Buying vs. Starting a Dental Practice
February 19, 2022
You’ve finally finished dental school—congratulations! It’s now time for you to begin changing smiles and lives; but where are you supposed to start? Many new dentists wonder if they should focus on buying an existing practice or opt to start their own from scratch. Both options have the chance for success or failure; but which is the best route to pursue? Keep reading to learn about some tips and considerations for each option so that you’re able to make an informed choice that you feel confident about.
Purchasing an Existing Dental Practice
If you’re interested in purchasing an existing dental practice, it’s important to distinguish the different practice styles: insurance-driven practices, fee-for-service practices, and blended practices. Insurance-driven practices participate in many different insurance plans, meaning that there is usually a high volume of patients, a larger staff, and profit margins that are often tight. Fee-for-service practices don’t participate in insurance plans, and the cost of care is agreed upon by the dentist and the patient—this usually means it’s a smaller, more intimate practice, which some dentists and patients greatly prefer. Blended practices combine characteristics of fee-for-service and insurance-driven practices.
Here are some useful considerations and helpful tips for purchasing an existing practice:
- Consider the past performance of the practice – this can often indicate its potential to succeed in the future.
- Get to know the existing practice owner – understanding their thoughts and philosophies can make the transition process much smoother.
- Consider mentorship opportunities – Sometimes the seller of a practice is willing to be a mentor; finding a good mentor takes time and effort, but their knowledge and impact is priceless.
- Be mindful of the transition timeline – You can negotiate how long the seller will remain after the sale (another reason why mentorship is encouraged). This can assist you with developing relationships with your new patients and team.
- Think about the long-term – Consider where you want to spend the next few years; don’t buy a practice somewhere you don’t want to live or raise a family! Also consider things like office culture, the status of the equipment, etc.
Starting Your Own Dental Practice
Though it might seem simpler to purchase an existing practice, many dentists find it more rewarding to start their own from scratch. The main advantage to this is that you have total control from the very beginning—which is pretty important for some people. This means that you’re responsible for everything from where to build the practice, what equipment to buy, how to decorate it, and of course, how to get patients to walk in the front door.
If you’re feeling inclined to carve your own path and build your own practice, here are some tips and considerations:
- Do your homework to secure financing – Make sure you’ve crunched your numbers before talking with lenders; have details, be enthusiastic, and lay out a clear and sensible plan for financial success.
- Consider buying vs. renting – If you’re truly starting from scratch, you’ll have to consider renting space or actually buying the real estate. Renting is cheaper at first, but the sooner you’re able to purchase the space, the better you’ll be in the long run.
- Employ strategies to bring in new patients – Insurance plans are an effective way to bring in new patients. Mailers and digital marketing are both productive ways for getting your name and abilities out there.
- Spend time with existing patients – It’s never a bad idea to continue developing a relationship with an existing patient. This might even lead to them telling their friends and bringing in more business for you.
- Nurture your network – It’s wise to reach out to nearby local specialists and let them know about your new practice. This can help your professional network to grow and flourish, and can lead to referrals, dental study clubs, and lasting, valuable relationships.
- Don’t rush the transition – It might take a while for your practice to grow but be patient and don’t rush the process. If at first you have to take a part-time job at another practice to make ends meet, don’t fret!
Ultimately, it’s up to you to decide if purchasing a dental practice or starting your own from scratch is the correct move. That said, knowing what goes into each option will ensure that you make the best possible choice for you and your future patients!
About Next Level Consultants
Under the leadership of Mike Dinsio and Paula Quinn, the team at Next Level Consultants strives to provide specialists with the tools they need to successfully run their own practice. If you have any questions about purchasing a dental practice or starting your own, don’t hesitate to reach out to their team online or by phone: (720) 309-9551.