Welcome to Dental Unscripted

Welcome to Dental Unscripted, a podcast brand that meets doctors wherever they are at in their professional journey. We talk about starting a practice, buying a practice, and running a practice. We cover a lot of ground on this channel!

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Dental Unscripted

Every Year You Collect a Paycheck as an Associate it Costs You Practice Equity

Thirty percent of production is all you keep as an associate, and that number never really grows unless you produce more in an office. Owners who run even a moderately efficient practice will capture an additional 10 to 20 percent in profit on top of their compensation. They're also building equity in an asset that sells for hundreds of thousands if not more at retirement. Every year you wait on ownership, that wealth gap compounds. This episode breakdown comes from a Dental Unscripted conversation between Next Level Consultants co-founders Michael Dinsio and Paula Quinn.

1. Loan Payments Build Equity You'll Never See on a Paycheck

Even if your startup only breaks even after paying you 30 percent of production, every loan payment increases your equity in the business. That equity sits like an investment account you cash out when you sell. Paula Quinn owned a practice for three years and the equity from her practice sale alone catapulted her retirement savings back on track. She carried the loan, and even paid a dentist 30% of production, and she still came out ahead because of that sweat equity you build up owning a practice.

2. Wrong Location Selection Costs More Than You Want to Admit

Five Next Level Consultants startup clients hit a million dollars in their first year. Every one of them picked a growing market with limited competition, instead of chasing an oversaturated metropolitan area everyone wants to be in right now. If you look for markets expanding 10 to 15 percent year over year with fewer providers you already have patients waiting for you to open the doors. Scottsdale, Bellevue, Sunnyvale. Those zip codes are tapped out. The opportunity for those areas was 50 years ago. So the cost of picking the comfortable location over the smart one is the key difference between a million-dollar first year and a slower grind to break even.

3. $30,000 First-Year Marketing Is the Average

The average dental startup spends about $30,000 on first-year marketing. One Next Level Consultants client in Colorado spent $10,000 per month and was pulling in 120 new patients monthly. He said the DSO he worked for did it so he was going to do it! His practice crossed a million in year-one collections. Another startup in Arizona dropped $65,000 with zero tracking and nearly went bankrupt. The budget was not the difference. Tracking was, and not spending on what doesn't work.

• Spend big in year one while you are buying patients and exposure.

• Track every channel monthly and cut what is not converting.

• Reinvest your associate income into marketing instead of upgrading construction finishes.

4. Quitting Your Associate Job Too Soon is a Double Hit

Next Level Consultants clients typically break even between 4 and 6 months in their start ups. The industry average runs 6 to 8. But breaking even is not the signal to quit your associate gig. Collections with only two startup days (many times) matches three startup days. This is simply because the schedule is just not full yet. So what you end up doing is paying staff for that extra day, collecting the same amount as. two days, AND you loose out on the associate pay that day. That's a double hit that directly delays your growth.

5. Start Investing Before You Feel Ready

If you get into ownership at 35 or so, and you start putting $1,000 a month into a retirement find before paying yourself anything extra, compounding interest does all the heavy lifting by the time you're ready to exit. So yeah paying yourself first 'again' first going into business for yourself and second to build that investment fund. Once you break even at that startup, drop the associate pay into an investment. The cost of waiting until you feel "comfortable" is the biggest cost hidden number in the entire ownership conversation.

Behind every strategy there's a startup methodology we have refined across more than 400 dental startups nationwide. Michael Dinsio and Paula Quinn built Next Level Consultants to walk you through every phase of your launch. Connect with the Next Level Consultants team to get started.