If you are committed to dentistry for the long run, practice ownership may have crossed your mind. This is true for whether you are a dentist or a non-dentist professional living in one of the states that allow non-dentists to own a practice. The idea of practice ownership is an exciting one. You have unlimited earning potential and will build an asset you can sell someday. As with almost everything, there are tradeoffs.
In The Business of Dentistry Facebook community, a dentist openly wondered whether dental practice ownership was worth it anymore, especially for dentists earning significant salaries working for other practices.
Here is how she framed her question:
I am 5 years out and I have the “golden handcuffs” . . . making $300k as an associate but busting my butt. I’ve always wanted practice ownership but unsure of the future. Are the golden days of solo practice over? Is ownership still worth it if it means leaving a highly paid, no-responsibility associateship?
The Business of Dentistry Facebook community engaged in a lively discussion to help this dentist. Of course, many members wondered where she was working to earn that high a salary as an associate after only five years, noting it must be a highly profitable practice.
Regarding the substance of her question, here are three variables the community suggested she consider.
Flexibility or Consistency
What’s more important to you, flexibility or consistency? If flexibility is important to you, owning a well-run dental practice will give you that more than a salaried associate position. You can set your own hours, guide the direction of the practice, and train team members to handle tasks you do not want to do.
If consistency is more important to you, staying in an associate position you enjoy might be the better choice. A practice that can afford to pay a high salary to associate dentists is likely to be sustainable. Thus, you may experience more consistency with regular paychecks as an associate. Practice owners may earn more over the course of a year, but it would be variable, ebbing and flowing as revenue and expenses fluctuate.
Dependency on Current Salary
This doctor came into the equation with a significant salary. If she needs that $300,000 per year salary to pay her bills, staying in her job is likely the best choice, at least for now. While well-run practices can make more than she is earning, it could take years to surpass her salary.
Purchasing an existing practice could help reduce some of that risk, but future income from a practice you purchase is not guaranteed. Someone earning a high salary will often be better off aggressively reducing personal expenses, increasing savings, or both, before leaping from an employee to practice owner.
Desired Responsibility Levels
Many practice owners responded saying how much they loved practice ownership but cautioned others about the level of responsibility required to own a practice.
One owner said he would go back to being an associate if he could make that level of income because of what he described as “all the outside-the-office headaches.” For example, he had been searching for a second front desk team member for three months.
Practice ownership is a big responsibility. If you work in the practice, you essentially wear three hats. You are a team member and need to perform your tasks well. You are a practice leader and need to manage operations well. And you are a business owner and need to tend to big-picture business issues.
Some people love all three of those things. For those people, practice ownership might be ideal. Others like some of those things and can outsource or delegate the things they do not enjoy doing. But some people cannot stand the idea of leading people, filling positions, and doing all the other things it takes to manage day-to-day operations or grow a business. Those people are likely better off staying as an associate.
Do you think dental practice ownership is worth it?
The theme from the community was that dental practice ownership is not always worth it. But when the right person approaches practice ownership well, it can be an incredible investment.
How would you advise this doctor? Let us know your experience below or join the conversation in The Business of Dentistry Facebook community.