The idea of owning and running a business can be daunting. You are not only a dental provider, you are also a business owner. As a dental professional, you may be thinking that you just need another year or so as an associate before you’re ready to own your own practice. That nervous feeling may always be there but delaying the process could stunt your growth professionally.
Most dental professionals start out as an associate working for someone else with an established practice. For some, this step lasts just a few years, and for others, it’s their whole career. If your goal is to have your own practice someday, you should jump on the opportunity as soon as you feel confident in your clinical abilities. The litmus test here is how confident you feel with executing the clinical aspects of running your own practice.
Typically, dentists are held back from starting their own practices due to their fear of the business side because it requires more than just dentistry. If running a business isn’t your strong suit, there are many consultants and business professionals who can take care of the business-related items for you for a reasonable monthly fee.
The reason to start looking to buy a practice when you are clinically ready as opposed to business ready is because the move may never happen. You may never feel comfortable facilitating the business side of a practice, and that’s fine because those can be passed on to someone else. You’ll probably always be nervous about starting a business. It can take quite some time before the ideal practice is even available, so the moment you feel capable, you should start looking. If you wait, you may miss the opportunity altogether.
There are a few things to keep in mind when you start the process of buying your own practice.
Your associate contract
Before you sign an associate contract, think about whether you want to have your own practice in the future. Review your associate contract for language that may include a non-compete clause, which discusses such things as patient acquisition and minimum distance from the current practice. Depending on the area of practice, you may not be able to start your own practice within several miles of where you’re now working.
These are all things that you should keep in mind before signing a contract. None of these are prohibitive measures to starting your own practice, but they should be top of mind as you work toward securing your own practice. Examine your associate contract and be mindful of what you are capable of doing within the limits of the contract’s parameters.
The type of practice you want to have
Think about the patients you currently treat. If you’re comfortable with the type of practice you’re involved with now, that may be the area you want to focus on when you’re on your own. But perhaps you would like to work with a different set of clients. You’ll want to explore several types of practices, such as fee-for-service (cash), insurance-based, or one that accepts Medicaid. Whatever you choose, the practice you end up buying will need to align with your plans.
Availability of practices when looking
Even if you’re not ready to buy, you should look to buy. Established practices with patients offer the best value. The most equitable way to start a practice is to buy an existing one. This means it’s a seller’s market, and when the opportunity arises, the ideal practice should be closely examined. Purchasing an established practice provides insights that a new practice cannot, such as a history of cash flow and predicted revenue.
If you want to start from scratch, you will need to be in a community that’s eager to support your business. This route is easiest for those who have a large group behind them who are willing to become patients. For instance, is this a community where you grew up, where neighbors will help promote your practice? Are you entering an area where there is a common language or cultural community you can contribute to? These are all factors to consider when establishing your practice.
Financing and insurance
There are a few things that will help you prepare for any obstacles that may come up when starting a practice. To become financeable, you need to be liquid and have a good cash savings. Financial institutions and banks place less emphasis on the amount of your student loans and more on the kind of savings you have. My tip is not to focus on paying off your student loans as fast as possible, but rather on saving up. You may instinctually feel that paying off debt is the way to go. But if your cash position isn’t where it needs to be, you’re not going to get the funds to start or purchase a practice. Banks also require disability and life insurance. Backup funds are needed in the event you can’t work, and to ensure that costs are covered, banks want to see insurance policies.
If your goal is to one day have your own practice, start thinking about it as soon as possible. If you are confident in your clinical abilities, start looking at what is available. Look at several offices. This will expose you to different practices and will help you narrow your preferences and determine what you do not want. Consult with a financial professional who can lessen the financial nerves that are often associated with this commitment.
These are the personal views and opinions of the author and do not necessarily reflect the views and opinions of The Guardian Life Insurance Company of America or its subsidiaries or affiliates. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. Financial Representative, The Guardian Life Insurance Company of America, New York, NY. Living Legacy Financial Group is not affiliate or subsidiary of Guardian.