David | TheDSOGuy
@theDSOguy
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Regional partner in 20 location DSO. Orthodontist, former Army officer, real estate investor. Follow me as we build a doctor owned patient-centric dental group
Austin, TX
Joined July 2023
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The 5 stages of the New Patient Acquisition process
1. Lead Generation
This is all your marketing. Paid ads, SEO, community marketing, signage, Spotify.
KPI- Cost per lead
2. Scheduling
Most dental patients still call the office to schedule. But online scheduling is growing
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@ZeroBasis
If your job is fully remote…congrats. Now you’re competing with 6 billion people.
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Best investment I ever made?
Back in the day, text messages cost ten cents apiece, and I didn’t have any money.
I had just graduated college, met a cute girl at a church summer conference in Florida, and we really hit it off.
I was driving home with friends and the text
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Roast my business idea.
Buy a Ferrari
Rent it on Turo
Off shore employee to run it.
Drive said Ferrari when it’s not rented :)
What am I missing?
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@FranchiseMnA
Homeschooled K-12
Graduated summa cum laude from UGA then went on to get into the most competitive specialty in dental.
Left the Army as a Major.
Built an orthodontic practice from scratch and quickly surpassed 1 million in collections.
There’s so many resources these days
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Malcolm Gladwell talks about this phenomenon in college.
“The smarter your peers,” Gladwell writes of college science majors, “the dumber you feel; the dumber you feel, the more likely you are to drop out of science.”
Being a big fish in a little pond can often be very
Find a room where you’re the smartest person.
A gym where you’re the fittest.
A pond where you’re the biggest fish.
Confidence is everything. It’s easy to get discouraged when you’re comparing yourself to the best.
Low self esteem holds people back far more than talent.
Get
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Dental practices rarely fail, but I heard a story about one today.
An orthodontist bought a small 3 chair GP practice from an older retiring dentist for just 70k.
The practice was in steep decline, no web presence, dwindling patient base.
Imagine endless fax machines.
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I ran into someone pitching an interesting concept.
They partner with your dental practice 50/50 and build a strip center.
You anchor the strip center and pay rent to the partnership (that you own 50 % of)
Said they typically build and hold long term.
No down payment
They
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So, how much does it actually cost to buildout a dental office?
Here are some numbers from a buildout we did in 2021. Keep in mind that costs have risen a good bit since then.
4,000 sq ft, 13 ops, 7 chairs installed.
$346,000 General contractor (gut demo, plumbing, walls,
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@buddy7
We built a four drum raft in college and huck Finn floated the ocmugee river in Georgia.
Only problem was a tornado had gone through the area a few years ago and there were a ton of trees in the river that kept stopping us.
We ended up having to hike out and hitchhike back to
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If you spent money texting your future spouse, talked to them using free nights and weekend cell phone minutes, or survived drinking water from the garden hose, then I’d appreciate a like, comment, or follow.
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A Day in the Life of an Orthodontist
I decided I was going to post my schedule from today. Trying to keep it real with ya'll!
5:45 wake up, pre-workout on the way to the gym (8 mg citrulline, 200 mg caffeine, 5 mg creatine, beta alanine, electrolytes)
6:00-7:15 Push day-45
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The FTC just banned non competes.
Obviously this is a net benefit to associates and a net negative to owners.
My assessment is that this will have larger unintended negative consequences than benefits.
What do y’all think?
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How to own a $2 million dental practice by the time you’re 25
-Mindfulness each morning
-graduate dental school
-cold plunges
-skip 2nd grade
-buy into your Dad’s $4 million practice
Any other ways?
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@gvh41
If they’re quoting ebitda at 500k, I’m guessing they’re saying you could hire an associate for 200-250k and the practices is at 50-55% OH.
That’s a solid ortho practice but nothing special.
Heavy Invisalign is great.
At this size, practices often sell more on a percent of
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@CoFoundersNik
To someone who grew up in typical jobs, the idea of being able to voluntarily earn more money is mind blowing. Most people are locked into a salary.
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@krnshh1990
@AustinScholar
I was homeschooled growing up. Homeschooling is fairly mainstream now, but back then it was “weird.”
It’s definitely more efficient. We were usually done by 12 or 1 and crushed any standardized test we took.
There are so many resources now to help families make it a success.
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Secret weapon in business?
Grey hair!
I’m in my late 30s but grew some serious grey hair in the last couple of years.
Probably stress from 4 kids and building a business!
But man does some grey hair sell braces to soccer moms or earn you respect from potential business
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@SMB_Attorney
I’m seeing lots of good posts.
One addition. Most of these foods shouldn’t even be in your house.
Don’t buy them at the store.
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@KrissBergTweets
If you lose baby teeth early due to decay, you can lose a lot of space for the permanent teeth to erupt.
That can lead to a difficult orthodontic situation.
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How I graduated Orthodontic residency with $0 in student loans.
That’s right nada, zilch, zero.
We didn’t have much money growing up so I was fairly debt averse.
I attended the University of Georgia for undergraduate. Georgia has a lottery funded scholarship for college
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So, how much does it actually cost to buildout a dental office?
Here are some numbers from a buildout we did in 2021. Keep in mind that costs have risen a good bit since then.
4,000 sq ft, 13 ops, 7 chairs installed.
$346,000 General contractor (gut demo, plumbing, walls,
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If you're an associate dentist, you need a MASSIVE sense of urgency to increase your business skills.
Ask questions about every aspect of the practice you work in, listen to podcasts, read books, find a mentor, develop clinical skills in high value procedures, start building
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Smile Doctors is the largest and fastest growing orthodontic only DSO.
Scott Law started the company with a couple of partners and $4 million in the bank in 2015.
This is how they grew the company to 2.5 billion.
They started by spending almost the entire $4 million
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How to Start-up a Dental Practice
I'm a partner in a group that has started 20 de novo dental practices. Here's some of the lessons we've learned over the years.
List is geared towards an associate making the transition to owning.
1. Make a plan for cash flow during the
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My last post generated some traction.
Allow me to reintroduce myself. I’m an orthodontist. I spent 7 years in the army as a dentist. I’m a partner in a small but growing DSO.
Some of you may be wondering why TheDSOGuy is being critical of a practice sale to private equity.
I
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I try to stick to mostly business stuff on here but had a clinical win that made me so happy today.
One of my son’s best friends had seen another orthodontist who recommended a surgery for his lower impacted canine.
I saw him for a second opinion.
Instead of going straight
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Say it with me.
The best way to reduce your dental practices overhead is to increase collections.
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@mhp_guy
At that age I think you just have to admire the creativity and move on :).
Kid has potential!
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Current dental market consolidation update
70-75% of practices are 1 location, private practices
12-18% are mid market DSOs with 2-25 locations
12-17% are large DSOs with 25+ locations.
GP is currently more consolidated than specialty practices, but specialty practices are
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Not gonna lie. A lot of orthodontists in this category.
Just chilling, making 1 milly in profit a year on 3 days a week of work.
You don’t always have to conquer the world.
Lifestyle business owners don't get enough love on here.
Sometimes I think the people that have a small business pulling down 200K-1M annually, working 10-20 hours a week, no plans to sell, no plans to do acquisitions, might actually be the ones with it all figured out.
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So, you're in a "dental adjacent" industry.
Maybe you have some dentists as clients.
What are some pain points in dental? Solve or reduce them and your business grows.
Insurance: Massive headache for dentists. In the past, many dentists were able to train and retain a
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Some of you may be wondering.
What the heck is a DSO?
A DSO is a dental support organization.
Many DSOs are owned by private equity. There’s nothing inherently wrong with private equity, but some of these companies are doing lousy patient care just trying to squeeze out
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In 1999, Orthodontic Centers of America was the 800 pound gorilla in the room with 537 practices!
They had filed for Chapter 11 bankruptcy just 7 years later.
Here's the story of Gasper Lazzara and OCA's meteoric rise and fall. 🚀🚀
It all started in 1980 with $1 million in
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Want to know if interest rates are impacting highly levered PE backed DSOs?
Specialty Dental Brands went through a round of transactions with PE in September of 2022.
The Oregon Health Care Authority just announced that the PE funds had defaulted on their loans and the entire
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@InvestingDDS
I agree with you that you should move to passive index funds.
Devils advocate: Any fund that is diversified will have underperformed the S&P 500 lately.
International exposure has been brutal for returns.
No guarantees the sp500 keeps on crushing it
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Lots of new followers after Nik's podcast, so allow me to re-introduce myself.
I'm your friendly neighborhood orthodontist working to build an amazing group of dental practices.
DSOs (dental service organizations) get a bad rap sometimes because some PE backed groups have
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@ashish_patel83
@sweatystartup
Primary care doctors spend much of their time trying to get unhealthy, sick people back to baseline within the confines of what insurance will allow.
They don’t have the time to put much effort into each patient because they can’t charge for it.
A concierge, longevity doctor
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I need a recommendation.
Friend of a friend needs a good branding campaign.
Who’s got the goods?
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Smile Doctors is the largest and fastest growing orthodontic only DSO.
Scott Law tells the story of how he partnered with Greg Goggans and Dana Fender to start the organization in 2015.
At that point, he had saved up 4 million dollars in his practice.
They hired Scotte
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Here’s my thoughts.
OMS-highest income potential, brutal residency
Ortho-2nd highest income potential. If you’re in a big city you have to be laser focused on the business. Ortho is very saturated. It can take a long time to build a strong practice too.
Endo-consistently high
@theDSOguy
Hey
@theDSOguy
- A little off topic, but what's the ROI like on various dental specailties? My wife has the grades and letters of rec to specialize. Shes thinking Perio or Prosth. We're in our 30's and the idea of more school doesn't sound great since we're starting a family, but
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Met with a highly successful orthodontist today. He built a large multi-location orthodontic practice.
He sold his practice about 3 years ago to a private equity backed orthodontic roll up group.
He made millions from the deal, but he now says if he had it to do over again he
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Many dentists assume that if they do good clinical work their practice will thrive.
In reality, your interpersonal skills with patients and staff and your business skills will have a much greater impact.
This is true for most SMBs.
Your technical skills need to be excellent,
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Finding good dental assistants is critical for practice growth.
I've trained all my orthodontic assistants from scratch.
Here's how I do it 👇
1. Keep it really simple. I ruthlessly culled my orthodontic techniques, inventory and systems to make treatment simple so my
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I had the pleasure of sitting down with
@CoFoundersNik
for a great podcast.
Nik is breaking down lots of different businesses.
-How they make money
-How they grow
-What is their business model
Nik shares how he almost started a DSO himself and what kept him from heading down
Wrap Up
If you're curious about DSOs, I recently sat down with
@theDSOguy
to discuss the $70M DSO that he's a part of building
He discusses:
- Benefits of a DSO
- Why they are Doctor Owned
- How much HIS $3.5M clinic nets
- Marketing strategies
Check out the episode below👇
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I’m really hoping to up our checklist game over the next year.
Here’s a checklist I use for onboarding front desk staff.
You can move the drop downs from “not started” to “in training” to “approved”
Should I break it into a 30/60/90?
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Did you know that dentists have the highest suicide rate of any occupation?
Every person at a cocktail party knows that.
But it's not true.
What is true is that dentistry can be a hard profession at times. Student loans, anxious patients, insurance companies, back pain, and
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What they see: 3 day clinic schedule
Reality: Working nights and weekend on admin
What they see: Good test scores
Reality: 80 hours a week studying for boards
What they see: Beautiful dental clinic
Reality: $1M practice loan with personal guarantee
What they see: Fit body
My employee told me I shouldn’t make more money than him.
Him:
“I don’t know why you make more than me, I should have a business like yours!”
Me:
“Oh, it's easy! You just need to do 500 flights”
He was confused
Him:
“I don’t get it”
Me:
“And that’s why you shouldn’t have
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Dentists typically graduate with significant student loan debt.
250k-500k is super common even all the way up to a million.
All that student loan debt seems to be contributing to young dentists seeking out well compensated associate jobs instead of looking to purchase or
5
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Current dental market consolidation update
70-75% of practices are 1 location, private practices
12-18% are mid market DSOs with 2-25 locations
12-17% are large DSOs with 25+ locations.
GP is currently more consolidated than specialty practices, but specialty practices are
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TheDSOguy approves this message!
I believe every person should get braces if they can afford it.
No brainer way to improve appearance for a few thousand dollars.
Parents, do this for your kids before sending them off to college!
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@BowTiedGatorDDS
I worked in a pediatric practice for a couple of years and did a lot of Phase 1 treatment.
We saw a lot of kids with the domino sequence you describe.
Allergies and enlarged tonsils. Mouth breathing, snoring, grinding.
Sometimes Open bite, but not always, and moderate to
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When DSOs buy dental practices, what do those deals look like?
Deals vary considerably, but here’s an example.
Practice: EBITDA $825k on 3.5 MM in revenue
Valuation at 8X multiple: $6.6 MM
Allocation: 70% cash ($4.62 MM) and 30% stock ($1.98 MM)
Stock can be a wild card.
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Current dental market consolidation update
70-75% of practices are 1 location, private practices
12-18% are mid market DSOs with 2-25 locations
12-17% are large DSOs with 25+ locations.
GP is currently more consolidated than specialty practices, but specialty practices are
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Smile direct club, valued at $8.9 billion just 4 years ago, is declaring bankruptcy and shutting down.
They were trying to fill an important market niche (affordable treatment for mild orthodontic problems).
Ultimately, they failed due to a few factors
1. Underestimated how
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@FranchiseMnA
Hope throwing the resume up there wasn’t too cringe haha
I really enjoyed being homeschooled and I think it prepared me well to be a life long learner.
I don’t think homeschooling is for everyone, but it’s super easy to find plenty of great social outlets. Sports, church,
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@SMBTelecomGuy
This is why I posted this.
I figured some genius like
@SMBTelecomGuy
would crunch the numbers for me.
Give him a follow!
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@realest49919420
If they bought in 2022 in Austin, they’re probably underwater or barely ahead on their mortgage despite their down payment
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I went to dental school in Augusta.
My first year I lived in a townhome. The back fence was the fence of the Masters.
I always imagined that if I tried to hop the fence and go for a joy run around the golf course I’d get shot in the head by a sniper.
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As we scale our dental practices, a major focus is standardizing our technology and software. Here’s our current line up.
Practice Management: Open Dental
Patient communication:Flex
Merchant Processor:Moolah/Crown
CRM: GoHighLevel
Phones: Vonage
Email: Google Business suite
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Did you know that dentists have the highest suicide rate of any occupation?
Every person at a cocktail party knows that. But it's not true.
What is true is that dentistry can be a hard profession at times. Student loans, anxious patients, insurance companies, back pain,
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Early in your business career that “stress” you’re feeling isn’t stress.
It’s fear.
Overcoming fear leads to courage.
Embrace that discomfort and you’ll get stronger.
The stress you feel from operating a business is making you tougher.
It’s not a bad feeling that needs to go away. It’s growth.
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Sooo… I turned 37 today.
I got a ninja creami from the fam.
I’m about to get so swole on all the protein ice cream I make.
If you want to wish me a happy birthday, like, comment, follow.
More importantly, refer me a GP who wants to partner in our next location in Austin.
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Lots of dentists want to start their own practice but don’t even know where to get started.
A great initial person to talk to is a dental specific real estate agent.
It’s also often worth hiring a startup consultant. You can roll that cost into your loan and it’s often worth
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Keep your long term plans in mind as you start your first dental practice.
If you plan a traditional, single location dental office you might want to:
-make sure you own the location
-open in a growing area
-use your name in the practice name
If you plan multiple locations,
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Dental startup loans 101
-Keep your build costs in check and the bank will cover 100% plus some working capital
-Banks usually structure these during the build phase like a line of credit. You only draw on the loan as you incur expenses.
-It’s better to ask for more than you
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How I Became an Orthodontist
The story starts when I was about 16, mowing lawns in the Georgia heat, trying to decide what I wanted to do with my life. I operated the family mowing business (about 70 customers).
I had braces when I was younger and thought "that orthodontics
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@sweatystartup
Plenty of market inefficiencies in real estate and if you know your local market well you can judge location and value
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NO SHOWS
The latest dental industry reports say they’ve been on the rise lately for new patient exams.
What do you do at your practice to reduce no shows?
Who is charging a deposit prior to booking?
Our strategy
-Confirm appts with automated texts. NP receive a
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Dentists typically graduate with significant student loan debt.
250k-500k is super common even all the way up to a million.
All that student loan debt seems to be contributing to young dentists seeking out well compensated associate jobs instead of looking to purchase or
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I experienced this personally.
I went to UGA instead of an Ivy League school.
I built a ton of confidence and graduated with great grades.
Really gave me a lot of momentum that carried through dental school and my career.
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Picking the right amount of square footage for your dental startup is a balancing act.
On one hand, surviving the initial cash crunch of the first 1-2 years is much easier with cheaper rent and less buildout costs from a smaller space.
On the other hand, if you outgrow your
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@mhp_guy
Dentist here. A few thoughts.
Most dentists with the drive to get accepted into dental school and finish would be successful in many other fields.
Other pathways probably have a larger variation in success. Some people would probably do a lot better in other fields, some would
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I usually try to avoid politics on X cause they’re too divisive.
But I came across these heartwarming pics of political unity. Things are looking up!
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So, you're in a "dental adjacent" industry.
Maybe you have some dentists as clients.
What are some pain points in dental? Solve or reduce them and your business grows.
Insurance: Massive headache for dentists. In the past, many dentists were able to train and retain a
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Marketing update:
Last year, I was primarily advertising on Tik Tok and Google PPC.
Since the summer, I’ve been hitting Tik Tok, Meta, YouTube shorts, and Google PPC.
Absolutely crushing last September in production.
I think as long as you have the budget it’s nice to hit
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When I was an associate doctor I would often be bored during the day.
Too much free time during the day.
Now I’m always busy and engaged. Sometimes there is a lot of pressure, but it beats being bored.
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We started advertising on Tik Tok back in March of this year.
We’ve been spending between $25-40 per lead.
Here’s what we’ve learned:
Orthodontics/Braces has much better conversion than dental focused ads.
You must consistently produce new ad creatives. Each video gradually
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Increasing your revenue is the most important way to improve your overhead.
But, every dental practice should be watching expenses closely.
Here’s a sample P&L for a traditional orthodontic practice ⬇️
Payroll/Staff. 24%
Clinical supplies 9%
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The basic problem with Smile Direct Club is their product didn’t work very well.
Clear aligner treatment can be challenging even for highly trained orthodontists.
Add on to that patients who sustained irreversible damage from tooth movement with untreated gum disease or
The Smile Direct Story is just nuts.
Raised over $1B
Valuation peaked at $9B
Founders are now billionaires
NEVER made a profit.
Lost more than $900M in operation
Stock never traded above IPO price for a single day.
Had $5M on had when filing for bankruptcy
More than
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Dental startup loans 101
-Keep your build costs in check and the bank will cover 100% plus some working capital
-Banks usually structure these during the build phase like a line of credit. You only draw on the loan as you incur expenses.
-It’s better to ask for more than
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All your dreams and goals have a price.
Find out the cost and then decide if you're willing to pay it.
I had a dream of owning an orthodontic practice.
What did I pay?
-11 years of college
-Joined the Army for 7 years to avoid student loans
-Worked an associate
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@girdley
25 and broke and it’s not even a hard decision.
I was a dirt poor dental student at 25 and loving life
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Some of you may be wondering what the heck a DSO is.
A DSO is a dental service (or support) organization.
Many DSOs are owned by private equity. There’s nothing inherently wrong with private equity, but some of these companies are doing lousy patient care just trying to
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If you’re building a dental practice with the goal of selling to a DSO, build what they want!
-Bigger clinic, lots of ops
-implants and orthodontics already added
-Associate doctor stabilized or seller staying on
-healthy EBITDA
-good mix of FFS and PPO
Did I miss anything?
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@mhp_guy
Chris, one reason for this is the amount of free market competition in dentistry.
Sure we have to deal with some crazy health insurance companies.
But by and large, dentists have been free to innovate, compete, and strive to build businesses that offer the best possible care
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The current labor market is driving dental practices to innovate.
Back in the day, most practices would have an insurance coordinator who handled all the insurance and billing needs.
Many of these employees worked for the same dentist for 10+ years and you didn’t have to worry
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@Molson_Hart
Don’t get sucked into this fear of your kids not eating.
Just provide healthy foods and no alternatives and kids will eat on their own.
Only modern parents make it complicated.
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If you can keep your lifestyle in check as your business grows, your living expenses become just another fixed expense that your revenue outgrows.
All of a sudden, your free cash flow becomes large enough that you can invest and compound your money in your own business, other
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Should you pay off your student loans before starting up a dental practice?
This one has way too many layers to give a simple answer. But let me give you some principles that I believe in. This is not financial advice.
1. Get to equity as fast as you can. The sooner you own
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The current labor market is driving dental practices to innovate.
Back in the day, most practices would have an insurance coordinator who handled all your insurance and billing needs.
Many of these employees worked for the same dentist for 10+ years and you didn’t have to worry
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Owning a practice partially involves trying to balance the ups and downs emotionally and mentally.
We set monthly records for production and collections today.
And I have a key employee super close to quitting.
Gotta keep an even keel.
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@GabrielKohenCPA
The next gen remote work class is about to find out they’re competing with 6 billion people if their work is fully remote.
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My digital marketing manager is a full time employee in Pakistan. He is beyond awesome.
He’s getting married soon and trying to save up for things.
Bad luck! His nephew spilled juice on his laptop and fried it.
Should I:
-Buy him a new laptop?
-Contribute some to a new
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