Omni Practice Group is a Platinum Sponsor of PNDC 2024. Visit them at Booth #613.
Do Not Wait to Buy a Practice
By Rod Johnston, MBA, CMA
In the world of dentistry, the allure of waiting for the perfect opportunity can often lead to missed chances and delayed success. Dentists, like many professionals, may find themselves holding out for the ideal practice—whether it's one with the perfect location, specific amenities like four operatories, or impressive revenue numbers. However, this waiting game comes at a cost.
For every year spent waiting to begin owning a practice, there is a potential year added to the end of one's career when retirement should be on the horizon. Yet, the advantages of practice ownership are substantial. On average, practice owners earn 20% to 40% more than associates, building equity in their practices along the way. This equity becomes particularly valuable upon selling the practice, providing a significant sum for retirement.
Consider the financial impact: an average associate making $185,000 per year could potentially earn an additional $55,500 annually as a practice owner. Over a 20-year career, this could amount to $1,110,000 more than an associate who never takes the leap into ownership. This additional income is on top of the equity gained from the practice's sale, which could total $1,910,000 more than the associate counterpart.
Even with student loan debt, practice ownership can be financially advantageous. Higher earnings as an owner mean faster repayment of debts. Banks are still eager to lend to dentists for practice acquisitions, with a remarkably low failure rate of less than .03%. In fact, dentists have a lower failure rate than most businesses, second only to mortuaries.
The message is clear: waiting for the "perfect" opportunity can lead to missed financial gains and prolonged debt. The benefits of practice ownership—higher earnings, equity building, and long-term stability—often outweigh the risks.
Omni Practice Group is a Platinum Sponsor of PNDC 2024. Visit them at Booth #613.