Being a dentist is more than just looking at teeth or doing procedures. Any dentist who owns their own practice knows that. You are in charge of managing staff, payroll, orders, equipment, even in some cases advertising. Here are some things to consider for aspiring dentists.
1. Business Classes
Knowing how to properly perform complex dental procedures is a requirement to be a licensed dentist, but how well prepared are you to handle the business side of dentistry? Upon graduation, you quickly discover that in addition to clinical knowledge, there is a huge entrepreneurial component to practicing dentistry. You must market yourself, your skills, and your office. If you own your own practice, you will be responsible for payroll, hiring, firing, and making sure you are attracting enough patients and generating a sustainable income. Having knowledge of business, invoice factoring, and product management will be essential in transforming your practice into an efficient business.
2. Financial Studies
One of the main actions dentists recommend for managing a practice’s finances is hiring a financial expert, preferably one with specific dental practice expertise. Most dentists are not financial experts — so how can you be expected to know how to manage your money in the most efficient way possible? Hiring an expert such as a certified public accountant is especially important come tax time. Here’s what a couple seasoned dentists told us about hiring an expert: One word of warning here is that the financial expert you hire should not be your buddy, as this can compromise the quality of their advice. Learning how to financially run your practice is a key step in becoming a dentist.
3.Real Estate Knowledge
Let’s use an established dental practice that grosses $400,000 per year as an example. Most dentists manage to pay off their set-up or purchase loans and equipment leases within eight years of start up. For this calculation, the total time in ownership is 28 years, and I assumed that operating expenses (true overhead) are 60 per cent of gross, and the owner draws 30 percent of annual gross ($120,000 per year) in salary. After the debt is retired, the annual profit is 10 percent of gross income, or about $40,000 per year, for a term of 20 years. For comparison, it requires about $800,000 in cash investments to generate $40,000 per year in pre-tax profits, at a five per cent rate of return.
Dental school is important for any future dentist but there is more to learn. Being a dentist is more than meets the eye. It can be more than providing dental surgeries or check ups. It is equal part being a dentist as it can be an equal part businessman. Studying these three aspects can upgrade your dental office from a dental office to a business.