was given to opening after 5pm or on weekends. There was no business need to upskill into specialist procedures and differentiate yourself from the competition. Appointment books would be full from day one. Most of these owners would be successful, not because of any great business acumen, but because of the extremely favourable dentist to population ratio.
However, times have certainly changed. The once favourable dentist to population ratio has now become extremely unfavourable. Competition is abundant, even in some once majorly under-serviced regional areas. There are also more HR regulations and red tape to deal with.
Today’s dental practice owner needs to be much more aware of the business of dentistry. In some circles, to mention dentistry and business in the same sentence is taboo. Yes, there is no doubt, as clinicians, our first duty is to serve our patients and do what’s in their best interest. However, like any profession we shouldn’t shy away from the fact that we should be compensated well to do this. Further, a dental practice owner is also a small business owner and a profit needs to be made in order to sustain that business. Serving our patients and turning over a profit are not mutually exclusive. In fact, one would argue that any practice owner who didn’t put their patient’s interests first would likely not be able to run a sustainable business.
So how do you know if dental practice ownership is right for you? At this point I will declare my inherent bias. I own and have owned over 15 dental practices and am very pro ownership. My own seminars are directed at associates wanting to get into ownership. However, I will attempt to provide a balanced view.
In my opinion perhaps the most important attribute of a successful dental practice owner is the ability to delegate. It may be surprising I didn’t mention having a broad range of clinical skills and excellent communication abilities as the most important. Although significant, these I believe are secondary to the importance of delegation. I have seen many examples of dentists, close friends included, with brilliant clinical skills and excellent ability to develop patient rapport who simply fail at being owners because of the inability to delegate. By delegation I don’t mean completely handing over your business to someone else but trusting that tasks you or someone else have trained staff to do, will be done without direct supervision from yourself. Generally, if your personality is one that may need to micro manage then dental practice ownership is probably not a good fit for you.
Secondly, dental practice ownership will bring stress and after hours’ time commitments. As your practice becomes more mature and you delegate more tasks these stresses and time required to manage problems will become much less. However, you still may get that call on a Saturday morning from the practice saying the compressor is blown and we have to move two full books worth of patients. Practice owners may also have to deal with a complaint from an unreasonable patient or fire an underperforming staff member. If you can’t deal with stress in a healthy fashion or simply don’t have the time, then dental practice ownership is not for you.
Thirdly, if you’re a high billing associate working in a busy practice with clinical autonomy then practice ownership may not be for you. A few years ago I had an attendee from one of my ownership seminars thank me after the course and he stated because of my course he realised practice ownership was not for him. You see, this particular associate was billing approximately $1,000,000 per year at his job and after labs, his commission was approximately $350,000. When this dentist said what he said and gave me his reason, it was perhaps the happiest I have been at any one of my seminars. He understood exactly what I had been teaching in regards to numbers. He understood that ownership was not something to be glorified. Yes, ownership is more than just money, but ultimately, you are entering into a business and the finances have to make sense. For him, they didn’t. He doesn’t have the ego to want to be an owner. He doesn’t have to be captain of the ship and have the stresses that come with being captain. Especially because he is already earning more than many owners earn after they take their commission and any profits that are left from their business. Why would he bother with the risk of ownership when he could have a great lifestyle with no headaches once he leaves work and continue doing what he was doing, with full autonomy and excellent earnings?
It’s not all doom and gloom for dental practice owners. If you desire financial freedom and ability to earn significant income beyond your wage as a dentist, then ownership may be for you. Indeed, well run and busy clinics have the ability to generate considerable profits, more than most other small businesses and investment classes. Anywhere between 15% to 35% profit on turnover is achievable. Further, you’re also building an asset that has value which will increase as the clinic grows.
The financial rewards can be great but there is also something to be said of building up your own business and creating a practice that you’re proud off. Whether it’s building an excellent working environment for staff or providing an important service to the community. The intangible aspects of practice ownership should not be undervalued.
If you desire complete job autonomy and can’t achieve that as an associate than practice ownership may be for you. Many dentists are disillusioned and have a lack of control in their current associate position. For example, they may not be able to order certain materials or they feel clinically impeded or they may want the dental assistants trained in a certain way. If you desire this, then Practice ownership may be for you.
I have attempted to provide a balanced insight into many aspects of dental practice ownership. However, ultimately it is a personal decision and my overall advice is to do as much research as possible before committing to dental practice ownership.
We cover this and much more at our practice ownership seminars. Our next practice ownership seminar is coming up in Sydney on the 27th and 28th of February 2021. These seminars have sold out in previous years so please register ASAP. Early bird rego ends Dec 31st!
https://practiceownership.com.au/seminars/
We also offer expert guidance in various areas of practice ownership. Please see the below link for more information.
https://www.practiceownership.com.au/expert-guidance/