Good comments. Thank you.
Associate vs ownership - let's break it down.
First, let's talk about ownership. There's the obvious: you OWN it. Owning means you had to buy something. Either you bought an existing practice or you bought a building and you bought all the stuff inside. Either way, it is expensive. Less expensive practices can be bought at the tune of $200,000 and can go up from there.
If you want to open up your own place, we are talking about renting or buying a place and then building it out (3 years ago price, that would have been about $175 a square foot). So if you want to build out a building that is 2,000 square feet, that is $350,000 before you see your first patient.
Chump change, you say. That is about $3,500 a month for a long time. I pay the bank about $3,200 a month for half of our practice and that is after taxes. So you own it, but it is going to cost you.
You call it a business expense, but when your office can't cover your business expenses, guess who bails out the office? You guessed it - the owner.
Being an owner, you learn about things you never knew existed (like employee tax). You learn how much having an employee really costs you. With taxes and insurance, that $18/hour employee costs you a lot more.
You learn things like triple net lease and depreciation. You know how much your supply company charges for equipment repair. You know exactly how many handpieces you have. You see everyone standing around and you start counting up how many dollars an hour you are paying them to have a conversation. You learn how much tree-trimming and new plants cost.
I called my advisor today to ask him who is responsible if I have a tree hanging over my neighbor's parking lot and a branch falls on a car in their lot. You learn how much property insurance costs. You learn how to handle a situation when someone slips in your parking lot. You become well-versed in how to handle people soliciting to you on a daily basis.
I know about how to run a staff meeting. I know now how to give a performance review and I know how it is never easy when there is crying involved. I know how to ask people into my office to talk to them about bad attitudes.
But owning also has its upside. You can't get fired. And there is, as Tom says, "autonomy." And I think with us owners, this is what it is really about - doing it our way. Dentists don't really play well with others. We are a fickle bunch.
As owners, we can buy the stuff we want. We have the color carpet that we like. We hire who we want. We can walk around the exhibit hall and say, "Hell yeah, I am the guy who buys stuff in my office."
When things go well, it is really fun. When everyone is working well together, when your patients are happy, there is no better feeling. People like you, your staff likes you and it is really good. And then one day, a long time after you open, you start to profit. When the bank account has money left over after you have paid all the bills, you get it.
Now, the smart owner would put this money away for the down times, to have a reserve fund (and hope to never use it). But if you have a reserve fund and you continue to profit, you get it.
But being an associate has a lot of things that most dentists desire. I think most dentists would prefer the tooth stuff to the business part of dentistry. I mean, why do you think a lot of dentists are selling their practices to corporations? They want someone to run the practice and let them do the teeth stuff. Associates get to do dentistry and not have to deal with the "other" stuff. Like our ghost writer said, he gets to go home and not think about the office. On the other hand, you can get canned and you can't always do it the way you want.
One thing that our ghost writer spoke of and our commenter Tom talked about is family. The ghost writer appears to not have a family; if you are a reader of the blog you have to know that family takes a lot of energy. And I have to admit that this does take away from my ability to totally focus on the practice. It may be a little easier to handle if I was single. And I do spend about 2-3 hours a week on a blog. A guy like me wears a lot of hats.
Okay, my fingers are tired. Did I miss anything?
Have a great weekend.
Gators vs Kentucky tomorrow - and the Cats haven't lost at home in 32 games.