HOW TO DOUBLE (OR TRIPLE) YOUR NET
DR. ACE GOERIG, Owner and Co-Founder
#Profitability #Revenues #Expenses
About a year ago, the ADA Health Policy Institute published survey results that showed the average owner doctor in an endodontist practice had gross billings in 2018 of $808,980. That was toward the bottom of the scale for specialties, beaten out in turn by pediatric dentists, periodontists, orthodontists and finally oral surgeons, who fared best overall.
Now let’s look at annual net income from the same study. Endodontists averaged $342,950, which was essentially tied for second overall among specialties. Endodontists easily surpassed prosthodontists, periodontists and pediatric dentists. We were in a statistical tie with orthodontists who exceeded us by only $10K, and oral surgeons handily held the lead at another $100K higher.
The only explanation for the fact that our averages are near the bottom for gross billings but near the top for net income is that we have an enviable expense profile. Overall, endo practices have lower operating expenses as percentage of revenues than most of our colleagues in other specialties. Is that a benefit to us, or is it actually a detriment because it allows endodontists to be more complacent? I would suggest the latter is the more important understanding.
Let’s go back to the data. With grossing billings of $800K (rounded for simplicity) and assuming 4 days per week or about 200 days worked per year, the average owner endodontist is billing about $4000 per day. That is the equivalent of three to four cases completed per day assuming an average fee in the $1300 range.
Many endodontists who have worked with me and Endo Mastery coaching can easily complete at least three or four cases in the typical morning, and then another three or four in the afternoon—double the average! So, what is the issue in the average practice, especially when most endodontists say they can complete an average molar in one hour?
In truth, the average endodontist stays average because the relatively low and stable expense profile of endodontic practices lets them (choose to) coast while still taking home a moderately acceptable income. It is primarily a limiting mindset of the owner doctor because the practice opportunities are invariably far greater. Consider the impact of just two more cases per day:
• $1300 per case
• x 2 cases per day
• x 200 days per year
• = $520,000 increased annual billings
Even if $20,000 went to supplies, that’s a boost of $500,000 extra net, which more than doubles the take home. Add 4 cases a day instead of two and income is tripled.
There’s a huge difference between a life funded by a $350K annual income and one funded by $850K or even more than $1 million annually. Become debt-free so fast, do the most amazing things you can ever imagine, and build an incredible generational legacy for your family.
You just have to decide you want it, because it is not hard as soon as you decide to leave your comfort zone and strive to achieve a better-than-average life. It is my mission to deliver this message to you: you deserve it, you can have it, and you can transform your practice and transform your life. Give us a call. We can show you how.
All the best,
Dr. Ace Goerig, Owner