The Power of Plateau – Why Bigger Isn’t Always Better

At Practice Financial Group, our goal is to help good people live their best lives and make a difference for good in the world. We do this by helping private practice owners—who are generally good people—keep more of the money they earn, grow the money they keep, and simplify their lives. Every piece of advice we give, including every blog post we write, is with this in mind: how can we help our clients live better, more fulfilled lives?

With that as a backdrop, and now with dozens of years of collective experience and hundreds of clients to help inform our views, I want to challenge the common misconception that bigger is better for your dental practice. If it’s your primary goal to forever grow your practice, there is a high likelihood that your quality of life will suffer and, ironically, you may end up making less money. The goal instead should be to get your practice to a sustainable pace and then to “plateau” (or as I prefer to say, “maintain”).

 

Case Study of the GOAT:

Over the years, we have been blessed with many exceptional clients, most of whom are excellent clinicians and people. Among this group, we have our All-Stars, but there is one who is clearly becoming the GOAT of the group. This individual would fly under the radar at any dental class reunion, but when he walks in, he’s typically the wealthiest guy in the room.

Years ago, I explained to this client that the goal for his practice should not be to grow forever, but to get to a sustainable pace and keep that pace for as long as possible. Below is a chart of his growth over the last 10 years:

The “Op Income” is the Operating Income of the practice (Collections – Overhead); this is the doctor’s salary. “% Growth” reflects the year-over-year growth in Operating Income. You’ll notice that there were years of growth (2014, 2018, 2021, and 2023), but also years of decline (2020, 2022). During this 10-year period, the average annual growth was merely 3.6%, which barely tracks inflation!

Again, though, the goal for his practice was to get to a sustainable “sweet spot” pace and to keep it, not to grow forever.

The Trap of “Biggering”

“Biggering” a practice involves structural growth—adding facility space or doctors—either to meet patient demand or to satisfy the founding doctor’s appetite for more. Too often, this results in more stress, more staff to manage, more responsibility, longer hours, more burnout, and fewer profits.

Examples of Biggering:

1. A doctor has a 4-op practice, maxed out at $1,400,000 of collections with a 45% overhead (keeping 55% of collections). To allow for growth, the doctor plans for a new 8-op building.
2. A bustling $2,200,000 practice nets the owner well over $1M annually, but patient demand is so high that the doctor adds an associate, 2.5 more hygienists, 2 more assistants, and 3 more front desk staff. To ensure the new doctor stays busy, the practice doubles down on PPO plans, deeply discounting their work.
3. A four-doctor (three are owners) specialty practice projects $7.6M in collections for 2024 with 42 employees and two locations. Despite their large operation, the owners were disenfranchised when I showed them they were making $500,000 or more less than many other doctors with simpler business models and less collections!

 

The Sweet Spot

Every dental practice has a “sweet spot”—the optimal amount of production to achieve the highest level of profit without Biggering. When operating in this sweet spot, profits and simplicity are maximized, while management headaches are minimized.

Growth isn’t inherently bad, but when growth becomes the primary financial objective, many doctors fall into the trap of Biggering for the wrong reasons. This often leads doctors to be less happy and less profitable.

 

Finding a Sustainable Pace

The pace a doctor works refers to the number of columns run, patients seen in an hour, hours worked in a day, days worked in a week, and weeks worked in a year. This is the dentistry version of running—your “pace” is how fast you’re working. To maximize lifetime production and income, you need to run at a pace you can sustain indefinitely. If you’re burning out, you’re likely working too fast.

 

Plateau: The Ultimate Goal

The healthiest, wealthiest, and wisest doctors work at a pace they can sustain indefinitely, within the sweet spot of the practice, and without Biggering. These doctors are no longer focused on growing collections but maintaining a sustainable pace.

Over my 17 years of working with dental practice owners, I’ve observed that as collections grow, the doctor’s income, quality of life, and happiness (collectively, their “well-being”) also grow… to a point. As collections continue to grow beyond the “Sweet Spot,” well-being levels off, and further growth often causes well-being to decline.

The graph for this phenomenon looks something like this:

As collections continue to rise:

• Profits will increase until the owner doctors reach their “sweet spot.” Beyond that point, profits often plateau or decline.
• Happiness also increases, until it too levels off and begins to drop. Some common reasons for this decline include:
  • More responsibilities or headaches.
  • More work for the same or even less pay.
  • Burnout.

This highlights the importance of understanding the limits of growth and maintaining balance within your practice.

 

 

The Costs of Biggering

When a practice grows past the sweet spot, doctors typically experience:

• Busier and more hectic schedules
• A need for more employees (and the management burden that comes with them)
• Increased physical space requirements
• The challenge of recruiting, hiring, and managing associates
• Higher risks of employee turnover
• Increased tax burdens, with 37-50% of profits lost to taxes (depending on the state)

 

Consider this comparison of three real practices.

As you study the numbers, ponder these questions:

• Which of these practices sees more patients in a day?
• Which of these practices has more employees, and therefore the heavier management burden?
• Which of these organizations is more difficult to operate?
• Which of the owner doctors makes more money?
• One of these three doctors works 3.5 days per week and takes 8 full weeks of vacation—try to guess who it is!

 

These are three well-run practices. Practice #3 does not have a management problem, it is simply revealing a phenomenon we’ve known for years but few people will say: Dentistry does not scale well, and Biggering often leads to both diminishing returns and quality of life!

 

What is the main financial goal as it pertains to the practice?

Growing your annual top-line collections should not be your main goal! The main financial goal should be to maximize your personal lifetime production, and to do this in the most profitable way possible. You should build your business to be the necessary support system around you to allow that production to happen and find a sustainable pace and keep it. If you “run” too fast, you’ll burn out. If you grow your business beyond the structure that you can do, the complexity and responsibility will increase but your income may not. The most profitable doctors will intentionally not grow their practice beyond what is needed to support their production.

A practice will naturally grow because of these things, none of which require Biggering:

• Increased speed of the doctor over time.
• Increased clinical capacity of the doctor over time.
• Increased ability of the doctor to delegate nonclinical functions.
• Increased fees charged due to the doctor’s increased skill level and demand for her work and inflation.

 

Wealth Beyond Money

Years ago, my cousin Tanner Cropper shared wisdom from a friend: “In my career, I’m going to be rich with time!” At the time, I was dirt poor with time. My focus on income growth left me impoverished in discretionary time.

We’re wise to remember that wealth comes in many forms:

• Money
• Time
• Simplicity
• Peace of mind
• Health
• Quality of relationships, especially marriage and family
• Spiritual power

These forms of wealth interconnect deeply. For example, prioritizing simplicity and relationships might reduce stress, which in turn improves health and peace of mind, amplifying your overall well-being.

Dentistry is a unique profession where you can have it all—but only if you avoid the trap of Biggering. By finding and plateauing in your sweet spot, you can enjoy financial wealth alongside other forms of wealth that lead to a fulfilled life.

 

When Is Biggering Appropriate?

There are exceptions when Biggering can be beneficial:

• You want an associate doctor and value the camaraderie or mentorship opportunities. For instance, you might find that mentoring an associate invigorates your passion for dentistry, or sharing responsibilities allows you to focus on more complex cases. Evaluating the benefits of Biggering should involve assessing whether it aligns with your long-term goals, such as reducing your workload or diversifying the practice’s capabilities.
• Your current facility significantly holds you back.
• You dislike your current workspace so much that moving to a better facility is worth the added complexity (although this doesn’t have to be a “bigger” facility 😊)

These exceptions require careful consideration, as the risks of Biggering often outweigh the rewards.

 

Conclusion

Building a profitable practice is hard; sustaining that profitability over a career is even harder! The wealthiest doctors in both money and quality of life keep their practices simple, grow to their sweet spot, and sustain that pace for years. Yes, they plateau.

To maintain a high quality of life, satisfaction in your career, and to avoid burnout, resist the allure of Biggering. Instead, plateau intentionally. By doing so, you’ll not only enjoy greater well-being but likely achieve greater financial success in the long run.