Apples to Apples: Benchmark Your Growth – Ep. 290

Welcome to the Accumulating Wealth podcast. I’m Hunter Satterfield. And I’m Judson Crawford. We’re CPAs, wealth advisors, and partners at Cain Watters and Associates, a financial services firm here to help you navigate the decisions you face every day. Today, we’re diving into our new dental practice comparison report and what the latest numbers are revealing about the state of private practice dentistry. 

From profitability and overhead to broader performance trends, this comparison gives dental practice owners a clearer picture of where they stand by specialty and practice size. And joining us today is a special guest who will walk us through the new report. Let’s get into it. 

We have a very special guest. She’s been on the podcast before. She’s one of our long-term financial planners here at the firm and she actually is my mentee. Welcome Angie Svitak. I think you said that wrong. What? We clearly know each other very well. Oh, oh, oh, sorry, guys. One of my favorite people at the firm whose name I know oh so well, Angie Svitak Thanks for having me, y’all. 

Hey, more importantly, Angie, congratulations on your brand new graduate. Thank you. Yeah. So you want to tell people where your kiddo’s headed off to? Or your oldest, is your first one? Absolutely. Got two boys just finishing up sophomore and senior in high school, and my oldest, Ethan, will be heading off to Rocky Top in Knoxville, Tennessee in the fall. 

That’s pretty exciting. The wrong UT, but that’s fair. It’s good enough. I don’t know that it’s wrong or right. It just is. 

Can you remind listeners what role, I mean, Judson already mentioned financial planner, but what role you serve here, and then also how long you’ve been with us? 

Absolutely. So, I’ve been with the firm for going on, I think it’s about 12 years now. Absolutely love it. So spent about 12 years in public accounting industry before converting and coming over to the best side over here at Cain Watters and really enjoy helping walk our clients through their financial path and journey to get them on the way to success in retirement. 

Your first firm was like UT Knoxville, and this is UT Austin. I think we know who the real UT is. 

All right, Judson, let’s go. Okay, Angie, you’ve been involved in the How Does Your Practice Compare? Report for a while but many of our listeners may not have ever seen it or understood what it is. So, can you give us a little bit of background on exactly how we come up with this and what it is? 

Our accounting department does quite a few books for our clients every single year. And we found that as a result of that, we can get really clean, timely, and accurate financial statements, which allows our clients to be able to better utilize them to make decisions for their practice. 

By doing so, we have comprised over 500 practices to come up with this data in the How Does Your Practice Compare? Report. This allows us to really utilize accurate numbers that we can compare our doctors’ practices so that they have something to compare apples to apples. 

If you start pulling industry averages from your average ADA practice, it just really isn’t the same as the upper-level practices that we work at here, and so having really accurate apples to apples information is super important. 

Lots of apples. What’s interesting to me is, again, when we go back before we had this report, for example we had these ranges. Oh, staff should be 20 to 24%. Back in those days it was like lab cost could be 12 to 14%, whatever it is. And over the years as we’ve done this report, being able to watch trends change has been so powerful, for not only us as planners, but for our clients.  

So Angie, can you tell our listeners, like, how do you use this on a day in, day out basis when you have clients in the office? 

Super important. So, when we’re looking at the financials, I want to make sure that I’m looking at not only my client’s financial trends year over year, but really comparing it to the How Does Your Practice Compare? Report. 

And having this data allows us to take a deeper dive to see not only by region what’s going on with our doctors when I’m looking at their numbers, but looking nationwide and getting a broader picture so that way we can talk through what are really the – not only the macro levels that are going on, but more the regional data through there and how the things might change. 

And sometimes, you know, benchmarks are benchmarks, and sometimes they are what they are. So, the important piece to understand is comparing yourself to the benchmark, but then understanding why you may or may not be different, right? Just because you might be higher than the benchmark in one area doesn’t necessarily mean good versus bad. 

Sometimes it’s a product of maybe I’m a heavy in-network practice versus more fee-for-service. So naturally, your staff costs are going to be higher than the benchmark. So, it’s just important to understand what you’re comparing to and then why you may or may not be different. 

Yeah, I appreciate you asking me the question, Judson. So I’ll answer too. Exactly what Angie said. No, I actually think I love it because it’s a conversation starter. To your point, Angie, this means that there are people above this number and below this number, right? Or else it wouldn’t be an average. Not everybody’s going to be at the average or below. 

And so, Judson, I think from my perspective, I use it as a way just to guide conversations and to talk about where they’re seeing streaks in their businesses, where they’re seeing weaknesses where we might have opportunities understanding, oh yeah, like, I’m high here. I’m always going to be high here. 

 I think about the example of a single doctor GP that I have that, he took one practice and he merged another practice in. And when he did that, we did so knowing, all right, our staff cost is going to be really high, and we’re now going to slowly work our way back to this average, right? 

And we did it with natural attrition. We did it with some small moving pieces. But again, it’s just a way to sort of give doctors and business owners goals that they can achieve for that next 12-month period. 

Yeah, absolutely. And Angie, why don’t you talk a little bit about how each of these practices are laid out in the report? Because one thing I always talk about when we talk about this report is when our clients come in, we often configure their financials to the way we like to see it, which is the way it is in this report, so that we can actually compare all of these apples. We’re going to talk about apples before this episode is done. 

I think, but, you know- Top five, bottom five, Angie. Hey, Judson, let me ask a question. What’s your favorite apple, and why is it the Pink Lady? It’s not- Okay, that’s for another episode. Recently, it’s Cosmic Crisp. Worst apple is the Red Delicious. Agree. Oh, yes. Smushy, gross. A mealy Red Delicious. Why is it even an apple? No. Like, it’s just, it tastes like cardboard. Not delicious. Okay, more like a crapple. 

So I’d love to hear this answer from you, Angie, because one of the things that we talk to clients about is like the numbers that you’ll see in this report, listeners, they’re not going to include associate doctor, right? 

The salary number excludes that and doctors are like, “Oh, you have to move that up. That’s a part of my overhead.” I’m like, “Yeah, it is, but I need to compare, again, apples to apples across the board.” So I mean, maybe talk a little bit to Judson’s point about how it’s constituted and made up so that we can use it well when we’re looking at it. 

The first… There’s probably two main things that I love about it the most, and one is that it’s before doctor comp and prior to the really the doctor discretionary expenses. I kind of refer to them as the squishy stuff, right? So it’s a little bit more in the gray area, things you can substantiate as business expenses, but they’re really not true operating expenses that are necessary to run your practice. 

So this allows us to be able to compare other practices like yours and looking at true overhead and how your profitability compares to those around you. And I guess really to piggyback off of that some more, we all might pay our doctors different levels, so compensation may come into effect when you’re looking at what to pay yourself for pension-related purposes. 

Or one doctor may have an associate doctor that is new out of school, and so they’re on a flat salary versus another practice is going to pay theirs based on a percentage of their production or collections. And so because of that, it really negates us to being able to look at them evenly across the board, apples to apples, if you will. I knew it was coming. 

So looking at these financial statements and truly the overhead and the profit and loss before doctor comp and before the discretionary expenses really allows us to have that true comparability. The other thing that I like to look at is that we have formatted these based off not only specialty, but practice size. 

Because we get lots of questions from different practices and doctors relating to, “Oh, I want to open a second practice or a second location. Like how does that affect me?” And really understanding this is true numbers of so many different practices that prove the point that more is not always more, right? 

Like sometimes it’s just making the best utilization of the current space that you have, and that allows you to increase your profitability because you can see like a one doctor versus a two doctor or a three doctor practice and how that profitability increases just by staying and maintaining with the overhead because your fixed expenses remain fixed to a certain extent. 

While you might increase staff salaries and some of your other dental supplies, labs, et cetera, it allows you to really maximize the profitability of growth by having additional doctors within that practice. 

Yeah, to put some numbers to that, it’s sort of interesting. We look at this often, but the single doctor general dental practices net around 38% in this report. The two-doctor, 45%, the three and over, 47%, right?  

And that, that I think is what you’re talking about because the fixed costs stay the same from a dollar amount, more or less. But I’ve always said this, Judson, and I love this about, we talk to doctors about, hey, maybe you’re going to go add a doctor or add a location. 

Direct cost scale. Like, the direct cost, Angie, doesn’t change from a single-doctor practice doing $1.4 million all the way up to these big mega practices doing four or $5 million. Direct costs are 40%. Like, that just is what it is. There’s no change that you can have there. There are no economies of scale, right? It’s a helpful way to use the report as you’re thinking about that next step for your business from a vision standpoint. 

Yeah, I think the other thing that, and we’ve heard feedback on this from our ortho reports and our pediatric reports and this report as well, is that sometimes it can feel daunting as a practitioner. 

You go in here and you find your comparable practice, and you look at the top line, the collections or the gross receipts, and you go, “Oh my gosh, like, I’m not even near that.” And you almost want to put it away at that point. And we would say, please, don’t do that because, again, it can help you so much from a cost standpoint. 

But what it made me think about was, is that there’s a lot of takeaways just from the top-line collections that I think our listeners need to think about, right? If you’re not at those levels, it kind of gives you a guideline of where you can go, right? I think the other thing is that it’s interesting to see how our two and three-doctor practices scale, right? 

Because you can see how adding providers can add to that top-line amount, almost doubled, as you would expect. But I would say more importantly is, if you are getting to these ranges, if you’re a one-doctor practice and you’re getting to that, $1.4 million, $1.5 million level, and you’re still growing, I think that’s when you may need to start thinking about is it time, for me to start thinking about bringing in that second practitioner? It gives you a really good numeric base to start making some of those decisions. 

And I think that’s really important to look at, especially when we talk about the scalability, because I tend to focus more on the percentages rather than dollars, right? So, if we’re looking at production for a doctor or hygiene, what can we do to maximize that productivity amongst the providers?” 

Because your fixed expenses are fixed. So really for every – and depending on whether it’s a doctor versus hygiene, any increase in your top-line production and collections is going to be roughly 85%, if not higher, right? So, if I collect $100 more, then I’m keeping about $85 of it as profit, which is huge, and that’s the important piece of being able to scale with an existing facility. 

And then also just adding more providers. And I think people get scared about bringing on an associate or adding that extra hygiene, and it’s like, “Well, you know, Angie, I don’t know that I have a full schedule to add an additional hygienist.” And we walk through what it means to have a break even, and this really helps to see, okay, yes, you’re going to have to cover their salary and their payroll taxes, but what other expenses do you really have to bring that hygienist on? 

All right, it’s dental supplies of roughly 7%. Easy. So now everything that we do above that, once we’ve covered the baseline comp for that hygienist, which generally is covered with about a half a day’s worth of patients, anything above that is literally 93%. 

Yeah, the general dentist one doctor practice in 2025. Net income is $550,000, okay? The general dentist two doctor practice, the net income is $1,150,000. So, it’s exactly double, right? I mean, they’re basically… Well, that makes sense. But then go to the very top of the page. 

In order to create double the profit, the one doctor practice did $1.5 million, the two doctor $2.5 million. So, it didn’t double collections, but it doubled profit. That’s exactly what you’re talking about, Angie, is those efficiencies you can gain as you scale. Now, it comes with additional risk and sometimes additional cost and additional headache at times, but that opportunity can be really, really nice. 

Judson, from your perspective, you mentioned this earlier, but, like, how does that conversation then go for you? Like, if you’ve got that general dentist that’s at the $1.5 million and is like, “All right, I’m stressed out, I’m working too much,” and you say, “Okay, do we need to consider a second?” What does that conversation look like? Just walk us through it. 

Well, I think when you’re looking at adding a doctor, and I think this can go really into any specialty you’re talking about, again, especially if the client is talking about how their schedule is stressed, maybe they’d like to take a little bit of time off, whatever it is. 

I think you have to start talking about, “okay, what do your new patients look like? Do you feel like those can be expanded?” Because if you bring in another doctor, you do want those new patient numbers to go up. Is it hard for you to get reappointments in, or is it hard for you to get new patients in? 

And I think that some of these questions when you have a doctor that’s naturally getting up to that point where they’re producing at a high level and they’re naturally exhausted, a lot of these answers are going to be consistent, where it’s like, “Yeah, we probably could do that. Yeah, we could probably do that.” 

And you’re almost helping the client see naturally that it probably is time to take that next step. The hard thing is, as we all know that in an ideal world, we’d add that next practitioner one day at a time. That’s also not realistic. 

To find that is like finding a unicorn. And so, you often do have to take the risk of adding somebody three or four days a week at the beginning. And a lot of times then the next step, Hunter, that I take is helping them to see what a break even looks like on adding that doctor’s salary because for the same efficiency reasons you guys have been talking about, most of my clients find that they have to add less production than they think in order just to pay for that. 

Agreed. And if you’re an associate or a new grad listening to this, I want you to just, again, listen to what Judson just said. When a doctor adds you in three or four days and it’s brand new production to that business, that doctor is losing money on you, right? And it’s a risk that that doctor’s taking. 

And I think back to what our client Luke Bailey said about when you first get out, work for the best leader, and you’re taking a risk in coming underneath this doctor. But that doctor that’s bringing you in is taking a risk that this production will get added, and oftentimes it costs him or her money upfront. 

But at the same time, the potential opportunity, Angie, and what we can see in the numbers is tremendous, right, for, for everybody, right? But what it means is there are going to be sacrifices for you as the doctor that’s coming in that, yeah, you might have to wait to become an owner, and when you become an owner, you might pay a higher price than you would’ve thought. 

But think about all those risks that that doctor had to do to bring you in. Ultimately, though, the boat lifts for everybody, right, Angie? 

Well, I think that’s a great point, right? And so, as you’re a new doctor coming into a practice that doesn’t necessarily have a full schedule for you, use that to your advantage. 

That means that you can take the time to really learn to do it right and hone in on those clinical skills and really take the mentorship and all that you can that comes with that senior doctor. And so that way, that ultimately ends up with you being a better clinician but also understanding the soft skills that come with talking to patients. 

How do we get treatment acceptance? How do we convert these patients into production that goes onto the schedule? Which, as we continue to go through this conversation, is a little bit more of a common theme, especially given some of the economic factors that we have going on around us. 

Yeah, one other thing I thought was interesting as I was looking through the report is when you look at the one doctor practices year over year from 2024 to 2025, we consistently see an increase in collections. 

When you start to get up in the two and three plus doctor practices, we did see a few specialties where the collections went down year over year. And I think that there’s a story behind that other than, “oh they just couldn’t see the number of patients” or “they had more patients say no.” Because when you’re talking about these practices that are, two, three plus providers, we could be talking about practices that once were one doctor and went to two doctor and they’re still catching up their production. 

Or there could be a practice that simply lost a provider during that year. So I think the story is bigger and we can have more variance in those multi-doctor practices other than just, “oh, they’re doing poorly.” 

Okay, Angie, I want to double click a little bit more on what you said, too, about the economic things, because we did see some margin compression a little bit in the report from 2024 to 2025. 

Is that correct? Correct. So really what’s we’re seeing, and this is also coming across in all the conversations that we’re having during our consults as well, is that patients are definitely becoming a little bit more conscious of cost, right? And rightfully so. We’ve seen increased inflation. Right now, we’re at 3.8%, which is year over year come April. 

Gas prices on average have continued to go up, so national average of $4.43, and then on the coast that goes up even higher. And so, then you look at the grocery store. Okay, so here we go. Quick little quiz for y’all. Ooh. Okay? A guest bringing a quiz. I know we like quizzes. All right, quiz time. Who’s ready for a question? 

We are. All right. Grocery price trends. Okay.  

Chicken, up or down? Up. Up. From last year. Up. Down. Really? Yes. Slightly. Why, Angie? I don’t like this game. Slight decline. We’re wrong already. We want to know why. 

Eggs, up or down? Definitely up. Down from last year. Damn it. I was going to say down, because chickens. 

Milk, up or down? I don’t know. Well, they don’t come from chickens, so I’m going to say up. Yeah, up Stable. No, they don’t live in a stable. Trick question. 

All right, beef. Who wants beef? Way the hell up. Way up. Beef is freaking expensive. So significant increases. Do you know how many burgers two teenage boys can eat? A lot. Oh, my word. 

Okay, so herd sizes are at all-time lows over multi decades. And really what happens is, and we joke about this, right, in terms of the cost of expenses and groceries, but yes, like, we all have families, we’re all trying to buy groceries. Everything’s a little bit more expensive. 

So, the key takeaway that I took from looking at some of these economic factors is honestly, it comes down to personal choice, right? If somebody is a family and they’re choosing to buy beef, you’re spending more at the grocery store. If you’re buying chicken, then you’re spending a little bit less. 

So really what this means is that patients are choosing where to spend their money. So, it becomes even more important for the practice, and everyone involved to be talking and being on the same page when it comes to the value of the treatment that they’re providing, right? 

Like, we’re trying to get the patient to say, “Spend your money here instead of there.” So really honing in on the value of what you’re doing and the clinical skills, and honestly, more importantly too, what the negative impacts and the consequences may be for the patient if they don’t move forward with treatment. 

Yeah, and these are just numbers, Judson, from 2025. I mean, we haven’t even incorporated what’s going on in 2026 as well. And I think again, that’s – listeners, as you’re going through this report, it’s all about themes, right? It’s about these bigger themes and how you can use it. And so, I always encourage doctors, don’t just focus on your specialty or just general dentistry if that’s what you are. 

Actually go through the whole report and look at all the different specialties that are out there because I think they kind of all go in conjunction with each other.  

Absolutely. Angie, what other big themes did you see in this report? 

Well, I think it’s no surprise that staffing continues to be a challenge, right? 

And so elevated levels of salaries as a percentage of collections is consistent. And we expect that to continue to increase, especially finding it difficult to find hygienists. And, interestingly enough, I have a client in California who put ads out for $100 per hour and still didn’t get any bites. Insane. 

So really the area that you’re in – and all these people are talking, right? They’re on different feeds together, social media, having conversations. So really trying to overcome that staffing challenge can be problematic. 

Well, it’s interesting. You talked about showing the patient the value in what you are providing to them, and I think that goes along with the staff as well, right? 

You can’t pay 20% below average price and expect to get staff. But what you can do is make sure that your culture is good for your staff, and you can bring and make sure the staff is brought in to that value conversation that you’re providing your patients, because that’s where people are going to take the passion from their job from that goes further than just that dollar amount. 

And so, I think it’s important. And Luke Bailey actually talked about that as well on his podcast, so if you haven’t listened to that one, go back. 

Well, it also comes down to, I think, standard of care. And so sometimes I hear from my clients that, “Oh, the front desk is saying things that is contra to what we’re telling the patient in the back.” 

Or they tell the patient, “Oh, well, I know the doctor diagnosed two crowns, and that’s really expensive, so maybe you just move forward with one.” And so instead, try reframing the conversation with your front desk and the rest of your team to say, “Hey, if you are really trying to put your patient first, then you should be focusing on the importance of the treatment,” right? 

The doctor’s not going to diagnose two crowns if the patient doesn’t need two crowns. So, reframing what it looks like from the patient side of things and them thinking that they’re helping them by putting off a crown is not necessarily what’s in the best interest of the patient. So really trying to make sure that the team is on the same page and that there’s a vision and a culture for the practice as a whole is super important. 

Yeah, I think there are so many little things that we could go into this report that we don’t really have time to today, but I think that, Angie, you’ve done a great job giving us some of the big themes. And we can’t recommend enough that you guys go out and download this report and use it for your own benefit, because I think each one of you individually will find something different that can help your practice out. 

 So once again, if you want to download this, you do that at cainwatters.com/hdypc. How Does Your Practice Compare? 

Angie, that was awesome. Thanks for joining us. Happy to be here. Let’s go eat some apples. 

All right, Judson, one question before I do the closing. You ready? Yes. What is your favorite party board game? 

Party board game? Risk. My parties are boring. I don’t know any party board games. Beer pong? What is considered a party board game?  

Apples to Apples. Oh, geez. Ah. 

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That question was crapples to crapples.