I’m often asked, “Knowing what you know now, what would you tell yourself on the day you graduated ortho? Thinking about this is a great exercise and I keep a list that I look at/update often. Most of my current knowledge stems from massive failure in the past so I thought I would share this with all of you in the hopes you can avoid the stupid mistakes I’ve made! I’m happy to discuss any of this you like so feel free to comment.
- Don’t loan any money to anyone for any reason – yeah to that best friend/family member especially.
- Don’t buy any commercial real estate because I suck at it and the opportunity cost has a terrible negative impact on the practice growth.
- Don’t own any businesses outside of Orthodontics/Dentistry .
- Learn what you can from other orthodontists but don’t inherit their limitations or that of the “collective wisdom” of the profession or high profile orthodontists hocking wares.
- Chairside employees are not skilled labor and it doesn’t matter if they need to be replaced. It is just not a big deal . Do not let your employees dictate how you run your business.
- Staff and do HR the way non-dental/non-medical businesses do. Real businesses like McDonalds or Dillard’s not mom and pop operations.
- There is no upper limit that I’ve found on the amount you can learn or the amount you can do or the quality you can deliver or the volume you can see. It took me several days to cut my first crown prep in dental school and hours to bond my first case in residency but I’m getting faster and doing more all the time while increasing the quality of the care I deliver. Quality of care and speed are not inversely related. Volume of patients and quality of care are not inversely related. Both can be but that is our doing. The first crown I cut sucked as did the bracket placement on the first bond I did even though I spent a tremendous amount of time on them! I do much more now than ever before and my quality is better than ever before.
- Don’t trust experts or anyone for that matter when it comes to your finances. Make someone prove what they have done and are doing with their own finances and for their clients and make sure you’re in the same boat playing by the same rules as they are.
- No one will “manage your portfolio for free” and anyone who claims to be doing so is lying. This is especially true if your “advisors” are friends/family.
- Have as few locations seeing patients as possible, have as few days as possible with the fewest possible doctors and staff. But have the right setup, the right staff and the right kind of day.
- Don’t hire an associate until you absolutely have to. You will work harder trying not to see patients than just doing it yourself.
- Don’t set goals because they are as much of a ceiling on what you think can do as anything.
- Don’t plan for when you’ll retire or quit seeing patients. You have to do something and Ortho is as good or better than anything I know.
- Don’t be afraid to speak up when you disagree .
- Don’t fear looking foolish, being laughed at, being in the minority or even being the only one. Like Wells said, “Being a minority of one doesn’t make you mad”. Also, don’t fear failure. Failure is not that bad and the more you fail the easier it gets. You’ll never stand out trying to be like everyone else.
- Like the song says, “It don’t mean nothing til they sign it on the dotted line.”
i wish you make a blog post of your experience from every bullet point. We almost have the same experiences and learn through mistakes
This is fantastic thank you for sharing. I wish I read this article 3 years ago!
I wish I knew this stuff 11 years ago!!
This is great advice! I’m a recent grad. Could you comment on how you would choose a location to open up a practice? Would you do any different now knowing what you know now? Thanks!
You bet!
That is a two part question. First I would go to a place that needs an orthodontist. Most residents and new grads make dumb decisions about where to go based on all the wrong reasons. Where we grew up, where we WANT to live and where all the cool people live are generally bad choices in in deterring the place where you want to live and work. This is a business decision! The old adage, “Live where you want to live and figure out how to grown your practice” is dumb and not applicable any longer. Go to a town that needs you! Service the under served.
Now once in that town you need to find a space that is extremely visible and has wonderful signage. Lease don’t buy. Find a developer to build the space out for you and fold the cost into the lease. You can write off the entire lease payment on your taxes and only the interest on a mortgage. This is very useful for cash flow.
Hope this helps. Big topic. I’ll be sure to do a couple posts on it!
I guess the other part of this question is do you buy or start from scratch? Also, what do you buy?
Buying is generally better than starting from scratch because of cash flow considerations. Of course this is assuming that you can get a deal that makes the practice purchase cash flow positive immediately if not sooner. Think about it this way, if you start from scratch you end up with a note for equipment and supplies along with paying your rent at minimum (if you take my advice from above) and more if you build. But, a cold start begins with exactly zero cash flow because you have zero patients. Furthermore, you have to do a lot of production before your collections are significant given how people pay for braces.
However if you buy a practice then you can have positive cash flow off the bat.
Traditionally we bought Ortho practices. That’s what I did out of school. These days, however, Matt Wilkins and I feel it would be best to buy a PCD practice and start Ortho out of that office because controlling your own destiny and patient base is paramount. Again I’m glad you brought these questions up and I’ll work on posts to cover them. Perhaps I’ll do a resident/recent grad series on these types of issues. Have a great week!
Thank you very much! I totally agree with you that selecting a location is a business decision. Most of us, including I, are not trained to think with a business mind. Therefore, in this changing industry, we are really prone to a lot of potential pitfalls. We could definitely use some more sincere and pragmatic advice. I look forward to your future postings!
Great points Ben! Can you expand on the “Don’t buy any commercial real estate … the opportunity cost has a terrible negative impact on the practice growth.” statement?
Sure. I am terrible at real estate. I have the anti-Midas touch in terms of real estate because everything I touch turns to Sh*t! I thought it was just me but I’ve seen time and again that most orthodontists think that owning a single purpose stand alone building is a good investment but it doesn’t work out more often than not. Maybe real estate used to be awesome but it doesn’t seem to be the case any longer. Now, I do have orthodontist friends who are very good at real estate and make it work for them but they are rare exceptions. Also, even if you are “successful” with real estate and you double the value of your building over 20 years, that’s still not a great return compared to what you can do with that cash or credit if you can expand your orthodontic practice network. You can only borrow so much and having that debt on your balance sheet can hold you back. Finally, you can deduct all of your lease payment but only the interest on a mortgage so owning is bad for cash flow – especially early on in your career. We are not experts in real estate. We are experts in teeth. The old myth that real estate will always appreciate has been disproven. Nothing that I’ve found is better than orthodontics for making a great living. Stick to what we know is all I’m advocating here.
Something to work on brother!
You’re not wrong! I think more and more orthodontists are becoming aware of the need to focus on what we do well and find experts to help us with the other stuff!
I’m getting a hard time from some colleagues on orthotown about this article. They seem to think that I don’t value employees when I say chair side is not skilled labor and that we should run our businesses like a business. Anyway, I want to be clear about the fact that we care deeply about our employees so I’ve copied and passed my response to the questions here.
Chair side assistants are not skilled labor in the way that doctors are. I love my chair side assistants, front desk people and TCs, take care of them, pay them well and have great benefits for them while providing an excellent and fun work environment but that doesn’t mean we let the tail wag the dog or let someone who is not performing put the entire practice at risk because they won’t pull their weight. I see lots of doctors who are so afraid of turnover that they allow the worst employees to dictate their course of action. Mcdonalds has great training and great systems but you can substitute any company you like if you find that comparison beneath you. I personally would love to be as successful as Mcdonalds.
Doctor, I’m glad you enjoyed most of the points in the article and I hope this helps clarify the ones you take issue with. I’m not demeaning anyone just stating a mindset that I believe would benefit most doctors. Doctors are the ones on the hook for the success or failure of their practices and they must make decisions based on what is good for good employees and their business.
Hi Ben,
Thank you in advance for opening my eyes and willing to CHANGE. I had a question about finding a developer to do the buildout and folding the cost into the lease for a start up. How do you convince the developer to take a monthly payment and to work with the individual that owns the property? Any comments will be appreciated!
So glad you enjoy the blog Greg. I’ll see if I can get our developer, Josh Brown, to get on here and give you some insight.
Greg: Nice to meet you… I would be glad to visit with you regarding your question about a developer “folding the cost into a lease.” There are too many variables without having more information to give you good guidance. Our firm acts as a developer for Ben’s company. In this role, we hear from Ben on which city they would like to open in, we analyze the market, and we identify the top retail locations within the market. We pick our favorite site, compare notes with Ben’s team and decide on a location to pursue. When that decision is made, our firm acts as a buyer for the land and we typically have a window of due diligence time. During this time, we develop a site plan, exterior renderings, complete any zoning that needs to be done, and price out the project with a preferred general contractor. When that process is complete, we develop a pro-forma and submit a Letter of Intent to Lease to Ben’s group that includes how much rent they will pay, how long the initial term will be, when the space will be delivered, and how the space will be turned over. In our case, we fund the interior buildout, which typically costs more than a normal retail tenant, but it allows the tenant to spend their cash growing their business. In all of our medical related tenants, we fund the interior buildout and include it in the lease rate. But, it helps if you have a developer familiar with, and who has a comfort level with the medical user and industry in general. The process has been oversimplified in this response, but I would be glad to discuss further if needed. — Merry Christmas
Greg: Nice to meet you… I would be glad to visit with you regarding your question about a developer “folding the cost into a lease.” There are too many variables without having more information to give you good guidance. Our firm acts as a developer for Ben’s company. In this role, we hear from Ben on which city they would like to open in, we analyze the market, and we identify the top retail locations within the market. We pick our favorite site, compare notes with Ben’s team and decide on a location to pursue. When that decision is made, our firm acts as a buyer for the land and we typically have a window of due diligence time. During this time, we develop a site plan, exterior renderings, complete any zoning that needs to be done, and price out the project with a preferred general contractor. When that process is complete, we develop a pro-forma and submit a Letter of Intent to Lease to Ben’s group that includes how much rent they will pay, how long the initial term will be, when the space will be delivered, and how the space will be turned over. In our case, we fund the interior buildout, which typically costs more than a normal retail tenant, but it allows the tenant to spend their cash growing their business. In all of our medical related tenants, we fund the interior buildout and include it in the lease rate. But, it helps if you have a developer familiar with, and who has a comfort level with the medical user and industry in general. The process has been oversimplified in this response, but I would be glad to discuss further if needed. — Merry Christmas