Financial Freedom to Smile About: The Path to My Dream Dental Practice

Growing up, the last thing I wanted to become was a dentist. I guess I was being rebellious. After all, my dad and a bunch of my cousins practiced dentistry, but I wanted no part of the family business. All of that changed when I was halfway through college.

At the age of 20, my father sat me down for a talk. What was I doing with my life? Where did I want to go, and what did I want to accomplish? I was perfectly happy getting by. I wasn’t thriving, but I was surviving. I was in school and I was following the Grateful Dead on tour. What more could I ask for?

Of course, my father was right. I needed focus, but I also realized that dentistry was the perfect fit. I loved science, I was very good with my hands, and I had a creative streak. I could work on people’s smiles! As I found out over the years, the job comes with its share of frustrations and frowns, but I wouldn’t trade it for anything.

The Family Business

The first step in my journey was a winter internship at New York University. It was my father’s alma mater and he arranged for me to spend the holiday break shadowing some dentistry students. It was an eye-opening experience. I was already studying biology, so I had the requisite science background, but shifting into dentistry was a good way to channel my talents and earn a comfortable living. 

I smartened up and applied myself. I had to. Not only had I fallen in love with dentistry, but I’d also met the woman who would become my wife. We’ve been together for 34 years. Through thick and through thin, she has stood by me, and my number-one priority has always been making her and our now-grown children proud.

The funny thing is, I ended up working for my father, but only part time. After my general practice residency, I joined the family business in Queens, N.Y. This was back in 1992. I thought I’d eventually take over after my father retired, but it just wasn’t in the cards.

The office was cramped and chaotic. My father and his hygienist shared 650 sq. ft. with my mother, who managed everything from her desk with a single computer. Add this young dentist to the mix, and things heated up. When I tried to expand the business, my parents wouldn’t hear of it. I wanted to start bleaching teeth. It was a huge new market, but it was a no-go for them.

Building a Life in New Jersey

After three years of this, I was ready to move on. I was a husband and the father of a five-year-old child. We had a comfortable home in Brooklyn, and our daughter would soon be starting school. We couldn’t afford a private school in New York, and the public schools in the borough weren’t to our liking, so we started looking around. I was born and bred in New York, but I decided to cross the Hudson River and start a new life in New Jersey.

It was the right thing to do financially, professionally, and as a family. We bought a house in a Blue Ribbon school district, and I started to look for opportunities in my chosen field. I didn’t strike out solo right away. Setting up your own office is pricey, so I bought into an existing group practice.

The Road to a Solo Practice

It was quite the bargain at the time. I paid $150,000 for a share in the practice and the equipment that was already there. There were three of us and the previous partner was retiring for health reasons. He sold his stake to me because his medical issues were slowing him down. As a result, he was making four times less than the other partners.

After a couple of years, I’d tripled my revenues to match what the other two partners were earning, but this also tripled my share of the costs. Despite my higher gross, my take-home pay saw little growth. I was putting more into the practice than I was taking out. It was time to move on.

My next step was working for another dentist in the same area. I wanted to stay local because my family was thriving at our new address. I put out some feelers and was contacted by a colleague on the Peer Review Committee, the body that oversees patient complaints. I had a spotless reputation, and so he wanted me to work for him.

Once again, I went in on a part-time basis, but I moved to full time when he had a quadruple bypass, and stayed that way after his return. We made a good team, but I didn’t want to remain his employee, so I asked to buy into the practice. He made me an offer, but the financials were hazy. After my previous experience, I wanted everything to be crystal clear, and the lack of transparency made me nervous.

I decided to pass. He wanted about $400,000. I knew I could open a solo practice for that kind of money, and so I finally struck out on my own. 

Finding the Money for More

There’s a lot to be said for being your own boss. You reap all the benefits but you also bear all the financial burdens. I’ve invested a lot of time and money in my practice over the years. I took out a $500,000 note with a local bank to start the business. Everyone in the area knows them. I do all my home and office banking there, they hold the mortgage to our house, and I’ve been happy with them for years. All that changed a few months ago.

My practice has grown over time and my revenues are higher than ever. But there’s one problem: patients can fall behind in their payments, and insurance companies take forever to pay out. There are months when I make a lot of money, but I end up with negative cash flow because it’s all tied up in accounts receivable. At times like this, I still have bills to pay. I have supply, equipment, and staffing costs. I can’t withhold my employees' paychecks because my patients are in arrears.

Things came to a head a few weeks ago. I had almost maxed out my $50,000 line of credit with my bank, and I needed some wiggle room. So I asked the bank to restructure my debt and I applied for an additional note. I’m nowhere near going under, but when you’re in business for yourself, you need money to make money.

I’m not a credit risk, either. I’ve paid off 80% of that initial $500,000 note, and 50% of another $50,000 note I took out to finance equipment a couple of years ago. I had everything in order. I dug up my tax returns and my W9s, filed all the paperwork, and waited three weeks for the bank.

When my bank finally got back to me, they explained that their underwriters had looked at my practice’s cash flow. They weren’t confident about my financials, and so they needed my wife to cosign the note. I was flabbergasted. These guys didn’t understand the way my business operates. To make matters worse, they wanted me to violate my number-one rule. After that first disaster working with my mother and father, I had made it my policy to keep business and family separate.

A Financial Partner Who Understands My Practice

That’s when I turned to Bankers Healthcare Group (BHG). They’d sent me mailers in the past, but I’d discarded them all. However, their last postcard was still in a pile of recent mail, so I fished it out and took a look.

Here was a financial entity that understood my predicament. BHG specializes in funding medical and healthcare professionals like myself. They know all about the frustration of waiting for insurance companies and patients to pay up, and the way this can impact cash flows. They get that sole proprietors like me have to invest in constant equipment upgrades to compete with the bigger clinics. They understand the difference between short-term cash crunches and long-term sustainability.

The first big difference I noticed was the instant feedback. When I call BHG, someone always calls me back. I don’t have to send an email and then wait a week for an answer. Everything is immediate. I’d already done all the paperwork for my bank, so I forwarded my tax returns and my W9s to BHG. We then went over my practice’s history on the phone.  

A Thorough Vetting Process

I was impressed with how thorough BHG was. I mean, they did their due diligence. In fact, there was one tense moment when they hit upon a snag from 20 years ago. Back when I was starting out, I had sent out some direct mail advertising free dental exams and X-rays to new patients. It was a way of driving business, but without knowing it, I’d violated one of the advertising restrictions imposed on us by the New Jersey State Board of Dentistry. I’d neglected to put the value of the free services in my ad. It was a minor transgression, and the only blemish on my otherwise perfect record.

BHG was very accommodating, but they still needed to understand what had happened, and how it impacted my right to practice dentistry in New Jersey. I hired a lawyer to get the paperwork from the Board. Within eight or nine days, he came back with the details of my $500 fine, and an explanation that this insignificant infraction could not be expunged. He also provided paperwork showing that it had no effect on my credentials nor my professional capacities as a dentist.

While this was happening, BHG was in constant contact. They wanted to know what they could do from their end, but I told them to wait it out. I received an email with a copy of the Board’s original ruling at 9:30 a.m. on a Friday.

I immediately forwarded the document to BHG. They called me back hours later: My request for working capital had been approved. They explained the payment options and the processing fees. They even offered options so I wouldn't have to attach my primary life insurance policy to the loan. I was blown away. These guys were working at the speed that my business required.

Financial Freedom for a Better Future

I got $100,000 from BHG. Just under half of that went to paying off my line of credit at my bank. Another $8,000 was allocated to get my current accounts more caught up and zeroed out. The rest is sitting in my checking account as a cushion. I no longer have to worry that I can’t pay my bills or make payroll every Thursday because I’m waiting on a check from a patient or an insurance company.

I can also start thinking about adding a fourth room, or going back to school for some additional training. My next big expense is going to be upgrading the office computers. That’s another $10,000 gone, but it’s not that scary when you have $30,000 in your checking account as a contingency.

Throughout this whole process, BHG has freed me to focus on being a better dentist, a better boss, and a better husband and father. That is truly something to smile about.