Episode 198 – So You Want To Open A Practice?

“It all depends on who you are, where you’re located, and ultimately what type of practice that you want to have.” ~Dr. Bruce B. Baird

Dental professionals are greeted with a plethora of decisions to make when contemplating the establishment of their own dental practice. That’s why, for this episode of The Productive Dentist Podcast, your host Dr. Bruce B. Baird sheds light on critical considerations such as practice financing, location selection, and business model choices. From the initial stages of securing funding and crafting a business plan, to the ongoing pursuit of excellence through continuing education and strategic marketing, Dr. Baird offers a comprehensive roadmap for success in the world of dentistry. 

Whether you are on the brink of launching your own practice or you’re simply interested in learning more insights from a seasoned professional, this episode of The Productive Dentist Podcast promises to inform and empower you on your journey toward practice ownership and professional fulfillment. 

As you listen to this episode, ask yourself the following:

• What specific things can you do to prepare yourself for practice ownership? 
• What business model would align best with your own goals?
• What strategies would you implement for success in owning your own dental practice?
• What are you willing to do to adapt and evolve to respond to changes in the dental profession?

EPISODE TRANSCRIPT

Regan 0:00
Hi, Doctor. Regan Robertson, CCO of Productive Dentist Academy here and I have a question for you. Are you finding it hard to get your team aligned to your vision, but you know, you deserve growth just like everybody else? That’s why we’ve created the PDA productivity workshop. For nearly 20 years PDA workshops have helped dentists just like you align their teams, get control of scheduling, and create productive practices that they love walking into every day. Just imagine how you will feel when you know your schedule is productive, your systems are humming, and your team is aligned to your vision. It’s simple, but it’s not necessarily easy. We can help visit productivedentist.com/workshop that’s productivedentist.com/workshop to secure your seats now.

Dr. Bruce Baird 0:46
There are so many dentists that we see on on the different Facebook groups everything else I opened my office two years ago, three years ago and I’m struggling and I’m, I’m really having trouble and you know, some of those, you know, probably should have worked and learned a little bit more about dentistry before they did that. Hello everyone, this is Dr. Bruce B. Baird and you’re listening to the Productive Dentist Podcast. In this podcast, I will give you everything that I’ve learned over the last 40 years in dentistry working with 1000s of dentists. I’ll tell you it’s not that my way is the only way, it’s just one that has worked extremely well for me and I’d love to share that with you so you too can enjoy the choices and lifestyle the productivity allows, more time for things you love, increased pay, better team relationships, and lowered stress. Let’s get into it with this week’s episode of the Productive Dentist Podcast.

Dr. Bruce Baird 1:52
This is Dr. Bruce Baird with a Productive Dentist Podcast. Today I’d like to talk a little bit about, had several questions about, is it, what would be the best strategy for me if I wanted to open up my own dental practice, you know, my own office? And you know, there’s many, many, many different thoughts about that. Some say, “Well, how do I start?” You know, one question was, “Can I just start as a fee for service practice? Would that be possible? Would I do I do I need to sign up for PPO is when I first get started?” And those are all you know, really great questions and it really depends on who you are, where you’re located, and what type of ultimate practice that you want to, to have. What’s your financial situation? Are you are you going to go to a bank for financing? Do you have some revenue that you put aside over maybe you’re eight years out of dental school and you’ve been working in, in, in other offices as an associate? Those are, those are all the things to look at. So I’m trying to break it out. If, if you know, if you’re coming right out of dental school my suggestion is and again, it depends. You know, I’ve seen some young dentists coming out of dental school that could open up their own practice, I would say that’s probably Five Percenters, maybe five out of 100 dentists that come out of dental school could open up their own practice, and, and do well. What about the other 95%? Well, I, I, myself, personally, I was very comfortable doing the dentistry when I came out of dental school. We, you know, this is back 44 years ago, but we got to do all kinds of extractions, endo, period, surgeries, we, you know, we were very well versed but as someone coming out in the last few years COVID affected, you know, affected your, your education, you know, some of you have done, have done very few extractions, some of them very few, you know, any, any types of restorations, you know, because of COVID and so, for somebody like that, I would say, “Hey, I went in the military for four years, I learned so much it was, it was amazing. I had very little pressure because I was in the service. I was only making 28,000 a year as a captain back in 1980, 81, 82, 83, 84,” but I learned enough, it was my education, it was watching other dentists, watching other specialists to do things that really helped me and then when it came time for me to open up my own practice, I still didn’t have any money, had to go get 100% bank financing and so I went forward and that’s what I did and I felt very comfortable.

Dr. Bruce Baird 4:49
Now, having said that, I, I didn’t struggle from the financial standpoint early on in my career, I was just working my ass off, I was literally working 65 hours a week when I got out now, and you guys have heard, you know, listened to the podcast before and I’ve said, “Gosh, it cost me a marriage,” and, you know, because I was just so all in involved and totally consumed by the practice. I probably wouldn’t go back and do it the exact same way. Although I learned so much and it turned out fine because I, I’m, I’m pretty much I’m very stubborn and I wanted to have what was called what I consider to be an ideal practice and we continued, it just took us a lot longer than I thought. I think I could have taken more business courses and had a better understanding of, of the world of business before I just decided to open up a practice. However, well, how did I open up that practice? Well, I, I did what’s called a 5, 504 Dementia with the SBA. Why? Because I couldn’t get a bank to loan me money. Now today, banks, banks will loan your money, if you have if you got a dental degree, and they’ll loan you the money to buy a practice, they’ll loan you money to to build a practice. It’s just you got to be ready for it. There’s so many dentists that we see on, on the different Facebook groups and everything else that I opened my office two years ago, three years ago when I’m struggling, and I’m really having trouble and you know, some of those, you know, probably should have worked and learned a little bit more about dentistry before they did that but you know, everybody, everybody has their own ideas about what they want to do and I’ve seen gosh, I’ve seen a lots of young dental entrepreneurs that are ready to go in and open up their own practice. If I had to do it again, over today, I might go the SBA route again, why because you can do things now with SBA with 10% down, if you had saved some money, and those, the SBA loan your the money, and you can start your business and start your practice and buy your equipment and do everything from the ground up. Whether you’re buying a lease space, or whether you’re building a new facility, I probably would go with a leased space first, build your, build your your base of patients. Would I do that with a PPO, using PPOs? Gosh, there was no such thing as PPOs back in the early 80s. So I was a fee-for-service.

Dr. Bruce Baird 7:33
Well, what did I do? Well, I started my own plan, my own, you know, my own plan, like you know, everybody’s doing now, a discount plan for patients to come in and, and I did it myself, I went around this house and I started offering 20% off my fees to the nuclear power plant to some large employers in town, and handing out brochures and everything else, I was committed, 100% committed, because we didn’t have PPOs, we can sign up and give away 40% of our fees to PPO. So what I started out that way, where you’ve got two options, one is you could have something to sign up with all the PPOs as you can, and I would understand that I would understand, “Okay, I gotta have patience in here, I’ve got to make some money, somehow, some way to get this done.” On the other hand, you know, if you’re able to get good find financing or good funding, or you had some backing, you know, that you could begin marketing from the get go and also have the energy and the willpower to go out and to meet people in the community and to offer discounts. When I say discounts, it’s like your, your standard, you know, plan that you would have in-office plan that is become, becoming very popular now. I did it 44 years ago, or 40 years ago, and it was popular, then it’s just no one else was doing it. So it was kind of I wish I had my own unique identity and I was able to do that but if I, if I did decide I wanted to have I did not have a lot of financial backing, I didn’t have a lot of money behind me and but I still was able to get funding and financing but I just didn’t have a lot to use for marketing and everything else. I would, I wouldn’t mind I’d sign up for the PPOs even knowing that there was a 40% to 50% discount on my fees. Why? Because I want to have cash flow, I want to have money coming into the business. Now at that point in time from the get go, I would set aside a percent of my budget. Now 8% of your budget is a lot of money. If you think about it, 8% of your collections, previous month’s collections. So if you collected 50,000 that’s 4000 a month and that first couple of years that I had the PPOs, and I had signed up for him that money was coming in whatever was collectible, I’m going to spend 8% of that. On what? Well, if I’m new out of school, I’m going to spend that 8% on continuing education, to go to the best courses on implants, the best courses on, on all of those things, you know, from, from, you know, doing Aesthetic Dentistry, to doing ortho to do you know, all the different things that you you want to learn to do better or that you enjoy doing. Those are the things that I would focus on, I would go to see John Kois, I would go spend the time and the revenue to go do that. Why? Because I want to learn how to do dentistry at a, at a much higher level and once I’m able to do dentistry at a higher level, I start to see more, we only see what we know and when I go to Courses, I walk out of there going wow, I never looked at that again the same way and so I would say, yeah, if you’re if you’re early out of school, you know, having revenue come in. Great and you don’t have a lot of financial backing, signing up for the PPOs is fine, but you got to have a plan to get off of those. Why? Because you can’t run your business with a 40% discount, and not make money, and not not create a life that you really want but first three, four years. Yeah, that’s fine. Now, if you’ve got eight years out of school, you’ve already had your education, everything else you put a little bit of money away, what would I do? I would 100% go for high-tech, high-touch. I would I would go to the bank, I would get the money and I would have marketing as a part of my, my business. Yes and I would be marketing a percent, just like we did at Grandbury Dental Center as we went along.

Dr. Bruce Baird 11:52
You know, doing 100,000, we had an 8000 budget 200,000, we had $16,000 marketing budget and so instead of having some marketing company, PPO, which that’s all PPO is it’s a marketing company. It’s not an insurance. So I think you’re aware of that. But no, I would, I would say take 8% of my budget, I mean, 8%, you go back and look at Granberry Dental Center’s numbers. For years, it was exactly a percent if I collected 100,000 In January, in February, I’m marketing $1,000 and as it grew, our reach grew bigger and bigger and our marketing targeted exactly what it was that we wanted to do, which for me was train wrecks, I’ve told you guys that before might be implants, might be whatever you like, you know, it could be sleep dentistry, it could be you know, you get to market and bring people into your business that need the things that you love to do. So, and PPOs, most of those people are going to be under 45 and they don’t need a lot of dentistry and so now you’re seeing a jillion of them trying to make trying to, make a buck and so the strategy is get your education, if you don’t, if you’re not been out of school for a while, and you don’t have the experience, it’s okay sign up for the PPOs but have the strategy that says I’m going to spend 8% of my budget for you know, for learning for you know, going out and, and go into the best places the courses, though, you’re the spirit gonna go out and learn and on the flip side, you feel you feel good, you know, start out with a fee for service practice, I would highly recommend it, you’re going to be so much more profitable. Plus, you’re going to enjoy your life better. You know, a lot of the associates, they’re stuck into a business that is built on this PPO model, that you got to do 60% more work than somebody who is doing a fee-for-service model and you know, you’re, you’re not making any more money. So, again, these are, you know, there’s so many different answers. There’s so many different ways of looking at this.

Dr. Bruce Baird 13:59
If you have you know, your own personal question about this, that you’re thinking about doing, send, send me send me an email to bruce@productivedentist.com I’ll be more than happy to do a podcast on it and we’ll talk about it on the podcast and I’ll send you back an email saying hey, I’m doing a podcast on it. It’s coming out here in a few weeks. So feel free to do that. I’m really looking forward to talking more about this, this process. That strategy when you have the PPOs, yes, it’s okay to have it for the first three or four years, get your education and then have a strategy to get off the PPOs you got what you do not want to do is be 15 years into dentistry, 20 years into dentistry still taking a 40% discount. That’s the number one overhead item now in dentistry. Is PPO write-offs, give me a break, you know, you know their marketing company, it’s not insurance. You know, what you want to do is market to older patients who need the dentistry that you’d love to do and anyway, hope this has been good for you again, thank you so much for voting the Productive Dentist Podcast as the number one podcast in dentistry and I look forward to our next time. Thank you for joining me for this episode of the Productive Dentist Podcast. If you found this episode helpful, make sure you subscribe, pass it along to a friend. Give us a like on iTunes and Spotify or drop me an email at podcast@productivedentist.com don’t forget to check out other podcasts from the Productive Dentist Academy of productivedentistpodcast.com Join me again next week for another episode of the Productive Dentist Podcast.