In the pursuit of chasing myths, I find this article to be near and dear to me. There is rarely a week that goes by that some recent graduate does not pose a question related to the pursuit of myths that began in Dental School. I am sure there has never been a recent graduate who just received their diploma from Dental School who was joyously jumping up and down with the vision of becoming “average”. If you want to take a glimpse into the future, you need only look at your history or past. I thought it would be fun to make a short list of the Dental School myths we continue to live by today. Believe it or not, most doctors are still influenced by these myths. I think that these limiting beliefs account for most of us ending our career with the inability to retire wealthy, with various choices during our careers, and by all accounts a good steward of our lives.
You will be paid 35% or more of your production when you graduate. The much touted, often repeated cheer of Dental School proctors, who for the most part never really embraced or understood the business of dentistry. This is first of many myths that, in this case, introduce “entitlement” into our lives. We worked hard, accumulated debt, and as new doctors (or old) we deserve the “good life”. Fact: If you are not saving at least 20% of your income each year, you will not be able to replace your income in retirement. Entitlement seems to linger far into our lives and right into retirement. The simple phrase “we deserve” is so far from the truth that it should make us laugh. If you are persistent, continue to learn, and live beneath your means, you can have anything you want in life. When we dissect how an associate should be paid, it comes down to an algorithm. Far too many times senior doctors and junior associates seem to think that there is a fixed pay percentage that should be paid. Far from it. When we consider what to pay an employee doctor, we must realistically consider our practice overhead. I continue to see pay that is in the 30%+ range in offices whose overhead exceeds 70%. If you don’t have an overhead of less than 63%, you are not ready or qualified to bring in an associate. The reality of bringing in another doctor has to be to create more profit. This income through profit from an associate’s work should be in the 5% to 10% plus range. Why would you hire someone in order to lose money? So, you are discussing pay with your prospective associate and you tell them that you need to make at least 5% or more on their work. The associate agrees that, sure, that makes sense. Why would you hire me if I cost you money? You then go on by telling them your current overhead is 72% and of course we will need to hire another assistant and fix up the room that no one likes before you start, so, I can afford to pay you 23% of your net (adjusted) production as pay. This is the reality of hiring associates. Your overhead and growth curve would have to work to create profit for you as well as a salary that someone could and would work for.
Get out of school and go into an associateship so that you can learn the business of dentistry and pick up your speed. Think through the logic of this: You are going to go to work for a corporation that cares nothing about you or work for a private practice that at best is only going to be average. It sounds like the perfect recipe for mediocrity. It is certainly true that with huge school debts many of us will need to work as an employee. But you are responsible for placing yourself at the feet of a doctor with good experience, who would be an incredible mentor. Add to that the need for this office to be able to double their new patients and expand their hours. It takes time and a little luck to find them, but look you must. Don’t just settle for a job. Be aggressive about staging the first step of your career. The last steps often times will depend on these first choices. If you are mid-career or near the end, I bet you can look back and see that the path you took determined the career you realized. As dentists, we need to always expand our services and improve our clinical acumen.
Graduate and move back to your hometown. The decision of where you practice will have the greatest impact on the career you experience. Large cities are over-run with dentists, and often have poor patient demographics. While the location of your practice is a life choice, it needs to be tempered with the best economy and demographic you can find. This, and this alone, separates the average dental practice from the exceptional one. If you are under 50 and looking at a plateaued practice with little hope of turning it around, consider a sale and a move. I have never seen a doctor with a practice that, if opened in the right location, couldn’t be out of debt in 5-7 years and then 10 years later be able to retire.
Debt is normal. You need to be out of school and out of debt in 5 years or less. We have become a society of debtors that will spend 50% of our incomes over our lifetimes servicing these debts. If you are over 55 and have any debt, it may be too late. We already know that you can’t buy disability insurance after age 64 because odds are that you will be disabled. There is no guarantee that you can practice till you are 70 (no one wants an old doctor to work on them anyway). Regardless of age, income, or type of practice, we need to move quickly toward being completely out of debt. The myth that debt is normal is killing generations by selling a lie that will almost always end in catastrophe.
Dental salesmen, lawyers, CPA’s, consultants, corporate practices, and insurance companies are your friends. Unfortunately, you are a commodity that exists to be sold products and services these people have to offer. We need all of these areas of expertise, but just like dentists, most are average at best, and at worst are unengaged and dangerous: Just disasters waiting to happen. The stories I hear on the phone about examples of these folks that have ruined the lives of unsuspecting doctors are endless. We need to carefully and thoughtfully perform “due diligence” and find the very best. If you need help, just give me a call.
Your buddies are doing better than you are. You never see or hear the truth because it is always colored by someone else’s opinion or mislaid facts. We all know a classmate that does $3,000,000 a year, is married to a Dallas Cowboys cheerleader turned neurosurgeon, with three Rhodes Scholar kids. The other side of this story is that they only net 10% from the practice, she dates around, and the kids are drug addicts. You don’t have to worry about the other guy. This is your game and no one else is playing against you. You can have a low overhead and high net practice, with a great spouse and super kids. You get to choose the adjectives that will define your life. Your dental career and your personal life are not a sprint, but rather a journey (and maybe an ultra-marathon!). Please, please don’t get your information from Facebook where everyone is an expert and they are all killing it. The advice you see on these chat threads is horrible. Basically it is just the “blind leading the blind”, and both are lying about their circumstances and accomplishments.
Patients will bond to our practice for life if we do our part. NOT! People are more nomadic and fickle today than ever before. Fortune magazine found in an annual survey that 87% of patients would leave a physician for a $5 difference in co-pay. Your relationship with patients is like hiring a coach in the Big 10 conference: “Coach, we’re behind you 100%, as long as you win or tie. You lose and you’re out of here.” Consumer driven businesses have to deal with the reality that our clients look at us and ask: “What have you done for me today”.
I’m going to ____________when I ____________. All young doctors and many “seasoned” doctors have said this. You fill in the blanks. Pace yourself because you are going to be stuck here a long time. You need to find joy in the journey because most of us will never make the destination: The practice we always thought we would have.
That’s it: Quick and simple. Myths that have led to limiting beliefs that hold us back from the practice we always thought we would have. Take a hard look and decide to no longer let your past limit your future. That is how you Summit.
Michael Abernathy, DDS