While working within the Dental Industry, we have listened to many concerns and curiosities of recent graduates. As a dedicated dental student you're more than likely unfamiliar with the buying process of a Dental Practice. This obstacle can be quite daunting to a recent graduate, and there are some things you'll need to know before heading down this path. The following is a road map of sorts for your first few steps into the Dental Industry:
- What should I do? - One word. PRODUCE. For the next two years I want you to work your tail off as an associate. Keep your head down and get as much production as you can. I’ll explain throughout this post. The bottom line is banks will finance you if you have a heartbeat, 700 credit score and the production to sustain the targeted practice.
- Where should I work? – I don’t care. But you need a vision. Are you going to open your own practice? If so, be careful of the restrictive covenant you sign. My short advice is do not start work in the town you want to end up in. Your employer will have you sign a covenant restricting you from working within a 2 – 5 mile radius of that practice for a decided upon number of years. WARNING, pay attention to the number of locations the covenant includes. If the verbiage in the contract includes other locations as part of the restrictions, you will be unable to work within 2-5 miles of those practice as well.
- Should I have a marketing plan? Your marketing plan is you! Invest in yourself right now. Your education does not stop when you walk down the aisle in your cap and gown. Remember when I said production was key? Learn everything you can. If your employer will pay to train you and get invisalign certified, or learn 6 month smile solutions, heck even Botox or Juvederm, your hand better be raised with you saying “yes please, I will do it”. Everything you learn today will be on your website 2 years from now, think about that as a goal, no I mean it, let that sink in. You need to be hungry and constantly learning.
- What should I be learning or reading? Everything. I personally love the book, The e-myth by Michael Gerber. A very short story that explains the differences between being an employee and being an employer. But again, my short answer is have a vision, think what you want your practice website to look like (just an analogy). Every certificate you get now will only make you stronger tomorrow.
- Is there a dollar amount I need to have to purchase a practice? No, remember money does not buy happiness, it gives you options. Let’s say 2 years from now you are ready to buy and do not have any money. The banks will still loan up to 110% of purchase price (includes some working capital) but they may only go up to say a $600,000 practice (just a number I made up). Now if you have $50,000 to put down, they may go up to $800,000 practice (again just a number I made up). The point is if you have money it only helps. You might be able to stretch for a larger practice, a whole different article I am not getting into here.
- Job listings want me to work primarily with kids, how do I work on everything? You get one shot at negotiations and that is before you sign the employment agreement. You have the opportunity to walk away. After you have picked a practice to associate at, and after you have agreed (even in your mind) to the salary, hours, covenant, benefits, you then play this card. You tell your future employer that you have basically agreed to everything and are very excited to join their team. You tell them that you are very interested in learning everything you can and specifically you are interested in these procedure codes (endo, implants, crowns, whatever it is that you want to learn). You tell them that it is very important to you that you complete at least (pick a number that you want) of these in the next 12 months and want it IN WRITING AS PART OF YOUR EMPLOYMENT AGREEMENT that it will happen. You can then ask to see the production report for the previous year and it will show you how many of those procedures that office had performed. You can then say I want “x” number of those procedures this next year. If they do not perform those procedures, you may want to reconsider that office.
- Do I need to produce for 2 years before I can buy a practice? No, of course not. These are just guidelines for bank financing and even those are not set in stone. We are currently helping a young dentist, 8 months out dental school, who is producing $8,000 a day purchase a $5M dollar group practice. It just depends on your situation. Again, keep producing, keep learning, keep your eyes open for opportunity and you will crush it.
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