How Dentists Should Pay Themselves (and Why It Matters)

On this episode of The Dentist Money Show, Will Gochnour, CFP® and Christine Uhen, CEPA, break down the financial fundamentals every dentist needs to build a sustainable and profitable practice, with a focus on paying yourself the right way, managing cash flow, and making intentional money decisions. They explain why compensation should be predictable and tied to clear benchmarks, how new practice owners can navigate the “ugly duckling” phase, and why understanding your numbers is critical for long-term success. Tune in to learn how dentists can avoid common pitfalls and create a practice that works for them.

Read the full article below!

Related Readings

The New Practice Owner’s Compensation Dilemma: What Smart Dentists Get Right from Day One

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Podcast Transcript

Will: Welcome to the dentist money show where we help dentists make smart financial decisions. I’m your host, Will today joined by Christine Uhen and just really excited to be here. This is the first one that I’ve hosted solo. So I know you’re probably maybe here heard me on other podcasts, but it’s Chris and I today, the dream team just us too. So I’m excited to be with you today, Chris. How’s it going?

Christine Uhen: Just you, good, all good here. Yeah, you and me, buddy. Let’s rock this.

Will: It’s going to be great. I hope everyone’s having a great day and looking forward to it. So we are going to just jump right in. And Chris and I recently collaborated on a article ⁓ about practice owner compensation and how you structure it. What’s the right way to make sure that you don’t mess stuff up and get it right from day one. Specifically, the article was about new practice owners and how to structure it in the first year or two of your Ownership journey, but I think today we want to expand a little bit and make this conversation applicable to every dentist out there that needs to structure compensation for yourself. Because I think a lot of dentists ask themselves the question, how much money do I actually make? Right. And it.

Christine Uhen: Yeah, yeah, and we’ve seen that
from your side of the personal financial side of things and I’ve seen that from the business side and what’s on a P &L is not necessarily what you’re taking home and you may be directed very differently from a tax advisor and all of those are valid points but truly somebody needs to get paid for providing the care whether that’s an associate, if you’re an owner with an associate.

Will: Totally.

Christine Uhen: And if you’re not, you’re the provider, so you do need to pay yourself a fair and equitable wage as a provider.

Will: Right, and I think to most, they’re listening that probably feels obvious, right? They’re like, yeah, we should pay ourselves. That’s the whole point of what we’re doing, right? I think that where we see people get into trouble is when they’re not being intentional about how they’re paying themselves, how much they’re paying themselves, and they’re just not paying attention to what is actually happening behind the scenes where maybe they pay themselves, but it’s… It’s kind of a guess every month or it’s something that’s not super predictable. And it’s kind of like, well, if there’s it’s feast or famine, right? Where if there’s leftover then great, I’ll take it. ⁓ and if there’s not leftover, then I’m going to go rice and beans mode for a little bit until I can get back on my feet. Right.

Christine Uhen: Mm-hmm. Yeah. Back to college living in our ramen noodles or that sort of thing. go. Let’s try to avoid that once you’ve, once you purchase a practice. Let’s get out of that mode.

Will: Exactly. So I think the core question I think you should. Yeah, we should. And hopefully we can combat that a little bit. And I assume, you know, that again, more applies to new owners that are trying to feel their way out and understand how much they should be paying themselves because especially the first year, ⁓ it feels messy. Right. We always call it the ugly duckling phase. And the question we’re trying to answer is like, how much should I actually pay ourself? And you just alluded to this, Chris, around like pay yourself like a producer. So why don’t you. Why don’t you hit that a little bit and give us some insight into that and how people should start thinking about it.

Christine Uhen: Yeah, yeah, so really thinking, so let’s stay focused first within that first year. And ideally, like you say, I can’t just hope that there’s money left over. I can’t live like that for a long time. But if I’m really looking at compensating a provider as a dentist, pretty standard acceptable rate, 30 to 35 % of net production, meaning after adjusted for PPO’s, cash discounts, things like that. So thinking about that as a producer, so for example, if I’m producing $10,000 this week, I should be taking 3,500 home, roughly. We’ll say something like that. So really being able to plan that and know that that is something I should add as an expense every month. So this comes down to in particular with the new owners. If I know I need to factor that in as a line item mentally, as a line item on a profit and loss statement in addition to my lab bills, in addition to my team expenses, in addition to my rent, and looking at all those other expenses. And then really what we’re helping doctors calculate is what do I need to produce and collect in order to pay my bills, including myself as the provider, as if it was somebody else sitting at the chair. So 30-35 % of net production is a very good realistic expectation.

Will: Yeah, I like that. That’s what you would get paid if you were an associate at your own practice, right? And I think again, that probably feels like, I know I should be doing that, but I can’t, you know, why, why do think people don’t do that? Or it’s hot, you know, why, why would somebody avoid going that?

Christine Uhen: I think out of fear is usually what I hear is that, I don’t want to take too much because I want to make sure there’s still enough to reinvest and make sure everything else is working. I can survive for a while without it is often what I hear from a startup perspective of I put some money aside and in a group in the really good scenario, we’ve thought this through the owner, the purchaser, the new incoming owner has thought about what do I have in savings in personal savings that I can take it easy, not push myself too hard, not make myself too worried over the production in the practice for a while, for how long. Maybe I’ve got three months of living expenses put aside and I know it’s there, it’s my rainy day fund and I’m okay if the sun’s not shining every day at the practice sort of thing. So I think it’s definitely fear, but I also think this goes back to did I plan well in advance? And that’s probably

Will: Right. Yeah. Yep.

Christine Uhen: part of what we were talking about with that messiness and having enough cash on hand up front. Have I prepared and done my homework on what is it going to cost to run the business? So before I purchase it, have I done my homework? Did I see the overhead expenses that will still be there if I’m taking over a practice? It gets a little trickier when you’re starting up on your own and you’re not sure what those expenses will be. So getting some good advice ahead of time.

Will: Right and you’re not sure.

Christine Uhen: on this is a big advantage to be able to factor in regular expenses, rainy day fund, and your own salary. So planning like that takes time in advance.

Will: I think that’s spot on. I definitely think, especially new owners shouldn’t expect to hit it on day one. You know, we say, pay yourself 30, 35 % no matter what. Well, guess what? Sometimes it’s going to take a minute to work up to that. And that’s okay. Be gracious and patient with yourself. We talked about the ugly duckling phase. It’s going to take a minute to get your feet under you. And that’s why we are also going to talk in the, in the, in a little bit about making sure you have enough reserves. If you are going into owning a practice to make sure you build yourself enough of a backstop to do it. However, for those that are more established in their career and they aren’t paying themselves this way, it creates a lot of opportunity to… pay somebody else before you pay yourself, right? And what that means is I think if you’re not intentional about how you’re paying yourself, you’re going to see that your overhead will just creep up over time. People will ask for raises or you’ll get a little more willy nilly on places you put, you spend money and things that you are willing to do as a reinvestment in the business when you should be taking it out as profit. And that 30 to 35 % is just this first baseline. That’s what you should be paid, you know, as the pilot who

Christine Uhen: Hmm.

Will: flies the plane, right? The producer in the practice, not because you are the owner of the practice. It’s the bare minimum of what you should be making as the one who actually is fixing the teeth. So that’s where we start. that to me should, you don’t have to pay yourself that 30 to 35 % in W-2. We’ll get into a little bit of that in the future. And you just got to make sure that you set that aside for yourself. That’s your pay from production, right? Right, lovely.

Christine Uhen: planned compensation.

Will: What is the, what’s the rest, right? So tell it, it, talk to the owner compensation portion of this a little bit.

Christine Uhen: Well, there’s, know, if you’re a solo practitioner, let’s go to that group, that you’re the solo practitioner, you are the lead provider, you’re the only doctor doing the producing. So yes, you need to pay yourself as that provider. But as that owner, you are also wearing about three to five other hats. You’re the chief financial officer of the practice. You’re probably the chief marketing officer, chief operating officer, right? And cheerleader, head cheerleader. So all these, HR, right?

Will: HR.

Christine Uhen: Chief people officer. So you’re doing all these other things for your business. You’re working on your business, not just clinically in the practice. So there should be, and what I love about looking at your business as the number one cash.
Revenator to fund your lifestyle, your investments, pay down debt, everything else that money can do, you need to put some money aside to be as the owner. So looking at 10 % of everything the office collects should ideally also go to the owner as an ROI, return on investment. This is your biggest asset for most solopreneurs, right, solo entrepreneurs, their business is their biggest asset. And if I had an asset class giving, you know, a 10 % return, that sounds pretty good, right? Double digit returns. We want that to be built in to, again, as a line item on a P&L, that we’re factoring another 10 % of all collections going to the owner as that return on their investment.

Will: Yeah, I love it. That’s so important because I’ve seen a lot of dentists who don’t prioritize that part of it. And maybe they’re maybe they we look at their P &L and they’re paying themselves what would equate to 30 to 35 percent, but nothing more. Right. And so the overhead is 65, 70 percent. And in that sense you’re doing a little more work than you need to to be paid like an associate would be paid in your practice, right? So you could go work as an associate elsewhere and make the 30, 35 % on the production that you’re doing. And essentially it’s the same. I know there’s a little bit of nuance there with you get some percentage of hygiene and whatnot, but.

Christine Uhen: Mm-hmm. But still, but still very little. mean, we’re not, you’re definitely not, you know, paying your, why do that? Why own if it’s not about, you know, some, obviously it’s fun to be your own boss. I mean, there’s some truth to that, but it’s also, it just takes your time. You should be paid for your time. You know, and there’s also something on the, there’s a check that gets, has to get paid every month that’s not on the P &L. And that’s the debt service.

Will: Yeah. if there’s not the ROI. Right. Yeah.

Christine Uhen: So that’s another thing that if we’re not factoring in the fact that to own this business, it is costing you a certain amount of money every month and that bill comes to you every month. And so if we’re not factoring that in, at least within the 10 % ROI, if not in addition to that, then we’re really, know, then your cashflow is extremely reduced, you know, and probably not enough to fund the investment strategy that you need to create that wealth over time.

Will: Yeah, I love it. And just to that point, like income is one of the most important numbers throughout your entire career that you’re going to need to pay attention to every year so that you can plan the rest of your life as on our side of things, the personal financial side of things. Income is what determines what’s available to do financial planning, right? If you don’t understand how much money you make.
then you can understand how much you have left over after you spend and pay your debt and pay your taxes and how much is there to save. Right. So that’s where it all starts is understanding your income. And I love the quote that numbers are not the cure, but they are the prescription. Right. And so, it’s, this is obvious, I think, but this is just a plea to everyone out there to, pay attention to your numbers, because this is, you can’t, you can’t win the second half of the battle if you haven’t already won the first half. And the first half is understanding.
what your numbers are telling you, what your income is. We have just so many experiences with people who don’t, maybe they’ll say like, oh, I just am not a numbers person or I can’t get into the numbers. That’s fine. There needs to be somebody in your life that’s taking care of the numbers and understanding this profitability percentage. So you alluded to it, right? 35 % gets paid to you as a production pay. 10 % gets paid to you as hopefully an owner pay.

Christine Uhen: Yeah. Yeah.

Will: That means that you’re getting paid 45 % of your collections and that’s a really good profitability percentage for a dentist. That’s really like above average, I would say for most dentists nationwide where you collect, let’s just call it a hundred thousand dollars in a month and you take home $45,000. That would be the 45 % profit. That means that 55 % of it went to overhead. And that’s a really good, that, you know, over time, that’s going to be a really good lifestyle, you’re going to get a lot of value cashflow out of this business. It’s going to be worthwhile to you to own a highly profitable practice.

Christine Uhen: Yeah. Well, and definitely, you you want a practice that provides lifestyle now and then also is something that is a value over time that if you needed to sell as part of your retirement strategy would be there. Just a couple things. So again, numbers start a conversation. that 55 % overheads would be fantastic, like you’re saying. But that also means I need to know what they are. I need to know where they’re going. I need to know what did I spend? What did I invest in? And again, the 35 % conversation is just on the dentist.

Will: Yeah, right.

Christine Uhen: procedures. So just to clarify that, not on collections, but on what they themselves produced. So but the 10 % on the whole office. But still that, so bringing back to that 55 % overhead.

Will: Right. Okay.

Christine Uhen: What is, where are the healthy benchmarks depending on the specialty or general dentistry that you have? Where am I overspending? Or what’s also most interesting is it might not be that you’re overspending, but that you’re under producing, right? So where is, in a dental practice, depending on the operatories, just depending on patient flow, depending on services you provide, what is the capacity that your practice could produce and without even adding any overheads. So it’s just fascinating to know that you may see, yes, everything has gone up in cost. Let’s not deny that. From team salaries to rent to, you know, to cotton rolls, right, your variable supplies. All of that has gone up and based on increasing productivity, your percentages, you could still stay at that 55 % overheads. if we increase the productivity on that side. So, yeah.

Will: Right. like that. Flipping it on its head a little bit, right? Where it’s like, and this is if you’re in your personal life too, there’s only so, if your income is set at a certain percentage, there’s only so many expenses you can cut. can’t just fire all your staff and say, I’m going to reduce my staff costs, right? That doesn’t work.

Christine Uhen: Watch your productivity go down. Yeah, exactly

Will: Right. And so I love the idea of sometimes it’s not an expense problem. Sometimes it’s either collections or income problem. Talk a little bit more to that because I think that’s valuable for people to hear where we hear a lot of like, yeah, you know, everything’s gotten expensive. This is all I can do. But I don’t think it’s as it puts the ownership a little bit more on the doctor when you say, well, it’s not an expense problem. It’s an income problem. It’s a it’s a collections problem.

Christine Uhen: And again, it could be production, could be collections, either one. Again, there’s so many different things that can affect either one of those. But again, really looking at some of the capacity of the facility. Let’s just start with that. If it’s a four-op practice versus a seven-op practice, then there’s definitely 35 % more, 40 % more.

Will: More capacity at the bigger office. Yeah.

Christine Uhen: capability, capacity to grow in that sense. What’s your new patient flow? Are you growing with the opportunity? mean, are more people coming to you? So this goes back to a little bit on that ROI and I think about the expenses. So you think about if I’m expending more on marketing, but it’s bringing me in more patients and they’re doing more production that dollar value might have been up on my expense, but the percentage is not going up and it’s actually probably coming down. So if I’m spending $5,000 a month on marketing, but I’m now getting 30 new patients instead of 20, those extra 10 patients, if they’re as productive, then my expenses went up as a dollar value, but didn’t go up as a percentage. See where that exchange happens? So we’re really getting into some numbers. So if you’re listening to this,

Will: Yeah. Right.

Christine Uhen: and in the car go home and listen to this again but there’s some real because we’re getting into some of the details here but again this is how you can be profitable by knowing that a good investment on an expense is often worth it right so is it and if you’ve got enough profitability that you can invest back into the practice without reducing your personal take home at least your owed salary. That’s what we’re really trying to make sure is consistent at least that take home as a provider. So when there is profit left over and you can reinvest it back into the practice and see a return on that investment. Now you’re creating better use of your facility. You’re maximizing the capacity
of the practice itself and growing top line and then if we’re managing the expenses you are growing the bottom line.

Will: It’s going to grow a bottom line. Yeah. Love it. That’s awesome. I would just say as a final kind of thought on that topic is once again, don’t be afraid of the numbers. The numbers are your friend. They can be your friend. They can be daunting. And a lot of times there’s avoidance there where you’re like, I don’t even want to look at it. I’m just going to make sure I don’t run out of money in my bank account, but, ⁓ they can empower you. They really can. It’s just, it can bring you control and allow you to really make decisions and form decisions on.
things that will make a huge difference over the long run. Right. And just being conscious of the expenses, the collections, your capacity, all these things, work with the right people, obviously to help you translate some of this stuff and figure out how to do it. But, there’s power in that there’s power in numbers and, and owning that. that’s part of the challenge and fun and, ⁓ adventure of being a business owner is.
You get to make the calls on all of this stuff and it’s not unique to dentistry. Every business owner in the country has a profit and loss statement. The expenses are going to look a lot different and the profits going to look a lot different and the staff costs are going to look a lot different. Dentistry has some unique, you know, kind of benchmarks that everyone that we can help you with obviously, but, it, you know, it shouldn’t be rocket science. It’s just a problem to solve. So.

Christine Uhen: Mm-hmm. Yeah. Well, and it’s about that being intentional too, right? Just hoping that money’s left over at the end. ⁓ One of my favorite lines is, know, hope isn’t a strategy. It’s not a business model. So, rear view business advice is risky. ⁓

Will: Yeah. Yeah. Right.Love it. Okay. Well, let’s shift gears a little bit back to, ⁓ kind of the article is some things we wrote in the article. Again, check it out on dentistadvisors.com but, ⁓ shifting gears a little bit more towards new dentists and, ⁓ some common mistakes that we see that can really hinder your progress. And we put it as blow up your cashflow in year one. and let’s just talk to these a little bit. There will be some, ⁓ some application to new and seasoned dentists, but. The first one is running out of runway. So why don’t you talk to that a little bit, Chris?

Christine Uhen: Well, the idea of being, well, I think we talked about this in the article about sticking with if I’m buying a new startup, I think was where we really started with this in the article of not having enough. ⁓ cash on hand to be able to handle the bumps along the way. Not having enough capital in terms of ⁓ an investment where you had a loan that you get a startup loan, right, practice loan to get things going, capex, the operational. ⁓ Loan that you got to get things started and did not have enough of that and to run out of that before you had enough revenue coming in I think that was like the worst-case scenario that we described in that in that article and and that is all about planning and not doing this, you know, this isn’t a DIY kind of project of understanding purchasing a location and or equipment and or You know, where am I going to get new patients from just? Putting your shingle out is not how successfully you would start any business right now without a lot of strategy, research on a community, competition, looking at where new patients are coming from, dentists in your community, all sorts of different things that need to get evaluated before you invest in that opening your front door.

Will: Yeah, I agree. mean, we, I’ve seen a couple startups fail and it, it pulls on your heartstrings. It’s just a, a bummer with so much optimism and you know, this should be this opportunity and the being a dentist is that, you know, one of the best careers you can have in the world if gone right. But again, it can go south if you’re not prepared. And both times that I’ve seen it personally, it was just a matter of running out of runway and it really wasn’t even the the dentist’s fault. was, you know, things that got hung up with construction and, you know, difficult contractors and things like that. it just delays ran out of runway. And so by the time the doors were open, wasn’t able, you know, the client wasn’t able to, ⁓ make the most of it. And, you know, it didn’t work out. so for me, it’s just taught me the lesson that startup specifically, you can’t have enough runway. Right. And then.

Christine Uhen: delays.

Will: You know, the second thing of it would be non-startups, so acquisition would also just be making sure that there will, that I have also had another client who had about a year’s worth of firing and rehiring everybody in the practice. And it was just, he couldn’t have known that going into buying the practice, it caused him to need a lot of liquidity because he wasn’t making any money the first year. It was a complete turnover and in a way it was almost like a complete startup. Right. And so.

Christine Uhen: And that is that there’s that same runway only with a different business model. Now I’m on my second location or acquiring one that was already set up. Both of those apply. Acquiring and my first or my second or my multiple beyond there. having enough liquidity to handle the loss of your own revenue because you’re handling all these other things but going back to all those other hats that you have to wear.

Will: Right. Yeah.

Christine Uhen: And how that can affect this business, your personal life, all of that, just before you start investing in the next huge investment, huge asset that’s very illiquid. I mean, you are putting money into that before it starts paying things out for a long time.

Will: Yeah, for sure. And I think just another kind of sidebar on that as well is our, you know, current season dentists, it’s so funny to think back to COVID 2020 when everyone’s practices were shut down for months and the, you know, the conversations around furloughing employees and, you know, how do we keep people paid and on staff? And I remember before COVID, we were telling people to have
one to one and a half months of liquidity or runway, right? That’s essentially the number that we come up with, but for some dentists, it didn’t feel like it was enough, right? And in no world could, you you expect your rainy day fund to be needed like that. And to use your words, said, you know, COVID, that’s when it poured rain, right?

Christine Uhen: Yeah. Yeah, that’s not, you know, we the rainy day fund plan for a rainy day. Well, it poured right during COVID debt that well, and that’s the there’s the real truth to. So this is applicable no matter what to have enough operating expenses that you could keep your doors open for probably two to three months, I think is where again, that’s I’ve seen it up to six months. This again, it’s like your comfort zone yourself. Where are you comfortable risking? Do I want to have enough operating expenses for one

Will: Yeah, right.

Christine Uhen: Two, three, six months just in case. I think, again, debt is very personal. So whatever you’re comfortable with and having that on hand, relatively liquid, or if I could get it without penalty if I needed to.

Will: Yeah, I agree. I mean, we’re big on this. We talk with all of our clients about liquidity level that they should hold in all these different accounts, your personal emergency fund, your business emergency fund. We usually recommend setting a, putting a lid on it, right? Setting a cap. So pick the number you’re comfortable with. Six, I would probably say, I mean, if somebody was needing to have it be six, I would probably tell them that it doesn’t need to be six. And we try to reduce it because there’s some, some risk of cash drag, but you know, again, to your point, whatever you’re comfortable with two, three, you know, you name it. And what will help you sleep at night because having the cash is important to, you know, to that extent. However, ⁓ but then put a lid on it and don’t let it be this account that continuously piles up cash because that means that you’re not being intentional with the money that you’re paying yourself. Right.

Christine Uhen: Yeah, and that could be the risk too, that you’re funding this safety net and not funding your lifestyle because I’m too worried about that.

Will: Right. Yeah. Good. Okay. So that’s, that’s a good way to kind of tie a bow on running out of runways. Just obviously liquidity is important heading into any transition in your life, specifically, you know, a new career, a new, a business owner venture, whether it’s your first location, your second location, your third location, it’s going to put strain on your liquidity because it will take a minute to get going sometimes. And

Christine Uhen: Well, in those multiple locations also, you you may have to start dividing your time. So again, this is a whole nother level of advising of if you’re thinking about acquiring second or more location, will you have to reduce your clinical time, which will reduce your percent revenue that you should be taking home? Does the practice have enough on the first one to pay you enough that you can step away or are you bringing somebody else in and that has to be that person has to get paid? Are you going to plan on having revenue in the second location? So again, very complex, but not just your personal revenue, but also your time and what that means to you too and the value of that time.

Will: Right. Love it. Yeah, for sure. Good. Okay. Number two is buying toys before you have patients to use them on. As a new dentist, this can be a cardinal sin, right? This can be something that gets you in trouble pretty quickly. I like to think of it as putting, you know, like fancy spoilers and tint on a beat up car, right? Like there’s not really…

Christine Uhen: Hahaha:

Will: A whole lot of reason to have the fancy pieces on something that’s just getting refined and built. Right. And, ⁓ I mean, I was at Rocky mountain dental convention this last week and it is amazing to walk through that hall and, know, kind of get, had my, there was a moment where I had my tag tucked into my coat because it was kind of cold in the room. And so just put my coat on and just walking through the aisle. was getting pitched left and right. Like, Hey doc, you do.

Christine Uhen: Yeah, the assumption of you is the dentist.

Will: You know, you do IV sedation in your practice, come check
this out or hey, come look at this fancy endoscopic microscope. And, ⁓ so, I mean, there was, there’s a lot of different things that you can get pitched. ⁓ and any, a plethora of things you can buy, but that’s, I like to hear your take on that. about buying tech before you have patients to use them on?

Christine Uhen: Attack is a better word. I jokingly was saying that you don’t need toys, but the idea of what, so let’s start in the article in particular, we’re talking about a startup and the fact that you, your number one need, our patients Right? You definitely get your equipment to provide the care that you want to provide to your patients. Do you need to have a laser to do dentistry? No. Do you need to? And especially if it’s not the kind of dentistry that you want to grow and focus on. Do you need a CBCT? Well, if you’re not doing surgery and focusing on that from the very get-go, then that’s probably not the first thing you would want to invest in. So tech and toys, the cool things. What you need are patients. You need bodies in the chair. So when it comes to a particular startup, the best investment is in marketing, new patient acquisition, attraction, all of that. So everybody’s a new body. Every body is a new patient at that point. And so it is just about increasing your opportunity to diagnose treatment plan and do the dentistry. So that’s usually where I would recommend the most investment dollar-wise is in acquisition, patient acquisitions versus purchasing a thing that might make it more fun and or easier to do the dentistry.

Will: Right. And there’s all different levels of lasers that you can buy, right? Like you can buy the fanciest laser, the cheapest laser. I definitely think you’re spot on Chris and just saying that you got to prioritize butts and chairs, right? That’s what we say bodies and that that’s what’s going to enable you to get the fancier toys and tech later when you are have the ability to actually, you know, practice the R practice what it’s going to be to calculate what it’s going to be to have the ROI on those.
pieces of equipment because they will, they will, you know, there’s no, for the most part, piece of equipment over time will end up providing an ROI of some way, reform. Usually it’s a longer term ROI, right? Usually it’s a, you know, if you bring in the mill, it’s going to be a higher cost upfront or a higher cost of finance. over time, as you utilize it more, it’s going to pay, pay itself, pay for itself.

Christine Uhen: Mm-hmm. Mm-hmm. Right. and then become profitable after that too. So, but again, there’s this, you know, we can help with that. We can look at schedules of return on that investment. And am I changing a bill to, you know, to buy the milling unit against my lab bill? Those sorts of things we can calculate and help in the decision-making process. But again, I’m going to go back to, being intentional with that spend, not an emotional, yes, this is so cool as I’m walking around the Rocky Mountain Dental Convention.

Will: Patients are gonna love it. Yeah.

Christine Uhen: and I jokingly in my career have said, me your credit card doctor. Do not go, do not take a credit card with you on these cool conventions, because it is, it is cool. I want to be the fun, you know, the early adopters. ⁓ and the deals. ⁓ yes, which, ⁓ only this weekend, right? No, it won’t be there next week. Commit now, right? You know, which, and don’t, you know, again.

Will: Yeah, don’t take him. And there’s always a deal and there’s always, yeah, yeah, the conference discount. Yeah, it’s shopping math at its finest, yeah.

Christine Uhen: been at them all, a vendor as well as a participant. They are fun. They are great. It is a wonderful way to get information in front of all of our clients as well. And it’s just the cautionary tale of please be strategic in the purchases that you have that you are doing. There’s plans to get the ROI on that to utilize it. ⁓ I’ve seen enough practices in my career where there’s in the corner what I call it the island of misfits. toys from Rudolph. They were great at the moment but they didn’t make the test of time. They were a one-hit wonder. We didn’t implement it right. We didn’t know how to get it in front of our patients. Our patients didn’t want it, whatever it might be. So avoid the island.

Will: Yeah, I agree. We get this question a lot at the end of the year. Should I buy a new piece of equipment? Cause it’s going to help me with taxes also. It’s kind of a tangent to this topic, but it’s the same conversation around. Don’t, I mean, in this one, it’s always like, don’t let the tax tail wag the dog, right? Like don’t buy a piece of equipment. it’s not something that’s actually going to serve you well. And just because it’s a fancy piece of equipment that you can depreciate and save on taxes. That’s.

Christine Uhen: Yeah. You still spent the money.

Will: You still spend the money. And again, for new owners, you we need to focus and marketing, think was your point, right? Give us two seconds on, you know, that seems like a pretty broad recommendation. Like, is there any other tips or tricks you would give around marketing, hiring, marketing agency, finding the right tools to make sure you’re.

Christine Uhen: I will say ⁓ get help with this. This is something worth investing a you’re not just getting someone to build your website and manage your SEO. There should be a strategy behind this. So again I’m to go back to the business. If I know because I’ve done a little bit of preparation I’m going to spend my overheads are going to be my operating expenses not even pay me are going to be sixty thousand dollars a month and maybe I want to make some money on top of that. So I really need to shoot for let’s say eighty $20,000 a month in production.

Will: Hmm.

Christine Uhen: So what is the, what is it, how many patients is that going to be for me to get $80,000 worth of production? Is that 80 patients at a thousand each? Is that a hundred patients at 800? So things like that, that you really want to have some sort of organized approach to the kind of dentistry I do. How many patients will I see? Are there write-offs I’m going to have to take from the PPO involvement that I have? So there, again, we’re back to the numbers, but having a marketing company with a strategic plan.
who says I need to get you this much production based on the kind of procedure that you do, the write-offs that you have. So here’s our target. So from the very beginning it is just about more, more, more. You just need more. But when you are really thinking about how much do I need to produce and how many patients do I need to produce them on, to produce that much on, it’s different. Is it?

Will: Uh-huh. Yeah. Yeah. You can kind of back into it, right? You got to, it’s not, you kind of reverse engineer. If I have to do this a month, here’s how much my new patient brings me. Here’s how many new patients I need. Marketing company helped me get there. And then I think an important part of this is holding the marketing company or the people you bring in to help you accountable to say, how are we tracking this? You know, the dollars that I’m spending in these areas and making sure that it’s not just throwing money to the wind and helping people show up and.

Christine Uhen: Exactly. And I will say most marketing companies are very good about that. And we certainly have some of our professional recommendations as well. But yes, that is important. And again, that’s something you should be asking for from the company before you hire them. What is their reporting structure?

Will: tracking that. Right. Love it. Good. And that applies to new patients are the lifeblood of a business, right? So it’s not just a new business owner, a new practice owner that needs new patients. If you stall on new patients, ⁓ it’s likely that your practice is going to either go backwards or just plateau, right? And probably not just plateau, but go backwards because you are going to lose patients.

Christine Uhen: Well, exactly. So you’re talking about not just new patients, you’re talking about maintaining and growing the actual patient base, right? So again, this number is gonna be critical throughout your entire career as a dentist. What is my patient base? That’s where we make business decisions on, that’s where we can estimate per patient revenue, we can set supply and demand ratios for hygiene hours.

Will: bass. Do think most dentists know that number?

Christine Uhen: Most I will say of our audience probably more than not and But again, are you tracking that monthly? Are you tracking the new patients against lost patients every month? Are we waiting until the end of the year or until your consultant wants to know but there’s there’s a real planning opportunity as you know When do I bring in another hygienist that’s based on patient face? When am I gonna be when can I go out of network? That’s based on patient face. How much are you spending on marketing?

Will: Yeah.

Christine Uhen: you know, base numbers. So as you’re managing a business, patient base is a huge factor. So I can’t stress that enough. I think I’m gonna have to do a podcast on that.

Will: Love it. Love it. And all of this. Yeah, I think so. It sounds like that’s a, that’s a topic for another day because we could go for another hour on that topic itself. ⁓ so bringing it back to income, we, know, there’s a, everything affects it. The practice itself is, is going to be your cash cow. That’s going to spit off this income that hopefully provides for your lifestyle and your future retirement and everything. But there’s so much nuance to how it comes back to you. And that’s where.

Christine Uhen: ⁓ I think so.

Will: touched on a little with some of those topics today. But for a new owner, the third thing, I guess, on that list for a new owner is it’s a little bit redundant, but not building enough cushion before you buy. this is this is something we see with new owners is, yes, having enough runway. We hit on that and it combines with that, obviously. But the runway would be more like the business reserves that you get from the loan to make sure you can spend on the business. But if you can’t take money home personally, you’ve got to have enough a backstop on your personal life because that can cause strain as well.

Christine Uhen: Mm-hmm.

Will: One of the practices that I saw not make it was a, was a, had the person had a higher personal spending rate. Right. And so it was, it just put more strain on the situation when there’s more pressure to bring home money early. It creates, it puts pressure on the business as well. So not having enough liquidity just before you buy is another big topic in and of itself.

Christine Uhen: and I’d say. Yeah, and that’s in, you know, our friend, Perrin Desports has a whole educational platform on that too, when you’re buying that second one or third. But that same idea of personal liquidity is before you ever start, you know, thinking about acquiring a second one. So it applies not just to the new doctor, but to someone mid-career that’s looking to grow.

Will: Yeah.

Christine Uhen: You could take that to expansion too. I mean, let’s just think about that. I mean, if I want to expand my facility or if I want to purchase the building that I’m in, all of that matters too in terms of, you know, what can I… ⁓ If I’m going to be doing a remodel and I’m shutting down, what can I risk in terms of liquidity personally as well as from the business side? How much is is backed up or saved? How much how long can I pay my team if the whole office is shut down for two weeks or do I have to lay them off? So all of this applies throughout the career of a dentist.

Will: Yeah, exactly. I think it’s something that, you know, you can’t take your foot off the gas with this and you should, this should be something like, you know, that you review often and have a plan for year after year. We’re just starting up our beginning of year review meetings with clients where we will review P and L’s and go through health of the 2025 financials and see what was.
Essentially what was brought home last year to use it to project forward into what we think is going to get brought home this year so that we can put together a plan on savings and spending and investing and debt and taxes and all of that and making sure that we’ve got all our ducks in a row because it changes year by year. If you do more in collections, then you can hope to make more. If you do higher overhead expenses and less in collections, then you probably make less and that’s going to, we’re going to need to recalibrate, right? So this is not a set it and forget it type thing. It’s, it’s an ongoing living, breathing.
that you have to take care of and give a lot of attention to to make sure it’s healthy. So I guess that would be curious to know, Chris, like how would a dentist know if they’re not paying themselves correctly? Like what do you think the signs of that would be?

Christine Uhen: So one of the statements I have heard is there’s more month at the end of my money, right? It’s like my P &L shows a net income. I don’t know where that went, right? It’s like, where’s that, where, I don’t feel that. And a lot of that is because of their debt service. That’s what’s not on the P &L. that, but yet that’s a check that has to get paid every month.

Will: Mm-hmm.

Christine Uhen: ⁓ I think again, having an understanding, it’s certainly significantly less when I’m working with the dentist advisor clients. They know what they need to take home. But if their spending is not being tracked, if they don’t know where it’s going, if they have not looked at their P &L recently to understand that, your bank service charges have gone up, your credit card fees are going up, the usage of that, do you realize your PPO write-offs are going up, things like that driving the business that they aren’t focusing on and then it’s like, how?
where is my money kind of thing. But they’re usually feeling a cash crunch. They’re feeling cash poor. They’re feeling tight. They don’t feel that they’ve got anything built up. They feel like they’re on a treadmill. So that’s definitely some of the symptoms that I’ve heard from doctors. But then when I’m looking at the numbers, we can clearly see it’s where. Yeah.

Will: Yeah. Yep. Yeah. Why? Yeah. Yeah. I think it’s, yeah, I definitely think it leads to lifestyle stress and burnout. And that to me, this is what starts the slippery slope of like, I got to be done ASAP. And, you know, I’ve become a servant to my business and rather, yeah, right. Rather than, you know, where you’re in control and in the driver’s seat. So it is a, it is something that, you know, those that are listening probably, you know, can

Christine Uhen: slave to my company.

Will: put themselves in a category of where they stand on that spectrum, because it is a spectrum, it’s not black and white, but there are always ways to improve and make sure that you are optimizing your numbers. And again, that’s the first step. That’s the first part of the fight is optimizing the numbers or understanding the numbers. Then you can take the steps to optimize them. We always say the planning process is fourfold, organize, analyze, decide, and then act. And you can’t get to the decide and act part.

Christine Uhen: yeah.

Will: Unless you’ve done the organize and the analyze and the organize is making sure you’ve got the numbers. The analyzes looking at the numbers, the decide the decisions then come once you’ve looked at the numbers and then you got to act on decisions and then you’re to have success. You’re to make good decisions throughout your life. And that’s the podcast slogan help dentists make smart financial decisions. Right. Good. Okay. So I think just quick tactical guidance on this is just making sure you’re checking in often coordinating with, you know, a financial advisor.

Christine Uhen: There you go.

Will: a CPA definitely because most of the P &Ls are produced by the CPA ⁓ and making sure you’ve got a good plan. And I always say a lot of times CPAs are less proactive about this stuff, but if you are working with a dental specific CPA or a dental specific advisor, that person should be able to provide the benchmarks that you need and provide kind of the guidance around here’s what, like maybe we’re not going to solve the problem for you, but we’re going to help translate what this looks like and help you. Start the process of diagnosing the problem so that then we can make the treatment.

Christine Uhen: And that was the point I was going to make is there are benchmarks and you should be able to get that from an advisor and if not then you need to find a different advisor that we know what the benchmarks are. And to be honest with you that ⁓ I would say more often than not the answer to the problem is ⁓ systems in the practice that will increase productivity. So, you know, as a consultant for 20 some years it wasn’t about cut your overheads, your team stop spending. It was about getting a return on your team. Right. For the same salary we can bring that 30 percent overhead down to 25 by increasing the productivity. there efficiencies? Are there technologies that would help with the efficiencies in your practice? Your collections managing your cash flow in the business. How is that being handled? Why isn’t that coming to you in a timely manner? Those sorts of things.

Will: because they’re just… Yeah.

Christine Uhen: So it’s been a great career to be able to help dentists optimize their practice with efficiencies, grow their business. that’s where, and from there comes the increased revenue, the cash flow.

Will: Love it. Love it. think just that’s, hit the nail on the head, be intentional, know what’s happening, put in the systems in place to make sure you’re, you know, getting the juices worth the squeeze for all of the work that it’s going to take you to get to this point. And a lot of people, you know, I have clients that say, you know, was this worth it? And in the beginning, I’ve heard them tell stories to themselves around like, you know, this has been more harder than I thought. And then fast forward a couple of years and said, this is the best financial decision I’ve ever made. And, know, it’s a journey, it’s a process. You can’t expect it to happen all at once, but stay patient with yourself, be intentional and it’s, know, it’s going to come. so quick shameless plug for us is, you know, we can help with this. Obviously, if you would like to go to the, the, ⁓ website and book a consultation, dentists, advisors.com and feel free to set a, a time to meet with one of our advisors. That’s going to walk you through the first part of this process is just getting to know.

Christine Uhen: Yes we can.

Will: how you can be better with understanding the data, organizing the data, analyzing the data, then making these decisions and acting and making smart financial decisions. So, yeah, of course we’re here to help. The last thing that I will say just quickly to plug is this episode will probably be coming out sometime in February. So we’re going to be a couple months out of our dentist money summit, 2026 dentist money summit. It’s going to be June 11th through 13th at the Zermatt Resort in Utah, Midway, Utah.

Christine Uhen: We are here to help.

Will: And it’s just a really awesome event that we would love to have anyone who’s looking for, ⁓ you know, a mountain getaway where you’re to learn about money and life and recalibrate, kind of hit the reset button on stress and burnout and learn some tools and tactics and meet with a lot of cool, like-minded dentists. ⁓ it’s a great place to come. So we’d love to have you. And so feel free to register for that on the events page of the website as well. Anything else, Chris, that you’re thinking of before we wrap up?

Christine Uhen: don’t, will shamelessly say, yes, come to the Summit. We’ll have a lot of fun and meet some great people and you’ll learn a lot too.

Will: Love it. And we’ll see you there. Okay. Awesome. Well, thank you. That was a great conversation, Chris, always a pleasure and hope you have a, everyone has a great day or night whenever you’re listening to this and we’ll talk again soon. Bye.

Christine Uhen: Sounds good. Bye everybody.

Keywords: dentistry, financial planning, dentist compensation, practice management, cash flow, new dentists, profitability, dental technology, patient acquisition, financial health.

Income, Practice Management