AMA - Practice startups and early retirement

[dr.d00m]

Thanks for giving all us mortals something to strive for. You might be in the top few percentage of dentists, but it's good to know that it's still a possibility to be that successful in the field

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[Grinz]

I work 5 days a week (35 hours)... Wed-Sunday (I don't know where people get the assumption that if I don't work Monday or Tuesday, I must be working only Wed-Fri). 60 hygiene patients is the max capacity, We dont hit max capacity every day, that would be crazy. Combined, I see an average of 45-60 patients a day in hygiene and ops; most we've ever seen is 76 I think in a day for hyg/ops. I can book all 60 hygiene, not all of them will show up. Your assumption is that all those active patients all come at their 6 month intervals; if only my patients were all that compliant, I could close my office to new patients. My active patient figure comes from my patient management system (Lighthouse).

It's not really that hard to reach the figures that we have up there if you throw ops in there. Example: Insurances pay 1200-1600 for RCT,b/u/crown, private is around 2400; that one patient alone has a value of 1200-2400. Extractions are 305 private, 110-171 for insurance. (These are single tooth figures) When you have 3-4 columns of these, they add up quickly. Not just that, walk-ins, same day conversions, etc...

Again, you don't have to believe me. I'm not going to bust out my 1040's, the financial data comes from my PMS/quickbooks. I'm here to let you guys know that solo practice isn't dead, hysteria around corporate dentistry is unfounded, and there is hope for the solo practitioner. I don't care so much as guarding this as trade secret, since I will hopefully be retired by then.

Hygiene plays a role in my office, but the majority of production comes from ops.

Fair enough. There's no doubt in my mind solo practice isn't dead. Thanks for doing this AMA - if you're numbers are true then that's amazing and congratulations. You deserve every bit of recognition for that. Going forward, what would you estimate that your production per hour is? What about your hygiene production per hour?

 

[TanMan]

Production depends on the patient distribution of the day. I tend to aggregate both hygiene and ops production into one; on a good day, I would say 2-2.2k/hour, slower days at 1.2k/hour. Average day is about 1.6k/hour. How do I get these averages? total production avg on a full day/ # hours worked. Sometimes ops saves the day, sometimes hygiene saves the day. When both collide, I'm kinda screwed, lol.

 

[TheSandlapper]

Thanks for sharing this, do you have any opinion of the HPSP program through the military? Clearly you're doing much better out the gate than military dentists, but you're also doing better than most who don't utilize the military either.

My plan is to go military, graduate debt free, and have enough money put aside to buy or start up a solo practice of my own by the time my obligations are up. Does this sound like a solid plan based on your real world experiences?

 

[CanaDMD]

Production depends on the patient distribution of the day. I tend to aggregate both hygiene and ops production into one; on a good day, I would say 2-2.2k/hour, slower days at 1.2k/hour. Average day is about 1.6k/hour. How do I get these averages? total production avg on a full day/ # hours worked. Sometimes ops saves the day, sometimes hygiene saves the day. When both collide, I'm kinda screwed, lol.

I honestly want to ask you this ; do you think your success is REPRODUCIBLE?

 

[TanMan]

Thanks for sharing this, do you have any opinion of the HPSP program through the military? Clearly you're doing much better out the gate than military dentists, but you're also doing better than most who don't utilize the military either.

My plan is to go military, graduate debt free, and have enough money put aside to buy or start up a solo practice of my own by the time my obligations are up. Does this sound like a solid plan based on your real world experiences?

I don't know anything about the HPSP program, but I'd look at it from the following variables:
1. How much will they cover of your education (indirect monetary benefit)? Do you have to pay taxes on that covered benefit?
2. How many years will you have to serve?
3. Are there any additional financial incentives besides covered education?

Total anticipated benefits / # of years = yearly added bonus on top of your base pay
Does base pay + yearly bonus + anticipated retirement benefits if you can claim them amortized > private sector pay? I think you should sample private sector pay as a new graduate, peak, and years in decline. Would going to the military allow you to get to the peak pay of your life faster than if you were to go into the private sector? If answer is yes, then military may be a consideration. I ask because the new grad rate vs peak rate is VERY different.
I look at it from a pure financial perspective. I don't know all the benefits the military will give you; I look at it from a maximizing profit potential throughout your lifetime. I wouldn't do it from a financial perspective, only if I wanted to serve my country in that capacity.

Now, I do have a colleague who was in the military in 5 years. He landed a corporate job afterwards. I'll ask him and PM you what he says.

 

[TanMan]

I honestly want to ask you this ; do you think your success is REPRODUCIBLE?

Yes, but you have to be willing to take risks.

Edit: and work hard. I think as dentists, we can sometimes be spoiled in terms of work. You know you've worked hard if you can barely move your forearm without feeling some pain, you got a headache, you didn't have lunch (or got used to it), and you're physically drained but still mentally energized

 

[ysrebob]

I have no doubt that TanMan has done exactly as he says. High production practices have less %overhead and there is lots of profit in "bread and butter" nonspecialty dentistry when done in that kind of volume.

I met a guy once who plays Major League baseball and no doubt he is raling in cash and will be able to retire in five years too. Good to dream about; not good to plan on.

For a typical dentist, the likelihood of replicating TanMan's results are in the same "ballpark" as getting into the Majors.

Leaving aside the challenge of scratch starting a multimillion$ office -- at the most fundamental level, very very very few talented and experienced dentists are even capable of personally producing $2M+/yr of fillings and crowns at the level of "clinically acceptable" or better (working across multiple rooms while also checking 3 hygienists).

TanMan, what is your scheduled Dr time for molar RCT/core/crown?

As a student: good to dream about; not good to plan on.

 

[Grinz]

TanMan, let's dive into the numbers and details of the startup a little more.
1. You mentioned you paid for your startup in cash, how much did you spend? I think instead of a bulk number, it would be helpful if you broke it down by what you spent for specific categories (i.e. rent, construction, chairs, instruments, software, etc.). Also how did you get your equipment and who helped you purchase it, if anyone? Do you own the building? etc.
2. Is your office single standing or is it in a professional complex? How far to the nearest office similar to yours?
2. How did you market your office? What were you doing? Social media marketing, newspaper, magazines, postcards, etc?
3. Besides the PPO/FFS aspect, what differentiates your practice that prevents another dentist to come into your territory and steal a large portion of your patient base? Is it price and insurance mix alone, quality of work, or is there something else?

 

[TanMan]

TanMan, let's dive into the numbers and details of the startup a little more.
1. You mentioned you paid for your startup in cash, how much did you spend? I think instead of a bulk number, it would be helpful if you broke it down by what you spent for specific categories (i.e. rent, construction, chairs, instruments, software, etc.). Also how did you get your equipment and who helped you purchase it, if anyone? Do you own the building? etc.
2. Is your office single standing or is it in a professional complex? How far to the nearest office similar to yours?
2. How did you market your office? What were you doing? Social media marketing, newspaper, magazines, postcards, etc?
3. Besides the PPO/FFS aspect, what differentiates your practice that prevents another dentist to come into your territory and steal a large portion of your patient base? Is it price and insurance mix alone, quality of work, or is there something else?

1. I paid no rent until the construction was complete. Rent is 3750/month initially for 3000 sq ft. (we eventually expanded to 4500) I am going to estimate the costs since I don't have exact figures of each one (Total was about 100k+, but there were add-ons along the way after completion of construction). Chairs and delivery systems were 5k each *5 = 25k. Software: Open Dental (99/mo), XrayVision (about 3.5k for licenses). Computers: New Server was about 1.1k (Timed it with compounding Dell Coupons at the time), each computer was refurbished at 149 ea - newegg dell optiplex 870's, core2duo; monitors are 99 each (new). Switches/Firewall: I think 500. I did my own drops initially - during the framing stage, it was easier. Did not use any dental contractors. I think all cabinets were only 5k custom made (but poorly made). Total for construction was about 60k. I used supercheap laminate flooring at 99cents/sq ft or less... Home Depot counter tops (those 12' ones). Couches were bought at an outlet sale.
Dental equipment: Bought a used vacuum off ebay, used Nomad Xray (made every room into an xray room), Industrial compressor at 1k with a drying unit (400), refurbished digital pano (either 12-15k, not sure), used Gendex sensors (bargains at 1k each, if you time it right), used electric handpieces (NSK) from graduating dental students, ... you get the drift. I didn't use dental companies. The only thing I financed 1 month after FT practice was a CEREC. When I had more money, then I upgraded on all the stuff that started falling apart a few months in, but the most important part is to have the bare essentials to start practicing dentistry.
2. Strip mall. 3/4 mile away, another office to the east of mine. Corporate chain.
3. Tried flyers, EDDM, newspaper. Printed media is totally useless. That's where I went TV, radio, SEO, and adwords. I avoid social media like the plague. Those that build their offices based on social media and reviews can have their success turn around quite easily due to social media volatility. I am actually against reviews since patients who check reviews are usually picky and/or cheap.
4. Time, marketing, brand equity, availability of appointments. People either love us or hate us. We're a no-nonsense, convenient office.
If you're busy and can't come in during bank hours, you come to us. If you want someone to talk to you for an hour, I'm not that guy. I had a patient once demand an hour of my time... my staff got them off quickly, hahaha. I see it as practice darwinism, those that don't like you never come back, but those are the ones that you don't want anyway. What does it take to take me down? Spend more than me on advertising, then be able to provide for the volume that you'll get, otherwise you'll drive them back to me.
I think our retention rate is good (For the patients we want to keep) since I'm not pushy, I don't nickel and dime you. I just tell you what you need, what your options are, and telling them my reasons for my recommendations. If they want it, great, if they don't, come back when you're ready. Also, we guarantee all our work for 3 years. If anything fails, I fix it, free of charge. If it leads to the whole tooth failing (i.e VRF on endo treated tooth), I refund your money back. I stand by my work, and patients appreciate that. Other thing is I am flexible, and we don't turn away a paying patient.

TL;DR
- Start cheap, don't let people steer you to buying expensive things initially. All you need is to practice, and LOOK good (doesn't have to be durable)
- Advertise, advertise, advertise..
- Treat patients you want with the utmost respect and don't be pushy. You're a doctor, not a salesman.
- Additional advice: Take care of your staff. Don't be greedy. Share your profits. You take care of them, they'll take care of you. I think this is something that many doctors take for granted. I haven't had turnover in 2 years.

To answer the question before this: I block off 1.5-3 hours in a column for RCT,b/u,crown, depending on how many other columns are packed. Blocking off doesn't really do much, since we accept walk-in rct's and ext's.

 

[DreamChaser01]

TanMan, are you on DT by any chance? If so, can you PM me your user name? I'll love to follow you on DT.

 

[TanMan]

I have no doubt that TanMan has done exactly as he says. High production practices have less %overhead and there is lots of profit in "bread and butter" nonspecialty dentistry when done in that kind of volume.

I met a guy once who plays Major League baseball and no doubt he is raling in cash and will be able to retire in five years too. Good to dream about; not good to plan on.

For a typical dentist, the likelihood of replicating TanMan's results are in the same "ballpark" as getting into the Majors.

Leaving aside the challenge of scratch starting a multimillion$ office -- at the most fundamental level, very very very few talented and experienced dentists are even capable of personally producing $2M+/yr of fillings and crowns at the level of "clinically acceptable" or better (working across multiple rooms while also checking 3 hygienists).

TanMan, what is your scheduled Dr time for molar RCT/core/crown?

As a student: good to dream about; not good to plan on.

I would disagree a bit with the last statement. Good to dream about, good to plan towards the endgoal of owning your own office. Sometimes when life gets hectic, we lose sight of the big picture. Please don't plan being an associate for the rest of your life unless that's what you really want. I see too many classmates stuck in that trap of mediocrity. I'm very pro-startup for all dentists opening up since I think that's the only way to get out of our perceived poverty trap. I'm a bit against these "practice gurus" since they all seem to sell the same formula of success (one of them tried to sell me their services, etc..., then backed out saying they can't help me). This tells me that a lot of them are cookie cutter formulas for success, rather than adapting to their market conditions.

 

[TanMan]

Great advice. If you were to start over, instead of paying rent, would you advise someone to buy a small office space or even break ground and build your own office? Or does the foot traffic from the strip mall plus TV/radio advertising make up for the office rent you pay (e.g. producing $2k/hr so $3750 monthly rent is essentally negligible)? I know that in LA, rent makes up a huge part of overhead, as it costs $20,000+/month to lease office space and that's less than 3000 sq ft.

No, you have better things to do with your capital than buy a building/land and break ground. Commercial real estate can make you extra money, but you're in the business of dentistry, not being a landlord. You could generate an amount on commercial real estate development, but when you're capital hungry, bad idea, especially when your primary source of income is dentistry. Rent is cheap, I'd rather pay the rent, free up my obligations, and I'm getting free water/trash. On paper, it sounds like a great investment, but I'm adverse to it in my area due to high vacancy rates in commercial real estate. That gives me as a tenant more negotiating power. Areas that have high occupancy rates typically have lower CAP rates and less profitable as a buy and hold.

One thing I forgot to say is negotiating with landlords... Try not to go with large corporation owned strips. There's so much BS and restrictions with those landlords and I got lucky in that mine was very informal, no BS, pay rent and no problems.

Edit: RE is slow and steady money as a buy and hold strategy. I want to retire fast, so I don't dabble in real estate holdings, only hard money lending.

 

[bjpenn]

Great thread tanman!

1.What state are you located in to have such a huge number of active patients ?

2.Do you think doing radio tv seo and adwords help bring in Medicaid patients (i know you don't see them, but i plan to)? How do you come up with the radio/tv content?

3.do you have a person that helps you do seo adwords ?

4. Can you talk about your financing options ?

5. How do you get your staff to work your hours? most staff have children and want to be with them on the weekends

 

[fa_tth]

Amazing thread.

A lot of questions have been asked in regards to the dentistry but I'm more curious about the business side of things. More specifically, what are some resources you can recommend to learn how analyze an area for startup or business methodology in general? I'm currently in my 2nd year and I know my school won't teach me anything I actually need to know about the business side of things and I would really like to start now rather than as an associate.

 

[TanMan]

Great thread tanman!

1.What state are you located in to have such a huge number of active patients ?

2.Do you think doing radio tv seo and adwords help bring in Medicaid patients (i know you don't see them, but i plan to)? How do you come up with the radio/tv content?

3.do you have a person that helps you do seo adwords ?

4. Can you talk about your financing options ?

5. How do you get your staff to work your hours? most staff have children and want to be with them on the weekends

1. Texas
2. Yes, but you need to target stations that cater to lower-income medicaid patients and spanish stations. I get demographic reports from the stations that we have exclusivity with that allow us to target the stations that work. Radio/TV content generated is a creative production with my advertising agency and exclusive affiliate stations. Strategic branding and indirect attack on competitors.
3. No, I do my own adwords. SEO, I used to do myself for the first two years. I don't have time anymore, so I outsourced it. If you do medicaid, you need to target keywords that medicaid people usually search for. i.e, "dentist who accept medicaid, free dentist, children's dentist, etc..."
4. Financing option is 50% down, 3 monthly payments for other half.
5. Made it clear to them that they must work evenings, saturdays, and sundays before hiring. No exceptions. If they can't work those hours, don't work here. That's made clear when I post listings or interview. I do profit sharing and large bonus incentives that give them about twice the market rates for assistants and they get a paid company vacation - so they are willing to work those hours.

 

[TanMan]

Amazing thread.

A lot of questions have been asked in regards to the dentistry but I'm more curious about the business side of things. More specifically, what are some resources you can recommend to learn how analyze an area for startup or business methodology in general? I'm currently in my 2nd year and I know my school won't teach me anything I actually need to know about the business side of things and I would really like to start now rather than as an associate.

Easy methodology: look for areas that have large concentrations of medicaid. Lots of support staff is needed to support those populations. Now look for the number of FFS/PPO offices in the area. If the number of offices are low, setup an FFS/PPO office there. Reason: the support staff are usually hospital workers, schoolteachers. Overutilization of medical care and lots of kids tends to need a lot of hospital workers and teachers. Otherwise, everything else is stab in the dark.

Startup methodology depends highly on what type of office you're going to open. Medicaid mill, boutique practice, or average ppo/ffs office. You need to decide, then go from there, because each type is a bit different, and although you can jump from one or the other, how you brand your office matters a lot in the first year.

 

[bjpenn]

Can you outline your marketing budget for the first three months of startup ? Like what marketing you used and how $$ for each

 

[TanMan]

Can you outline your marketing budget for the first three months of startup ? Like what marketing you used and how $$ for each

I'll try and recall as much as I can. First month was a failure with flyers/printed media. I would not even consider them. Second month onward, we started off with radio and adwords. Started with about 50/day on adwords + 1500/month on radio + 500/month on seo. In december, I think we hit it relatively hard with 8-10k on the third month of operation because of the targeted message of "use your insurance before you lose it, and dental insurance doesn't roll over like roll over minutes" That was the first time we broke 100k production and that's what made me into a believer of advertising. I'm not sure exactly when we added TV, but my first experience with cable TV was very cheap. I was able to secure a dollar per spot when they had excess inventory they couldn't sell, but that was 2 years ago. If I were to do it again, I'd add on cable TV from the get go. Very good return on investment and branding equity. Just make sure you rotate your channels every few months so you dont capture the same audience over and over.
Another big hit, NFL advertising! We saw a massive influx of patients from bombardment of NFL TV advertising with our local fox affiliate station. I think I only paid 2750/month for 6 months.

Eventually, our budget normalized to about 12-20k/month (4k/month on adwords + 7-15k on traditional media (5k radio, rest on TV), depending on our seasonal strategy. There are some times you don't have to pump the advertising such as times you are closed (if you are going on vacation), after back-to-school (slowtember), black friday thanksgiving (people focused on shopping), etc... Due to our spend with advertisers, we can usually get right of first refusal, block out other offices from advertising with those stations, block their radio dj's from endorsing any other dentist. Sometimes we have opportunities to have some B-list celeb or local celeb endorse us and let us host their event. Might seem crazy to spend that much, but there's a method to the madness. I will admit though, this was a major gamble in the beginning. I spent the rest of my money on advertising hoping it would work and thank goodness it worked or I wouldn't be here today. Probably be working for corporate still.

 

[DDSER1]

This might be off topic but what is your own personal lifestyle like during this time when you're saving for retirement? Are you able to enjoy your money to a certain degree or do you invest everything back into your business and other projects?

 

[bjpenn]

Radio and tv reach a wide audience. How far do your patients travel to see you?

My thoughts would be eve though you do evening and weekends, they still want to be no more than 10min driving distance.

I'll try and recall as much as I can. First month was a failure with flyers/printed media. I would not even consider them. Second month onward, we started off with radio and adwords. Started with about 50/day on adwords + 1500/month on radio + 500/month on seo. In december, I think we hit it relatively hard with 8-10k on the third month of operation because of the targeted message of "use your insurance before you lose it, and dental insurance doesn't roll over like roll over minutes" That was the first time we broke 100k production and that's what made me into a believer of advertising. I'm not sure exactly when we added TV, but my first experience with cable TV was very cheap. I was able to secure a dollar per spot when they had excess inventory they couldn't sell, but that was 2 years ago. If I were to do it again, I'd add on cable TV from the get go. Very good return on investment and branding equity. Just make sure you rotate your channels every few months so you dont capture the same audience over and over.
Another big hit, NFL advertising! We saw a massive influx of patients from bombardment of NFL TV advertising with our local fox affiliate station. I think I only paid 2750/month for 6 months.

Eventually, our budget normalized to about 12-20k/month (4k/month on adwords + 7-15k on traditional media (5k radio, rest on TV), depending on our seasonal strategy. There are some times you don't have to pump the advertising such as times you are closed (if you are going on vacation), after back-to-school (slowtember), black friday thanksgiving (people focused on shopping), etc... Due to our spend with advertisers, we can usually get right of first refusal, block out other offices from advertising with those stations, block their radio dj's from endorsing any other dentist. Sometimes we have opportunities to have some B-list celeb or local celeb endorse us and let us host their event. Might seem crazy to spend that much, but there's a method to the madness. I will admit though, this was a major gamble in the beginning. I spent the rest of my money on advertising hoping it would work and thank goodness it worked or I wouldn't be here today. Probably be working for corporate still.

 

[TanMan]

This might be off topic but what is your own personal lifestyle like during this time when you're saving for retirement? Are you able to enjoy your money to a certain degree or do you invest everything back into your business and other projects?

I don't go out much, I got a house, got a very slightly used car (someone used it for a month, didn't want it, so they lost 30k in depreciation) recently, most everything else is reinvested back into businesses. Collect firearms as a hobby, live comfortably, don't have to worry about living expenses. That car was probably the first thing I've splurged on in the last 5 years.

 

[TanMan]

Radio and tv reach a wide audience. How far do your patients travel to see you?

My thoughts would be eve though you do evening and weekends, they still want to be no more than 10min driving distance.

Patients will travel up to a 150 miles from the rural regions to see me if there is no dentist there and they are in severe pain. And willing to wait if I'm completely packed. Evenings and weekends are for working professionals that can't take time off work. They'll travel since the have to commute home anyway..

 

[DDSER1]

I don't go out much, I got a house, got a very slightly used car (someone used it for a month, didn't want it, so they lost 30k in depreciation) recently, most everything else is reinvested back into businesses. Collect firearms as a hobby, live comfortably, don't have to worry about living expenses. That car was probably the first thing I've splurged on in the last 5 years.

Thank you!

I was wondering how you think one should compete/market/advertise in a hypersaturated market? I grew up in Toronto and hope to return there and buy my parent's practice from them, but Toronto is probably the most saturated city in all of Canada. Should I just give up that hope and look for areas where I can start up?

 

[TanMan]

Thank you!

I was wondering how you think one should compete/market/advertise in a hypersaturated market? I grew up in Toronto and hope to return there and buy my parent's practice from them, but Toronto is probably the most saturated city in all of Canada. Should I just give up that hope and look for areas where I can start up?

Less competition means more growth, more growth means more money and retiring faster. So yes, I'd say give up, look for a less competitive area, setup there, and if you really want to return there, make as much money as you can and then get out. That way you are in a city that you want to live in while you're still young with a lot of money too. Otherwise, in extremely saturated areas, growth is slow, you'll end up working for 30 yrs with a mediocre lifestyle, then hope you have enough money to survive retirement and not be too old to enjoy your money. Being poor sucks, and does that really offset the location you'll be in? I never thought I would like Texas, but I call it my home now. Guns, cars, and money... what else can you ask for?

Edit: I realized that I didn't answer your first question, if you really want to be there, a large city can usually be divided into sections. Pretty much, stay away from bunches of dental offices, I'd stay in the outskirts of the city if possible with other adjacent suburbs that are more affluent. Look for areas to setup where the commute is from where people work to where they live (draw a line), and target your location along that line. It'll be a lot slower growth, more competitive, and you'll have to be a lot more aggressive. Don't fall for the price trap though, keep your exam fees higher than avg to filter out the riffraff and timewasters.

An interesting tidbitI just remembered: Why do Fridays and evenings lead to higher treatment acceptance? The patients are beat down already from the week, if they just got off work, they are tired and willing to just say yes a lot more; especially those that have been in pain all day or week.

 

[Roy Williams]

Thank you!

I was wondering how you think one should compete/market/advertise in a hypersaturated market? I grew up in Toronto and hope to return there and buy my parent's practice from them, but Toronto is probably the most saturated city in all of Canada. Should I just give up that hope and look for areas where I can start up?

Just a thought, but do you need to market/advertise if you take over your parents' practice? I'm assuming they have a steady patient pool and those would just eventually roll over to you?

 

[TanMan]

Thank you!

I was wondering how you think one should compete/market/advertise in a hypersaturated market? I grew up in Toronto and hope to return there and buy my parent's practice from them, but Toronto is probably the most saturated city in all of Canada. Should I just give up that hope and look for areas where I can start up?

On an additional note, if your parent's production is sufficient for you and the price is right, take it over, you have a headstart. I have some colleagues whose parents have poor production to where it would be hard to turn around in terms of efficiency, especially since some of them are still practicing and are not receptive to change and improvement. This would depend on the terms that your parents want in terms of transition, but if you really want to stay, just make sure it is for the right price.

 

[DDSER1]

Less competition means more growth, more growth means more money and retiring faster. So yes, I'd say give up, look for a less competitive area, setup there, and if you really want to return there, make as much money as you can and then get out. That way you are in a city that you want to live in while you're still young with a lot of money too. Otherwise, in extremely saturated areas, growth is slow, you'll end up working for 30 yrs with a mediocre lifestyle, then hope you have enough money to survive retirement and not be too old to enjoy your money. Being poor sucks, and does that really offset the location you'll be in? I never thought I would like Texas, but I call it my home now. Guns, cars, and money... what else can you ask for?

Edit: I realized that I didn't answer your first question, if you really want to be there, a large city can usually be divided into sections. Pretty much, stay away from bunches of dental offices, I'd stay in the outskirts of the city if possible with other adjacent suburbs that are more affluent. Look for areas to setup where the commute is from where people work to where they live (draw a line), and target your location along that line. It'll be a lot slower growth, more competitive, and you'll have to be a lot more aggressive. Don't fall for the price trap though, keep your exam fees higher than avg to filter out the riffraff and timewasters.

An interesting tidbitI just remembered: Why do Fridays and evenings lead to higher treatment acceptance? The patients are beat down already from the week, if they just got off work, they are tired and willing to just say yes a lot more; especially those that have been in pain all day or week.

On an additional note, if your parent's production is sufficient for you and the price is right, take it over, you have a headstart. I have some colleagues whose parents have poor production to where it would be hard to turn around in terms of efficiency, especially since some of them are still practicing and are not receptive to change and improvement. This would depend on the terms that your parents want in terms of transition, but if you really want to stay, just make sure it is for the right price.

Thank you for all this information! Really gives me a lot to think about. I guess I'll first have to see how dental school goes and then how my experience/pay would be working for them when I graduate to really see if its worth it. I think they produce around 1.2-1.3 a year, and if it stays at that level by the time I graduate I'd be more than happy with that, but I'm also of the mindset that if I do take over, won't I lose a significant portion of their existing patient base?

Just a thought, but do you need to market/advertise if you take over your parents' practice? I'm assuming they have a steady patient pool and those would just eventually roll over to you?

My thought process is that I would lose a significant chunk of their patient base if I were to take over, and I feel that marketing/advertising is something that you can always do to attract new patients.

 

[bjpenn]

Patients will travel up to a 150 miles from the rural regions to see me if there is no dentist there and they are in severe pain. And willing to wait if I'm completely packed. Evenings and weekends are for working professionals that can't take time off work. They'll travel since the have to commute home anyway..

Don't u think treating children is easier than adults ? Doing ol and ob is a lot faster than doing endo bu crown

 

[TanMan]

Don't u think treating children is easier than adults ? Doing ol and ob is a lot faster than doing endo bu crown

Competition is higher in the children's market, more annoying, and more stressful. If you had a 10yr plan to retire, could you handle children for 10 years? Sure, faster money by volume, but how many of those can you juggle at the same time. You can't jump around with children as much as their attention spans are lower and anesthetic wears off faster. Maybe if you're doing 20ssc's at a time under sedation, why not, but i'd rather stick to rct,bu,crown. I can juggle more patients and make more under less stress.

 

[DreamChaser01]

Is Sunday appointment a big selling point?

 

[bjpenn]

Competition is higher in the children's market, more annoying, and more stressful. If you had a 10yr plan to retire, could you handle children for 10 years? Sure, faster money by volume, but how many of those can you juggle at the same time. You can't jump around with children as much as their attention spans are lower and anesthetic wears off faster. Maybe if you're doing 20ssc's at a time under sedation, why not, but i'd rather stick to rct,bu,crown. I can juggle more patients and make more under less stress.

If you're in a Medicaid population surrounded by Medicaid how do you get insurance pts to accept tx? Most of the time they don't want to even pay the copay?

Who do you use for your merchant services?

Do you use only in house financing or do you care credit and compassionate finance ?

 

[TanMan]

Poorer areas, less to do for them, more disposable income. Insurance and medicaid patients don't really mingle/mix too much here. Those that have medicaid and insurance are usually entitled and annoying patients. So, not taking medicaid is another filter for those used to no copay medicaid and expect the same for their insurance.
Merchant services, I use BofA - faster, quicker money
Inhouse financing and care credit. I don't push care credit too much.

 

[TanMan]

Is Sunday appointment a big selling point?

Definitely! I think Sunday is my highest hourly producing sometimes, rivals Saturday.

 

[super frank]

I asked this in another thread but I would love to have your opinion as well!

Would you recommend the NHSC Scholarship (pays for four years of school in return for four years of service in an underserved area as an associate)? I will be attending an Ivy ultimately with the ambition to specialize at some point, however, the price tag is steep and I'm wondering if perhaps I should accept the scholarship (if rewarded) and maybe return to specialize following my commitment of four years... Also I don't know if returning to specialize will make sense, especially for OS, at such a late age.

What I guess I'm asking is should I forgo the scholarship (again, if awarded) and specialize (OS) with the debt instead. Is the income that OS pull really that much more significant that the debt will become less burdensome? I suppose it's also important to factor in those four years of OS income that would be missed with the scholarship...

 

[TanMan]

I don't know anything about NHSC, but here are my questions for you:

Can you open your own office in an underserved area? If the answer is yes, then I would go for it if you can find a location of underserved but with some middle income people. They are not exclusive categories. There could be underserved middle income if its in the middle of nowhere. If the answer is no, then the next question is pay. How much do you make as an associate or can you associate with anyone? I think 4 years is too long to wait to start your own office, and when you have your own office, you can pay down your debt superfast. What are the penalties for breaking the contract?

I don't think it makes sense to specialize at such a late age. Lets just say that the best prime years of your life last till 50... If you spend 4 years in OS, that's 8% of your peak producing life that you'll never get back. I think you should forgo scholarship, because with your OS income, you'll make way more by practicing 4 more years as an OS and you can get on with your life.

 

[bjpenn]

How did you learn about Medicaid/ppo insurance billing ?

 

[Kareful]

I am enjoying this thread! Thank you, TanMan.

 

[Grinz]

Is your practice set up as a S-corp or LLC?

 

[TanMan]

How did you learn about Medicaid/ppo insurance billing ?

From corporate employer and some billing course. I learned how my former employers billed and copied them. PPO billing, learn as you go... see what they pay, who pays, who doesn't, and adapt as needed.

Is your practice set up as a S-corp or LLC?

S-Corp

 

[Grinz]

TanMan, as an S-Corp can you not just pay yourself a reasonable salary, say 120K and invest the remainder of your Corp net income after your overhead into bonds/funds or something else so it doesn't count as income for you? If you're on PAYE or IBR your AGI can be significantly reduced so your loan payments would be next to nothing and then at the end of 25 years after everything is forgiven you can just liquidate some of your investment funds if you'd like for the tax bomb. Is that something legally allowed with an S-Corp? If so are you doing that?

 

[TanMan]

TanMan, as an S-Corp can you not just pay yourself a reasonable salary, say 120K and invest the remainder of your Corp net income after your overhead into bonds/funds or something else so it doesn't count as income for you? If you're on PAYE or IBR your AGI can be significantly reduced so your loan payments would be next to nothing and then at the end of 25 years after everything is forgiven you can just liquidate some of your investment funds if you'd like for the tax bomb. Is that something legally allowed with an S-Corp? If so are you doing that?

My question is why would I want to put it into bonds/funds? I would also minimize my s-corp's assets so that you'll have less for creditors to go after. Create another business, drain your office's equity, then invest using that business. My goal is quick retirement, at some point, I'll have to pay taxes on it. I tend to invest my post-tax income into businesses with ROE of at least 100% after the first year. My student loans are almost paid off (PAYE/IBR just delays the inevitable, if you have the money, nothing to invest in or have excess money, pay your loans, otherwise, PAYE/IBR is more for cashflow issues). 200k is insignificant in the course of 25 years of practicing as a dentist, I don't understand how we could not pay that off during that time, and what the ending balance would be after 25 years if you happened to prolong it. I wouldn't try and lower my AGI lower just to reduce loan payments; reduce tax liabilities, but not loan payments. Last people you want to mess with is the IRS. You may wonder why I don't conglomerate my businesses into one umbrella - liability purposes. I could aggregate them all into one, but if one business gets attacked by lawyers, the other operations maybe affected. I could try and drain all the equity out, but still a problem on the operations. That's why I have asset protection lawyers to take care of these things for me.

I don't think you can do that as an S-corp, and I wouldn't do it for the above reasons. Either way, on your 1120S form, you'll still pay the taxes. You're just reducing your own payroll taxes as an S-corp.

Disclaimer: Not a lawyer, not a CPA, discuss these things with a licensed professional. Not liable for anything said in this post.

 

[bjpenn]

Do you remember the name of the billing course?

 

[cheesyfries]

Do you have a Cerec machine or do you mail out to a lab?

 

[TanMan]

I'll see if I can find the name. I remember it is in Dallas but that's pretty much it.

I do have a CEREC machine, most of our single units are made here but if gold or zirconia is indicated, then I'll send it out to a lab.

 

[Incis0r]

Just dropping in to say CONGRATULATIONS on your amazing amazing amazing success, @TanMan . It takes a lot of willpower and dedication to sacrifice what you have and I'm glad you're being rewarded for your efforts. Wishing you many more victories . I'll be rooting for you when you finally cross the early retirement finish line!

 

[bjpenn]

I'll see if I can find the name. I remember it is in Dallas but that's pretty much it.

I do have a CEREC machine, most of our single units are made here but if gold or zirconia is indicated, then I'll send it out to a lab.

What job posting site worked out best for you ?

 

[TanMan]

What job posting site worked out best for you ?

Craigslist

 

[Sanducan]

Thank you for sharing your experience, this is truly amazing Tanman.

Question on start-up cost. You mentioned that you went very cheap in order to do your buildout, $60k if I can remember correctly (Please let me know if this is correct). Do you think $350k will be able to do a start-up from scratch with marketing budget included, and without TI money? Looking at 6ops in GA.

 

[TanMan]

I think it was somewhere around 60k for construction and 40k+ for equipment. ; That should be more than enough. Your marketing budget scales with the number of patients you can see. There's no point in getting 500NP a month if you can only handle 400.

Marketing budget should be sufficient for a 6ops office. I would warn against going that small in the long term w/o any foreseeable way of expanding. I don't see moving as a viable option because you'll lose patients during the transition. I'm picking up a lot of patients from a dentist that decided to move about 1 mile down the road (good for me, bad for them). You would want to have the option to expand later on; otherwise you'll be stuck at 6ops with minimal room to grow. Especially if you're planning to do a multidoctor office.