I discussed this topic several years ago and have recently had an influx of associates contact me about their specific situation and if ownership is right for them. It’s probably a good time to revisit this topic.
Many associates have probably been super busy over the past two years due to considerable money flowing through the economy and the pandemic restricting travel. They may see their clinic’s having a considerable uplift in profits and this may skew their view of practice ownership.
However, the recent treasury budget forecasts tougher financial times to come. Patients will likely restrict spending on the more profitable extensive and elective dental treatments. Further, competition is abundant in metro areas. The good times will likely not last. There are also more HR regulations and red tape to deal with. Associates probably didn’t see the amount of stress owners faced during the pandemic with regulations changing constantly with little notice.
The question of ownership has probably never been more relevant to discuss then it is currently.
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 20 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. Several 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 not uncommon. 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.
Our next practice ownership seminar is coming up in Sydney on the 4th and 5th of March 2023. This seminar has sold out in previous years – please register ASAP to avoid missing out.
We also offer expert guidance in various areas of practice ownership. Please see the below link for more information.