You're fresh out of school (or perhaps not so fresh) and ready to start your own dental practice. The first big question you need to answer is, "Should you buy an existing dental practice or start from scratch?" There are several advantages to both options, so ultimately, the decision of whether you should buy an existing practice or start from scratch is up to you! Considering the benefits to both sides of the coin will make it easier to make a decision about which style best fits your needs.
The Benefits of Buying an Existing Practice
Buying an existing practice has several clear benefits--not the least of which is the fact that by buying a practice that has been in the community for some time, you're likely to inherit a wide patient base who are more likely to stay with you then to leave for a new dentist. Purchasing an existing practice will also:
Allow you to start working with an experienced staff. When you buy an existing practice, you'll typically get the staff along with it: the receptionists, hygienists, and others who help keep the practice running efficiently. Not only do they already know what they're doing, which means that the only adjustment to the job will be getting used to you, they also work well with each other and know how to handle situations that might arise.
Let you take a look at the profit and loss sheet before you buy. While your numbers may vary a little from last year's profit and loss statement, you'll be able to get a good look at how the practice has done in the past and develop a good idea of what your profits will look like immediately after you buy the practice. This profit and loss sheet is also a great way to increase your odds of qualifying for a loan.
Improve your odds of turning a profit in the first year. If you're still paying off student loans, the sooner you're able to turn a profit, the better! Having an existing client base, rather than having to start from scratch, can substantially increase your profits in that critical first year.
Provide you with existing billing and payroll systems. This can eliminate a lot of hassle as you're adjusting to having your own practice for the first time.
Decrease the amount of time you'll have to spend getting new patients through the door. While you'll still need to expend time and effort on marketing, you can spend more time getting to know your new patients and developing a relationship with them instead of always having to think about how to get the next patient through the door.
The Cons of Buying an Existing Practice
Despite the advantages of buying an existing practice, there are some clear disadvantages that should be considered before purchasing an existing practice. If you want to buy an existing practice, make sure you think about these potential downfalls before moving forward.
Purchasing an existing practice means you purchase the former dentist's reputation. If they have a sterling reputation in the community, that can be a great advantage. On the other hand, if they have a less-than-desirable reputation, you may find yourself with a lot of people to convince that you're offering better service.
You might struggle to fit in with the existing dynamics of the staff. Any time you come into an existing group, there are established relationships that you'll have to work around and within. When you buy the practice, you get a staff that's used to working together, and you might be the awkward one in that dynamic. Depending on the personalities of the staff and their expectations of you as the dentist, it may take time for all of you to mesh into a working whole.
You might not get what you expected when you make the purchase. The dentist who's selling will prefer to present their practice in a way that will draw you in. When you enter the practice, you may find that it's not what you expected--and that can lead to its own set of struggles that, now that the practice is yours, you're stuck with.
The Benefits of Starting from Scratch
If you don't want to purchase an existing practice--or you're not sure what to expect if you do--starting from scratch may be the way to go. This method does offer several advantages.
You'll get to develop your own business systems. That means the practice will run your way, rather than running on someone else's idea of how it should be.
You'll learn important lessons during those early years of doing business that will help improve your long-term success. Some lessons are best learned by living through them, and starting your own practice is a great way to do exactly that.
You get to make all of the choices. You'll choose your own business name, location, design the layout, and choose the equipment that you want to use. You'll hand-select the staff that you want for your new practice, rather than inheriting staff members that you might not get along with long-term. Everything will be according to your choice, rather than fitting someone else's expectations.
The Downsides of Starting from Scratch
The freedom offered when you start from scratch is great, but like anything else, there are downsides. If you're ready to jump in and start your practice, make sure you consider:
The cost. It can take as much as two years for you to start turning enough of a profit to pay back those loans and paying yourself, which can lead to high levels of stress during the early years of your practice.
The marketing. When you start from scratch, you'll have to spend a lot of your time growing the practice. You won't have an existing client base, so you'll have to grow your business on your own.
The effort. You'll need to make staffing decisions, purchasing decisions, and more. The effort of starting from scratch can be astronomical, leading to a lot of late nights.
The staff. Even if you're running on an extremely tight budget at first, you need a high-quality, experienced receptionist to keep everything running smoothly. This is one area where you can't afford to scrimp!
The risk. There's always a large financial risk with a start-up, many of which fail due to under-funding. If you're planning to start from scratch, it's important that you have sufficient capital to invest. Many of our clients work elsewhere while they build their own practice.
Whether you choose to start a new practice from scratch or purchase an existing practice, setting out on your own for the first time is an adventure, as you will learn valuable lessons along the way. Making the right decision for you is personal and will depend on your financial situation and your needs. By carefully considering the advantages and disadvantages of each position, you significantly improve your odds of making the choice that's right for you, and your future practice.