Adding an Associate: Up Goes Profit, Down Goes Overhead

By Chris Sands, Pro-Fi 20/20

You can afford an associate, and we can prove it.

Being that we are a growth-focused firm, we encourage nearly all of our doctors to duplicate themselves with at least one associate doctor. Naturally, we are met with resistance from some of our clients that insist they “can’t afford an associate.” Recently, I had a doctor reach out with that concern, but with an interesting perspective.

Here’s what the text said: “Right now, I’m running with an overhead of 65%, how am I supposed to pay an associate 35% if that’s all my profit?” Admittedly, framing the numbers like that does make an associate sound scary, So I was forced to break it down for him.

For the sake of example, we’re going to use the 65% overhead and 35% profit from above. Let’s say you bring on an associate that produces $800,000 annually. Paying them 35% results in $280,000 in salary. Add in two new dental assistants to support that doctor with a total annual cost of $80,000 between them. With an average lab & supply expense of 15%, you’ll have a new expense of $120,000.

$800,000 in new collections
– $280,000 in doctor salary
– $80,000 in dental assistants salary
– $120,000 in labs and supplies
= $320,000 in NEW Profit

By bringing on an associate doctor, you can drive your overhead down and drive your profitability up. So instead of asking “Can I really afford to hire an associate?” maybe you should be asking if you can afford not to.

Find a YouTube video with more info at https://youtu.be/L0228lHWKEk.