The average profitability range for a general dental office is around 30 to 40% of revenue, but this figure can be deceptively difficult to calculate. Many of the practice expenses shown on tax returns or P%26L returns must be adjusted to determine the true profitability of the practice. The average dental office has a 40% gross profit margin. While there are several circumstances that could affect your margins, this figure should provide you with a benchmark.
Charles Blair, DDS and John McGill, MBA, CPA, JD Dr. Blair urges all physicians to invest in the best clinical and business advice available to maximize returns. Like The Millionaire Next Door, he finds that those who are most successful have sought help from competent professionals - and implemented their advice. And that's just for practicing dentistry.
Do you know what an associate doesn't have to worry about? For now, let's go back to something I mentioned earlier, that no office owner feels underpaid. The only problem? The associate really can't do anything about it, other than looking for another office to work in. But the owner? The landlord makes all of those decisions. For many dentists, this type of control over operations and day-to-day culture in practice is worth as much or more than financial compensation.
But perhaps the most important thing is that the property, with all its freedom and responsibility, seems worthwhile to you? Does it fit the lifestyle you want? If the property is in your future, and I think it should be, make sure you find the right practice to buy and let me know when you're ready to take the plunge. I'll help you make it happen.