Many dental practices have poor overhead, but that's not all on the dentists themselves. Practices cost a lot to start, and with dentistry becoming more and more expensive, once you get off to a bad start, it can be hard to rein overhead back in.
A recent Inc. article stated dentistry as a whole is one of the five most expensive types of startup companies in the United States. But if you can make it work, a dental enterprise can also become the sixth most profitable, according to Entrepreneur.
One major barrier to building a profitable practice and, for that matter, a dream retirement is overhead. Controlling it has gotten harder and harder thanks to the additional writeoffs with PPOs and insurance companies. We find, though, that if overhead isn’t corrected early on in the dentist’s career, they will carry that overhead with them until the end.
So let's try to de-fang the overhead monster by looking at a real-world scenario: If we find a dentist that is 37 years old and has 75% overhead. More than likely they’re going to be running 70% to 75% overhead when they’re 55. If that dentist wants to become financially free in the next 5 or 10 years, 75% overhead is devouring your ability to live in the present and keep adding to that savings for retirement.
A great overhead percentage in general dentistry should be under 60% because you'll always have to buy more equipment, reinvest in the practice, and pay for space. If the dentist is not debt free 8-10 years before retirement, they will have a very difficult saving and creating a practice that looks good for purchase. Why? Because any practice that is debt-laden is a practice that nobody else wants to buy - at least for the price you were hoping for.
We developed the infographic below to peer into the common causes of high overhead that virtually all dentists face.
If you collect at least $750,000 annually, you may be in the perfect position to take your practice to the next level. LET'S TALK TODAY! Fill out the form at the very bottom of this page or contact Casey Hiers at 765-532-5562or via e-mail.