In the past few weeks, since January, I have talked personally to a few doctors who have been turned down by DSOs because they were making too much money. Too profitable for any one doctor to be able to reliably replace them and sustain their practice levels of success.
They, the owner doctor, had become too valuable.
That’s, as the saying goes, ‘a good problem to have’ and it’s the problem I intend to create for every doctor I ever meet.
Your business is so successful that you can practice on your own terms. Not chasing money… chasing your passion. Not making a living… living a life.
This happens again and again because what DSOs and corporations want are cookie cutter, one-size fits all, replaceable (replicate-able) doctors in a practice they can ‘manage by numbers’ and minimize (not maximize) the people. A practice that matches their plug-and-play solutions of protocols, systems, and margins for an attempt to commoditize dentistry.
Oh, this is great if you are buying a franchise as an investment where any random person can fill each role. However, it’s no good if you want to be unique, premium priced, profitable, and able to leverage your time to work less and live more without making less and doing more.
Your objective in business is elevating your value.
To become so valuable that you set the all the terms and make up all the rules.
That was the point of your Weekly Report last week. Don’t play the game; be the game.
You broke the mold. You are unlike anyone else. Your personality, passion, philosophy are unique.
The basic principles of success are the same, the pillars of an extraordinary practice are the same; but the doctor is the difference. The leader is the leverage.
Don’t get me wrong, you can have associates or even build a buyer or path to partnership for your future. You can do a lot of things… but you can’t truly replace yourself entirely without making several other sacrifices in exchange.
Astute business owners understand that ownership is the reward for all that goes into the business. It is your ultimate responsibility to make that pay, not just in money, but in life.
This is why your private practice is never about the money. It is about the way of life, the pursuit of excellence, the evolution of your greatest potential.
The real sacrifice is what you lose control over when you choose to give up responsibility.
When you own a business, you own every outcome. Ultimately, whatever happens impacts you the most and that is why smart owners aren’t shortsighted doing things that give them a short-term gain in money but take away from value of the future.
Those that do it successful are focusing on two key avenues necessary to get rich in private practice. They really go together and neither of them are selling your practice (although, at the right time in your life, that is certainly the appropriate culminating and celebratory event that you have earned the right to do).
The first way is capitalizing on your uniqueness. Not shying away from what makes you different – but accentuating it. That means making your practice fun while accomplishing the meaningful work that you look forward to, enjoy, and are most proud of.
It might sound easy, but it means bucking trends and fending off the status quo. You’ll never achieve their levels of profitability by relying on one-size-fails-most solutions for your practice.
Ultimately, it comes down the your value and being able to leverage your time to maximum effect.
The second mindset that delivers rich rewards is treating your practice like the business investment it is. You should be getting paid twice – first as the doctor performing dentistry and second as the owner of the business.
Imagine if you owed one of those franchises I eluded to earlier; you wouldn’t be flipping the burgers and yet you’d still expect to earn an income from an ever-appreciating asset. Well that’s also true as the owner of your practice – at least it should be if you take the proper perspective.
A quick aside, this is one of the greatest shifts in ownership mentality, that is seeing everything as an investment. In business, you have investments that drive value, create growth, produce income opportunities, develop people, and even nurture patients – all of these things are investments. Your electric bill, your snow removal, your team uniforms… all investments.
Now, let’s turn our attention back to the more important investment issue… the financial aspects of your practice and the actual money that flows out of (and as a result of) your business asset.
Some doctors think of “investments” where they make money very slowly over a long period of time. They take large portions of cash and stock it away (literally), and willfully accept small rates of return.
Compare that to how they invest on the inside of their practice (when they can dramatically grow their income and leverage the asset they are already paying for every single day), they are more frugal and view everything as expenses.
Here’s a quick example… let’s say you buy $100,000 of stock where you might receive a 2 or 3% dividend plus the increase of the stock price over time. Hopefully, if the markets are doing well, your investment might double in value in 10-15 maybe 20 years; with most of the value locked up until you sell it.
Instead, think of your practice as the investment vehicle.
How much would you invest if you could add $20,000 (heck, even just $5,000) to your monthly cash-flow knowing that you would keep that increase every month for the rest of your career?
Don’t forget to factor in the growth I’m talking about is profit-driven growth. Even the very poorest operators should have a marginal profit rate of 50% (unless you are an investor doctor or using associate based dentistry then perhaps closer to 30%). For those savvy practice owners, every dollar you make over and above what you are already doing you nearly 100% profit, minus lab fees, basic supplies, and any team bonus share.
Therefore, if someone asked a smart person how much would you invest in order to make an extra $10,000, $25,000, $50,000 or $100,000 this year and every year thereafter … only a fool wouldn’t invest at least $10,000, $25,000, $50,000 or $100,000 respectively. There is nothing else in your life you can invest in to double your investment on a recurring, annual basis.
Imagine if you made an extra $100,000 cash this year or better yet $1,000,000 cash. It is so satisfying when I help doctors earn more than $100,000 a month in personal income. That’s quite a breakthrough for most people; something they have not even dreamed possible.
The point is… before you go investing in all kinds of other things, you should be focused on investing in your primary income stream, your greatest asset: your practice.
Because when you do that, you will grow the amount of money you are able to invest in other opportunities each year and allow it multiply much faster.
People get rich not because of what they invest in but because of how much they invest in. Plain and simple, the more you earn and invest, the more you win.
Invest in practice profits – and financial independence gets a whole lot easier and happens a whole lot faster.
This is why, last week, I told you there are very different ways to grow. It is critical you think like a smart investor would… where can I invest time, money, and resources to make the biggest impact.
Being cheap about growth or small minded about investing is the best way to ensure you never break free from mediocre income and reach the real levels of profitability you are capable of inside of your practice.
Focusing on these two income-drivers (your leveraged value in the practice and the returns of your business asset) are the proven ways to get rich in private practice.
Next week, I’ll give you the good news… profit with fewer problems, more money with less work. It’s actually possible when you follow this plan and make it your own along the way.