Value Added: Baltimore entrepreneur is at home with dental chairs and drills


David Charnowitz started DCDental when he was 20-year-old. Now 31, he has built a $50 million business selling dental supplies from chairs to bibs to drill bits. He's in his showroom / training center in Pikesville, Maryland on June 20, 2013. (Doug Kapustin/For The Washington Post)

Most people hate the idea of going to the dentist.

Not David Charnowitz. Dentists are helping him become rich.

At 31, the Baltimore entrepreneur has built a nearly $40 million business by selling stuff to the teeth doctors, from the feared drill bits that whirrrrr mercilessly into your molars — you know that sound — to the paper bibs catching the drool slopping uncontrollably from your numbed mouth.

Makes me shiver just to write about it.

Charnowitz has upended the traditional model of the dental supply business. “What we’ve done is taken a business that was done the old way, where companies send sales representatives to the dentist office to take orders, and we developed a model built primarily on telesales,” said Charnowitz, who has been nurturing this ugly-but-essential slice of the economy since he was 21. “We have a hybrid, where we gain efficiencies by taking the order electronically, but we still maintain face-to-face relationships with our docs.”

He is sole owner of DC Dental, which has 100 employees, $37 million in revenue and serves 8,000 dentists — mostly the mom-and-pops — throughout the mid-Atlantic region. Because he tries to undersell the competition, DC Dental is not a huge-margin business. Charnowitz nets a couple of million dollars a year, most of which he puts back into the business to pay for such things as inventory and infrastructure improvements.

Take a look at his growth:

2003: $1.4 million

2004: $3.4 million

2005: $4.7 million

2006: $8.3 million

2007: $9.7 million

2008: $10.7 million

2009: $16.5 million

2010: $20.5 million

2011: $24 million

2012: $37 million (two acquisitions that year)

Estimated 2013: $45 million

Charnowitz always has to have cash to keep buying the supplies that he sells to the dentists. He also needs cash to tide him over until the dentists pay their bills. He has a $6 million line of credit that he draws upon to keep the wheels turning.

DC Dental has turned a profit every year he has owned it. Although the profit margin is only 5 to 7 percent, he is growing fast and expects to reach $150 million in revenue within a few years. At 5 percent, he would be netting $7.5 million at that rate.

Even with that kind of growth, DCDental’s share of the $7 billion U.S. dental supply market is crumbs compared to giants such as publicly traded Henry Schein, which last year sold nearly $9 billion worldwide in medical, dental and veterinary supplies.

DC Dental is based in a 14,000-square-foot building in the Baltimore suburb of Pikes­ville that he bought for $1.375 million.

“I take a salary and a little bit of a dividend,” said Charnowitz, who lives in Baltimore.

So how did he get in the dental supply business? Let’s face it: It’s not one of the sexy businesses that people aspire to.

Charnowitz grew up in an entrepreneurial environment. His father was in the wholesale food distribution business on Long Island, but Charnowitz didn’t like the business model.

“It’s cheap items in big boxes that cost a lot to deliver,” he said. “There is spoilage and the margins suck.”

A friend who was in the dental industry gave him the idea of starting a dental supply company around Baltimore. Charnowitz liked the idea. He asked his friend to recommend some dental products that Charnowitz could try selling.

“My business is mostly little items that can be delivered by UPS that cost a lot,” he said. “Like diamond drill bits, composite, bonding agents. It’s $150 for a five [milliliter] bottle, which is the size of an eyedrops dispenser.”

Starting out slowly

There are 100,000 products in the dental products industry, and DC Dental sells a lot of them, from chairs to lights to precision tools and 3-D panoramic X-ray machines. The goods come from all over the world, including Germany, which is known for its precision instruments, and China, which is known for its inexpensive disposable products.

He started slowly, charging his credit card $1,000 for a list of dentists around the country. He spent another $1,000 to have a four-page flier made, listing his prices. He researched the prices of competitors online to find out what they were charging, then he charged a few dollars less.

He rented 800 square feet of office space. He hooked up the telephone wiring himself to save a few dollars. He found an accountant and an attorney through businesses in the same office building. Orders started dribbling in by early 2003.

Charnowitz said he has a leg up on competitors because it’s an industry generally not populated by business people who think outside the box.

Beating the ‘iron curtain’

The key to success is getting past what he calls “the iron curtain of the front desk” at dentists’ offices. To get face time with dentists, or at least put a catalogue in their hands, Charnowitz found people whom the dentists could not live without. “We hire service technicians and give them incentives to engender relationships with the dentist,” he said. The technicians are the repairman who fix the office equipment — from dental chairs to those suction vacuums — that are essential to keeping the office open for business.

“They breeze by the front desk. If a compressor and pump go down, the dentist can’t practice,” said Charnowitz, who has nine technicians on his staff. “They need the service tech right now. So the most valuable person to the dentist is not the guy selling him supplies; it’s the guy fixing the equipment.”

DC Dental also sponsors dental education seminars at its showroom and training center in Pikes­ville, ­where dentists can get the professional credits they need to keep their license. In return, Charnowitz’s marketers get one-on-one time with the doctors.

Because it doesn’t have big, one-stop clients, DC Dental grinds out its sales organically, day by day, getting its foot in the door, forming relationships and building on that. He tried growing through acquisition, but a big purchase of a California company ended badly with a loss of more than $2 million. He sold it back to the original owners.

He sees the road to revenue growth through deepening client relationships instead of adding to the 8,000 he already serves. In other words, he wants to sell his current clients more stuff.

Dentists buy on average about $2,000 to $2,500 in supplies a month, he said. DC Dental is selling his clients a fraction of that, so there is room for growth. If he could sell $1,000 worth of products to each of his clients, he would double his revenue.

One way is to introduce dentists to new technology that saves time. And for professionals such as dentists, lawyers and doctors, time is money.

“If a dentist can buy a widget for $500 that saves him 20 minutes a day, the dentist can increase his revenue.”

I asked him to give me an example, and I am sorry I did.

It’s a new type of forceps that pulls your tooth in a fraction of the time it has taken in the past. Pops the tooth out like a bottle opener popping off the cap.

Ouch! I told you I was sorry I asked.

Thomas Heath is a local business reporter and columnist, writing about entrepreneurs and various companies big and small in the Washington Metropolitan area. Previously, he wrote about the business of sports for The Post’s sports section for most of a decade.
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