Dr. David Okano answers questions about the career path he took after finishing his residency...

2005 Student Event: Scaling to New Heights in Periodontal Practice
STARTING YOUR OWN PRACTICE

Below is an interview with Dr. David Okano.
PhotoDavid Okano, D.D.S., is in practice in Rocky Springs, Wyoming. He completed his periodontal residency at University of Nebraska in 1985.

What is the most rewarding part of what you do everyday?

Hearing a patient say that their mouth feels so much better and they can now function once again, is the reason I keep coming to work. Appreciative patients remind all of us that we are making a difference in the lives of the patients we serve.

What was your plan after graduation?

I wished to return to my home town as there was not a periodontist in this community and the closest periodontist was nearly 200 miles away.

What made you consider starting your own practice?

Since I was going to an area where there were no other periodontists, I had no choice but to start my own practice from day one. Having my own practice was important as I wished to make the business decisions that I felt would be best for me. In retrospect, having a local mentor would have been helpful. However, in the true western spirit of independence, starting a practice for which I was totally responsible, was a positive move for me and fit my personality well.

What factors affected your plan and decisions about your career and future?

The ability to develop a practice with my practice philosophies was important to me. I did not want my referring dentists to tell me that “Dr. So-and-So does it another way.” I had the opportunity to groom my referring dentists’ expectations with my way of approaching periodontal treatment. The fact that I would have little competition, locally, was very appealing.

How did you begin the process of starting your own practice?

I spoke with all of the dentists in the area. I also sent out surveys asking if they felt that there was need for a full-time periodontist in the area and how many patients they might send per month. Other specialists were particularly helpful. Speaking with dental supply salesmen was also helpful. Many dentists felt threatened by a periodontist coming into the area while others were very welcoming. Many who said that they could use me did not turn out to be good referral sources. Others who were not sure (possibly due to their concerns for my being able to achieve success in a small rural area) have turned out to be great sources of referral.

What variables influenced your decision on location?

The biggest variable was the complete lack of a full time periodontist in the area and the fact that the closest periodontist was 200 miles away. I also had a strong desire to return to my home state of Wyoming since I enjoyed the outdoors, rural lifestyle and wished to be close to family.

Did you meet with an attorney, practice consultant or accountant before pursuing a loan? Why or why not? What did they do for you and why was it beneficial?

I spoke with an accountant to help run numbers in preparation for a meeting with my banker. The attorney reviewed my lease agreement along with a proposed informed consent form. All of their information was helpful. What I was not prepared for was the federal regulations that affect all of us as business owners. ADA materials would be helpful for these concerns (i.e. OHSA, hiring and firing of staff, Americans with disabilities, etc.).

How did you determine the financial requirements for starting a practice?

I made my best guesses on what I needed to begin a bare bones operation with one operatory. I tend to be fiscally conservative and prepared a personal and business budget for the first year of practice. Meeting the debt service of my student loans, practice loans and providing the basic living necessities determined how much I was willing to invest in the start of my practice.

How did you obtain financing?

My local banker was very willing to finance my start up costs. I had dealt with the local banker since my teen years, so it was easy to obtain financing, though my father had to co-sign with me.

What risks were involved in starting your practice?

The biggest risk was wondering if dentists would refer to a local periodontist since most referrals were made to an out of town source. I would sink or swim and I would know very soon if I would survive. There was no pattern of referral that I would move into so I had to be sure that everyone in the region knew that I was now around. Fortunately, in a small area, everybody seems to have an awareness of who is around and they knew that I was now around.

How did you assess and manage those risks?

Meeting and speaking with dentists was important. I went to local and state dental meetings and became involved. I believe becoming involved with organized dentistry was the single most important method of keeping my name in the eye of dentists. Organized dentistry activities have continued to be important to the health of my referral patterns. The issues I have dealt with on behalf of my fellow dentists have benefited general dentists far more than me personally as a periodontists. The general dentists recognize that what I do benefits them and I have developed strong loyalties as a result.

What is your situation now?

I continue to be the only periodontist in the area. The practice has been stable. I feel I have made the right decision for me by opening my own practice. Being fiercely independent allowed me to have the right mindset for starting a practice. However, I recognize that my isolation has also limited my ability to speak with peer periodontists who could have helped in the development of my business.

What financial issues or considerations came into play when planning for the future?

As the practice grew, I would then equip more operatories and add additional equipment. Small loans were taken out as necessary over the first five years of practice.

Using real or fictitious numbers, how did the realities of your finances compare to the plan you originally outlined?

The numbers were about as I expected. It was a relatively slow development over time.

What resources (i.e., people, publications, groups) did you find the most helpful?

Dr. Wayne Kaldahl at the program I trained under in Nebraska was very helpful. He had just left private practice and we would spend hours talking about his experiences (both positive and negative). He made many excellent recommendations. Also, a fellow periodontist in Wyoming, Dr. Richard Dayton, was extremely helpful in anticipating what it would be like to deal with referring dentists in our area.

Given what you know now, what might you do differently?

I would have looked at possible associateships and practices for sale. I am not saying that I would have not established my own practice, given the choice again. However, having the opportunity to observe other established practices would have been helpful. Knowing what was successful or not successful in other practices and seeing business models, observing staff interactions and looking at the physical layout of dental offices would all have been beneficial as well.

What suggestions do you have for individuals considering starting their own practice?

Look at all available options, be they associateships, independent practices, buy-outs or starting your own practice. There are so many options available that one should check out all opportunities. Be sure you are willing to take on the debt and responsibilities necessary to starting a practice. I have thoroughly enjoyed private practice and have been blessed to have the opportunity to start my practice. However, there is a lot of hard work, time commitment and financial sacrifice at the beginning. Quite honestly, there are probably easier ways to start your career. If you are willing to make the sacrifices at the start and like the ability to make your own decisions as to what you feel may be best for you, then starting your own practice may be the way to start your career in periodontics.

What was your biggest mistake starting out?

Not starting a retirement account early is now viewed as a mistake I would like to have corrected. It was too easy to spend on things you had to wait on while in school, be they professional or personal expenditures. It would have been much better to have stated a retirement plan much earlier. I am now in the process of trying to catch up. It would have been better to have paid into a retirement plan early rather than to have put so much emphasis on paying down loans earlier. Of course the tax laws are different now and there are better plans available to the solo practitioner at this time than several years ago.

How many employees do you have?

I have twelve on payroll, but I would only consider four to be full-time. I would probably estimate I have the full-time equivalents of two dental hygienists, two business staff and three clinical staff.

What is the most important thing you have learned about managing people?

Everyone has unique needs and they are each different in their own ways. Each person brings characteristics to the office that are different. Placing an individual in a position that best suits their personalities and strengths can be challenging, but will benefit the practice when placed in the proper position.

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