By Jayme Amos. Get free updates of posts here
QUESTION: Can a new dentist with $400k in student debt get a startup dental loan?
It’s possible for you to get a startup dental loan.
For Dental startups:
STARTUP DENTAL LOAN APPROVAL HAS ZERO CORRELATION WITH FUTURE PROFITABILITY.
Some people don’t like when my team and I teach this. But it’s true for those who want a successful startup – so I’ll keep on telling people 🙂
THE TYPICAL PROCESS
Banks often approve dentists for startups NOT because their plan for a startup is likely to succeed.
Instead, many banks will approve your startup dental loan based on your PERSONAL ability to repay.
++ Be careful to understand that difference ++
It’s a gamechanger if you catch it.
Here is why that is BAD NEWS for you:
Banks know they’re going to get paid back EVEN IF YOUR STARTUP FAILS.
Banks don’t lend on your startup idea.
They lend on YOU.
They know that even if your startup FAILS, you’re able to go get a job at a dental mill. You’ll make just enough to pay them back while working at the other associateship. And it’s THAT truth that gives them the ability to approve you for your startup dental loan.
If that sounds surprising, you’re not alone.
In some ways, this is good news, because it gives you options.
But the DANGER Is the FALSE-CONFIDENCE banks give…because it can be financially lethal.
Dentists have been told to focus on the “approval” and it’s horrible advice.
Most banks don’t even ask for a business plan.
I’ve personally started and sold 7 businesses (most in real estate and finance, surpassing $1M). My team has been a part of hundreds of startups in dentistry.
How many of those had business plans?
Every. Single. One.
Does it work better with a rock-solid business plan? Heck yeah.
How many did banks require?
Not once would I have endorsed an idea to get half a million in startup dental funding without a Rock-Solid plan in place.
HERE IS WHAT THEY TELL YOU…
There’s an old “line” that Dental bankers like to use:
“The failure rate of dental startups is less than X percent”.
We’ll call it “truthi-ness”.
But if I’m being blunt, I would say that’s not really honest.
See, the way THEY calculate the stats is through a method that focuses on practices that literally go bankrupt.
They only count the ones who shut their doors.
They only count complete professional failure.
Of course, that’s one version of failure.
And it’s correct that level of catastrophe doesn’t happen very often.
BUT… here what they SHOULD track:
==> How many startup dentists need NO ASSOCIATESHIP in the first months after opening?
Because THAT is the topic that actually matters to your LIFE. Not their statistics.
Those “truthi-ness” stats give good dentists a false sense of confidence.
And THAT is why so many startups struggle.
Dentists with good plans, good skills and good intentions limp along in startup WAY too often.
WANT MORE PROOF?
I was flown in to speak at one of the country’s biggest dental banks. They asked my team to teach them our startup process.
The room was shaped like an indoor amphitheater, rising 6 levels high. While I presented, there were 3 people on the top left of the room who kept asking questions.
The questions were good, but they all focused on “fixing” problems for existing practices.
I thought this was so odd…because we teach how to avoid problems BEFORE opening.
I was so confused by their theme of questions
…so I had to ask…
==> What do you do at the bank that gives you this perspective?
Their answer will shock you.
“We work in the Special Assets Division of the bank”
“We’re the group who tries to save startups from going out of business when they’re failing”
They LITERALLY HAVE AN ENTIRE DIVISION THAT FOCUSES ON FIXING STARTUP FAILURES.
How can that be??
Especially when the “truthi-ness” of their statistics tells everyone the success rate is so high.
==>If that were true, why the heck do they need multiple full-time people in that division?
Do you get it?!?
If the truth matched the confidence from those stats, they certainly wouldn’t need that secret division.
** IRONY **
The acronym of that division is S.A.D.
You can’t make this stuff up.
** AVOIDING VERSUS FIXING **
Here’s the tough-love I need to tell people all the time…
With a startup its infinitely easier to AVOID problems than FIX problems.
You have an opportunity to AVOID the painful issues with a startup.
It’s the reason why I LOVE startups…and teaching dentists to become great entrepreneurs…it’s literally the best part of the whole process.
And THIS is why I tell people they need a Rock-Solid plan…even months before they start the process.
++ FINDING PATTERNS ++
You’ll find a pattern among those struggling startups:
their plans were based on someone’s advice who had just 1 or 2 startups of experience. Or worse, from a vendor who never really opened any.
See, WHAT WORKED for ONE colleague…in ONE town…ONE time…for THEIR demographics…and THEIR real estate market…and THEIR ideal patient…and THEIR dreams in practice ownership…and THEIR version of success…and THEIR version of fulfillment
…is not YOURS.
Just because it worked for THAT colleague ONCE…doesn’t mean it’s the right plan for YOUR future.
** OTHER COLLEAGUES WHO WING IT **
Just look at the countless stories of docs who “wing it” with their startup and spend years fighting to break even.
Go do a search on any dental forum or group and you’ll find those sad stories.
Or worse, many will tell you they wish they never fell for those “truthi-ness” statistics in the first place. The regret is palpable.
They take advice from people who have either never opened a startup or maybe have 1 experience.
Sometimes you’ll find a doc who was born with luck…that guy who nails it and it seems like they hit the jackpot without even trying. We’ve all seen that guy, right?
You can also play the lottery and win sometimes too.
But when it comes to your ENTIRE FUTURE CAREER…and providing a living for your family…and owning a practice that represents your values in your community…and makes you proud… there is much, much more at stake.
So HERE’S THE REAL ISSUE…
If you’re as associate and you’re considering a startup…or if you’re in dental school…”getting approved” for a startup dental loan is a very small priority…you need to focus on a ROCK SOLID proven plan.
==>This goes WAY beyond getting “approved” for a startup dental loan.
When the time comes, you’ll need the bank on your side…but remember to stay focused on having a hyper-specific plan that matches YOUR version of success.
Not that of a faux statistic.
Or from someone in another town.
Get YOUR rock-solid plan in place way before you begin…and way before trying to get approved for your startup dental loan.
Because when you do it the right way, a startup can literally be the most fulfilling part of your experience in dentistry.
Good luck on your journey!Check out our reviews at Amazon!