By Wes Read CPA, CFP
Jul 22 2020
It’s always stuck me as paradoxical that Dental Boards in many states only allow licensed dentists to own a dental practice. Yet, they haven’t promoted financial education within dental schools and give marginal CE credit for business courses. And yet, a dental practice is a business. And that business comes with operational and financial demands to sustain excellence for the patient, the doctor, and the staff.
I believe this problem is a residual effect of industries changing faster than governments. In the case of the dental industry, there was a time when the dentist-to-population ratio allowed virtually every practicing dentist to earn a decent living. That was true even if the dentist lacked proper financial education. In those days, insurance carriers weren’t so prevalent. And even if dentists were in network, the reimbursements rates were healthy. Additionally, the emergence of the Dental Corporation hadn’t occurred yet.
In other words, hang up shingle, and you’d like enjoy a good living.
Fast forward to 2020. Some large group practices are growing by hundreds of locations each year. More DSO are entering the space. Insurance companies continue to lower their reimbursement rates. Patient are more willing to pay top dollars for the latest technology while case acceptance rates are staggeringly low. Student loans are crushing and the dentist-to-population ratio has increased (not good) in many parts of the country. And some dentists are walking away from their practice after COVID dealt a death blow.
What does the new associate do?
Let’s think about that. Why does private equity money want into dentistry so bad? Because as a business model, it’s very profitable! Notice I said business model, not practice. The business people know if they can apply great business models to a dental practice, it can thrive. This explains why so many, if not most, of the growing DSO are NOT run by dentists, but by former investment bankers, private equity owners, and even dental CPAs.
But you don’t need to have a background in iBanking, or private equity, or as a CPA to thrive in your own practice. However!… your probabilities skyrocket when you operate your practice as a business model. And doing so means learning business management skills.
And that, my good associate, is why we created the Associates on Fire Program. We don’t claim to teach you everything you need to know to be a successful business owner, but we do teach you a lot. And if you understand the concepts we teach, you’ll (1) make better financial decisions throughout your career, (2) increase your financial security at an accelerate pace, and (3) likely enjoy a life supported by a healthier dental practice.
We’ve packaged our content through various mediums for you. These include education videos, podcasts, downloadable resources, blog posts, and a monthly free live Question and Answer webinar. We hope you find this content helpful in your career path as an early stage dentist. Thanks for letting us be a part of it.
Wes Read, CPA, CFP
Copyright © 2021 All Rights Reserved.