After working as an associate for a couple of years, you’ll start thinking seriously about whether to become an independent practice owner or remain an employee for your career. This is a personal decision and there really isn’t a right or wrong answer, unless you make the decision based on bad information. I’ve heard dental students and recent grads share a few misconceptions over the years about what it’s like for those who choose to become business owners. I’d like to set the record straight here. Here are the three biggest myths about owning a practice.
- You won’t have a social life
Do you know what the work/life balance is for a business owner? Whatever the heck you want it to be! There is this crazy idea that an owner drowns in paperwork and has to give up their family time to keep the business open. Absolutely not true. I look at a couple of reports on a daily, monthly, quarterly and annual basis. I pay some bills every month. I take some time to strategize and implement new systems. None of this is done at the expense of my personal life. I have never had to miss a fun event because I was busy managing the practice. I don’t have to ask anyone’s permission if I want to take off or leave early. Being a business owner is the ultimate freedom as a dentist.
- You can’t get a practice loan because of your student debt
There are two types of debt: good debt and bad debt. Your student loans are good debt because you wouldn’t be able to practice dentistry without them. Sure, they might be a very large and scary number, but they won’t prevent you from getting a loan to purchase or start a practice. There are dental-specific lenders that understand the average default rate on a dental practice loan is less than 1%. You are low risk for a bank and they will be happy to fund your dream practice following certain parameters. One of those parameters is that you should avoid bad debt. Bad debt would be a $700 per month payment for a fancy car, massive credit card bills and other unnecessary expenses. Enjoy your first paychecks as a dentist but don’t dig yourself further into debt.
- The business world is too complicated
Balance sheets, cost/benefit analysis, PPO adjustments… there are a lot of concepts that are foreign to those of us who majored in biology. But don’t be intimidated entering the business world for the first time; you are not alone! There are countless resources available that will help you start speaking the language of business. And whenever you’re not interested in building your expertise on a particular subject there is a professional available for hire. Accountants, attorneys and consultants are ready and willing to join your team and help your business thrive.
Sure, being an owner isn’t for everyone. I did the normal routine of working as an associate for a few years and I thought I’d never be ready to take the reins of my own practice. But that feeling is normal. Eventually the entrepreneurial spirit will be sparked inside most of you; others will choose to continue to work for someone else. Whichever group you choose to belong to, the owners or the employees, please make that decision based on facts, not myths.
~ Dr. Chris Salierno, Stony Brook ’05, general dentist in Long Island, N.Y.
Title may sound normal but very good read with insights. True that it doesn’t sound easy. Even you overcome debt, the competitive business practices would treat you badly. But hardwork never fails, passion too. Thanks
you are waaaayyyyyy over simplifing the situation Chris.
1. being a biz owner (or at least a responsible one) does mean you live, breathe, and think about your business 24/7. by owning the business you instantly have two jobs, that of a dentist, and that of a business owner. you have to handle both roles, often at the same time. you might eventually be able to get a good work/life balance, but for the first few years when you get started i highly doubt it.
2. getting a practice loan IS dependent on your existing debt, at least your terms will be. banks are happy to lend to dentists because traditionally dental offices don’t go bankrupt easily, but nowadays with so many offices around and with so many recent grads with stunning loan numbers, you bet the availability of loans are under more scrutiny. and we haven’t even begun talking about the psychological and economic impact of another huge loan on top of the already crushing student loans.
3. the business world IS complicated. most people are NOT good with business. in the past dentists have largely been successful because it is a high-margin business, not as many grads, no corp infiltration, lower insurance encroachment, etc. the environement has now changed drastically. you have to know many things, deal with patients as customers, buy equipment/supplies, deal with employees, etc. you’d be kidding to say that it is not complicated, because it is. and most dentists i know are really poor businessmen because they lack the brains for it.