We’ve always been passionate about growing our customers’ practices through managing their technology. However, when the pandemic reared its ugly head, it threw the entire dental industry (and the world) into relative chaos and uncertainty. Working with other powerful partners in the dental industry, we express why 2022 is the best year to build a new dental practice!
Before even considering starting a new dental practice, or expanding an existing one, it’s important to get pre-qualified by a loan specialist. Personal finances need to be reviewed in order to determine the efficacy of the practice. Having those finances approved before you start looking at properties will bring you to the top of the list, if there’s any competition for that space. All that information can also be used to help you determine the range of monthly payments your new practice will be able to afford.
Lean on the experience of experts in the industry. There are proven leaders in all areas of the dental industry. That experience comes from many hard earned years of seeing what works and what doesn’t. The money you’ll save with a seasoned financial advisor, contractor, equipment specialist and yes, technology expert, can be substantial.
Unfortunately, we’ve seen many instances where going with the wrong vendor leads to unforeseen issues. An architect or contractor who is unfamiliar with the intricacies of building dental practices is prone to many delays in construction and permitting issues.
In our decades supporting the dental industry, we’ve never heard of a practice owner complain that they started too soon. It’s usually the case that the practice owner wishes they had taken the steps necessary earlier. The short answer to this question is, “now”!
A typical timeline would include working a few years as a general practitioner outside of residency, as is required in New York. Specialists will typically start a year outside of residency, even considering the debt they may already be in. The constant position we see is why spend time growing someone else’s business when I can be growing my own practice.
The emotional uncertainty can be powerful. That’s why it’s important to really lean on industry partners that have your best interests in mind. Once you’re prepared financially, it’s always better to build a new practice sooner rather than later. Your income will grow dramatically after starting.
As a dental startup, it’s best to first consider who you would like your patients to be. That demographic ultimately determines where the best location or neighborhood would be for your practice.
Because the dental industry is so strong, there’s rarely a poor choice in location. You’ll just want to do your due diligence in terms of demographics, competition and the type of practice you have.
A lot of doctors today like the idea of acquiring offices because of the instant cash flow and income. However, when you finance an acquisition, it’s a different loan product than building a new practice. The expectation is that when you acquire a practice, the income supports the debts of the current loan and all personal and professional debts that the doctor has to manage. The income of the office is the most important thing when determining eligibility because it has to support the entire opportunity.
Startups are financially considered differently. Banks are aware that a new practice will start with no patients or even “negative” patients, considering that family and friends will be looking for free dental work. The practice loan includes construction work, equipment, working capital and money to support the practice. After construction is completed, the loan graduates in a way that payments will increase sustainably over time.
Sometimes money is unexpectedly required to inject into acquiring a practice, a lot of times in the form of technology investments. Often, for better or worse, you’re inheriting everything that comes with the practice. You can potentially be purchasing outdated computers, practice management software, imaging equipment or paper charts, which will all need to be changed and replaced. Even software merges and migrations can be very expensive.
When starting a new practice, you’re directly in charge of exactly what technology is placed within the office. Every decision will be made with the intention that everything will lend itself to efficiency and increased patient experience at this exact point in time, not having been developed piece-wise over several years. Instead of being forced to adapt to something that doesn’t quite fit your workflow, you’ll have immediate control over your practice’s operations.
Sometimes we fail to recognize what a practice would mean to a doctor. It’s not just how they will make their income now, but it could mean passive income in the future. A lot of practice owners choose to bring in other dentists or specialists into their practice, while they make a portion of that income. When you own a small business, it also allows you to write things off, lowering your taxable income liability. Ultimately, the practice will become your future retirement vehicle, whether it is used as passive income or if it is sold. It is important to understand that building the practice is not just how you can gather income, but also how you ultimately build wealth. It can even be used as leverage in other life pursuits.
It’s hard to understand when your practice needs to be renovated, because you’re comfortable in the same environment every day. We feel that friends and family are a fantastic resource, because they have brutal honesty when they walk through the office.
Reinvesting in your office infrastructure and aesthetics is incredibly important. Consider changes every 3 to 4 years. Anything past that would be a disservice to yourself and your patients. If you’re not investing in your space, a potential patient or referral may be lured by the new shiny office down the road.
Another indicator for change is when you start noticing that the patient experience within your practice is changing. You’ll notice the changes throughout, even with staff members. If they are dreading coming into work because completing tasks is tedious and unstable, that experience can pass through to your patients. Technology shifts rapidly. New features such as online booking, fast checkout, digital imaging, productivity suites can ultimately be a threat if it isn’t adopted into your practice.
The pandemic has been awful for everyone. But, it did provide us some time to look inwardly at our lives and businesses, giving us a better understanding or perspective on how things are run. It allowed us to identify inefficiencies or even holes in compliance. As we come back to our new version of normal, it’s a great time to get back on track, building and reinvesting into dental practices.
Whether your bank requires one or not, it is essential to have a well thought out business plan. Have it written down and hold yourself accountable. Knowing what you want, or what you don’t want, will be helpful in creating an idea of how your practice will be run. Even with constant changes, it will be your path to success.