As with most things in life, there are advantages and disadvantages to being a dental practice owner. The good news is that today the advantages far outweigh the disadvantages even in a COVID-19 world. When you are an associate dentist, you have the significant advantage of not only learning more about how to operate a dental practice from your employer but you also get to learn what you don’t want to do in your practice as you have a first-hand view of how the dental practice is run. You begin the vital steps of learning how to be a boss, how to be an entrepreneur, and most importantly how to interact with patients.
Being an associate is an important stepping-stone for those who want to reach financial independence by creating a stable income stream to address school loan debt and other financial obligations.
While being an associate works well when you are just starting out and we recommend you spend at least two years as an associate, it may not be what you want to do on a long-term basis. Creating your own practice that works well for your unique wants and needs is high on the list of priorities for many dental professionals.
If you are considering making this leap, you may wonder what the true benefits of owning your own practice may be compared to continuing to work as an associate. This article will summarize some of these benefits.
You Become in Charge of Your Own Practice and Schedule
Perhaps the biggest potential benefit of making the transition to owning your own practice, whether you are developing a solo practice or partnership, or buying a dental practice, is that you have the flexibility to create your business how you want it to be run. You have control of your own destiny. You can make your own hours, see the type of patients that you want to see, use the materials and methods that you want, and, ultimately, develop a practice that fits your needs and wants.
As an associate, you always run the risk of being terminated at a moment’s notice, unless you have an employment contract that states otherwise. In fact, you may also be subject to a non-compete clause as part of your employment. That often means that you are limited in where or how you can work if you are terminated.
Your Earning Potential is Virtually Limitless
As a business owner, you are limited only by how hard you work. Many dental associates deal with the long hours, stressful demands, and complicated billing and insurance requirements based on a set salary. There is little motivation to work those extra hours when you know that your income will remain stagnant, with the exception of a potential annual raise or small bonus.
If you do not have a clear path to ownership or partnership now, there comes a point when your hard work seems to be unrecognized, and you begin looking for other options.
As a business owner, you build wealth, not only by receiving direct fees from your clients but also by creating an asset that you can sell when you are ready to retire. By creating and cultivating a practice you love, you can meet your professional and personal goals much faster—and on your terms.
Practice owners do not automatically earn more than associates, but most will. The majority of dental practice owners will have a higher income compared to working for someone else. Of course, it takes drive and a willingness to put in the work to become successful in any business venture.
Practice Owners Often See an Increase in Job Satisfaction
As a practice owner, you can literally create a practice that reflects you and your values. While those who purchase a dental practice may have some immediate limitations in this area, over time, even those purchased practices can morph into an extension of you.
Those who have control of their practice, their hours, their hiring, etc. are, on balance, happier than their associate counterparts in terms of overall job satisfaction. You can create a lifestyle that fits your needs.
For example, you can develop a part-time practice if you wish. You can choose to only do certain types of treatments. You can design your office, hire the people you want to hire, and schedule appointments whenever you see fit. You can also develop your practice near wherever you and your family want to live. With that kind of control, it is easy to see why practice owners are happier compared to associates.
You Can Take Advantage of Tax Benefits
As a business owner, your expenses are tax-deductible, or you can use depreciation of assets to offset your tax obligations. Some of the common expenses that are deductible as a business owner include:
Once you purchase assets for your business, you can also depreciate those over periods of several years.
Investing in Yourself
It is no secret that practice owners are taking a risk. They are betting on themselves. They wager their time, energy, and resources that they will be able to make a dental practice successful enough that they can make a steady income and eventually sell the asset.
When you purchase or build your own practice, you develop skills to run the practice, such as business acumen, practice management, and financing skills. You are forced to grow as a person and as an entrepreneur to make your bottom-line work.
Although it is a risk, it is often one that you can control as working hard will generally equal success. That prospect is both exciting and somewhat frightening, but you can take this leap. You are the driving factor, and if you are already considering this type of transition, you already know you are a safe bet.
In general, there are three paths toward dental practice ownership.
Each of these dental practice ownership paths has its own unique advantages and drawbacks. For example, developing a dental practice as an entrepreneur from the ground up may be the most challenging avenue. Still, it also gives you the most freedom to create your own unique practice, particularly compared to purchasing a dental practice from a third-party.
You can also buy into a dental partnership, or you can develop that partnership with other dentists from the ground up, as well. Buying into a business is perhaps the path with the least risk, but you may not get a lot of the freedoms that come with owning your own dental practice outright.