“Business” Is Not A Dirty Word

From time to time in dentistry and in dental forums the discussion arises as to whether dentistry is a profession or a business?

Dentists who own their own practices are considered to be business owners.

  • By the government.
  • By the regulatory authorities.
  • By the tax office.
  • By other businesses.
  • By their employees.
  • And by the general public.

And frankly, if a dental practice is not a business, or considered a business, then it must be a charity.

And a charity it is not.

So therefore, a privately owned dental practice must be a business.

So by definition:

By definition, a business is described as the activity of making, buying, selling or supplying goods or services for money”.

What that business does with that money is important:

Some businesses invest in employing more people.

Some businesses purchase more equipment and assets.

Some businesses pay their owners dividends.

Putting it simply, the money made by the business fuels economies both locally, and distant.

The money made goes around.

Businesses need to be regulated:

A business needs to operate to certain pre-determined standards.

It must pay its fair share of tax.

It must operate with safety and follow regulations that are set and determined to be the SPECIFIC STANDARD as determined.

People who work for that business need to be confident that the business is operating safely and ethically.

Otherwise…

Otherwise without regulation, it’s not a business, and it’s not a charity.

It’s at best, a hobby.

And at worst, it’s a free-for-all.

Some consider the practice of dentistry in private practice to be a profession, and not a business.

I don’t.

There’s a lot of effort and sweat equity that goes into the education required to qualify for dental school, and there’s a lot of effort and sweat equity that goes into getting through and finishing dental school.

On a balance sheet, to me, that’s a debt that needs to be repaid.

And speaking of debt, now students graduate from dental school with a government imposed “education tax debt” that needs to be repaid…this education debt is the graduating dentist’s DUTY to repay to the state for the opportunity of being educated… ???

And this despite the fact that as high earners and high achievers anyway, dentists as a whole will earn more and therefore pay more tax throughout their careers anyhow just as a result of becoming dentists…

Step 2:

So after graduating and being employed for an amount of time, a dentist then either buys and takes over an existing practice, or they pick a site and establish a brand new dental practice.

These are decisions that both of which can at times be speculative and risky…

And with risk comes….

And of course with all risk, there should come a degree of reward.

A reward for effort.

A reward for taking a risk…

The reward for the effort needs to be financial.

The reward for taking that risk needs to be financial.

Commendation and applause are not a good reward.

Commendation and applause are pleasant, but you can’t buy food at the grocery store with a wheelbarrow full of commendation.

And nor can you divide up your applause and commendation and pay your employees with it.

Dentists who are owners of their own practice need to be paid in three ways:

1- They need to be paid by their practice as an associate dentist working in that practice.

They need to be paid for doing the dentistry.

Most owners do not pay themselves this way.

Most owners need to pay themselves this way, because if they are ever absent from their practices, they will need to hire someone else to come in and operate as an associate dentist in their practice, and the practice will have to pay that associate in this way.

2- They need to be paid for all their management roles.

Similarly, if an owner performs management roles, such as HR, payroll, marketing, if these duties were not being performed by the owner, they would be tasks that another employee would be being paid to perform.

3- They need to be paid a dividend as a shareholder in the business.

If the business cost say, $1Million to purchase or set up, the dentist owner needs to be paid a dividend for the investment of that $1M, in the same way they would receive rental income from a $1M property investment, or a dividend from $1M worth of shares.

To underpay on any or all of these three roles is at best charity, and at worst, stupidity.

To not consider practice ownership as a business…

At the end of your life, in retirement, if a dentist owner falls on difficult economic times, those people that he’s ever been charitable to along the way will be conspicuous by their absence from the line of people forming to offer a helping hand.

As a dental practice business owner, it is your duty, to yourself, to your government, and to your family and to your community, to earn sufficient profit from your business career that you are never ever going to be a financial burden to anyone or anybody during your twilight years.

The purpose of being in business is to provide for a comfortable life and to provide for a comfortable retirement.

Any profit beyond that can and should be invested wisely.

That investment could provide for housing, or could provide for investment in other businesses that stimulate employment and further investment.

Or that profit can be donated to charities.

Or it can be taxed and that taxation money can be used by governments to pay for infrastructure and welfare.

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