You’ve dreamed of owning your own successful dental practice for years. You’ve visualized every aspect of your new venture – the work you’ll do, the staff you’ll hire and the patients you’ll help. You have an idea of where you want your practice to be located, and you’ve envisioned the look and feel of your office. You may have even designed a logo and worked on your branding package. However, the transition from being a working dentist to hanging out your own shingle is a long journey with a steep learning curve. In establishing your own dental practice, there will be a few surprises along the way.
It comes as a surprise to many first-time dental practice owners the sheer volume of decisions they need to make and the huge time commitment it takes to go through the process. Dreaming about a dental practice is one thing. Making informed decisions on everything from accounting software to equipment purchases to employee benefits (and countless other issues) means there’s a huge amount of time-consuming research required to get it right. No one individual can possibly have expertise in every area. Yet, dentists are called upon to make numerous key decisions which can have huge implications for their practice on a daily basis. All done while maintaining a full workload and life’s other responsibilities.
Surprise! Your Financial Projections for the First Year Are Falling Short
A common surprise for many dentists has to do with finances. Assets, cash flow, overhead, production, collections, accounts receivable, insurance, taxes, daily, weekly and monthly reports – the financial side of owning a practice can be full of head-scratching surprises. Just comprehending cash flow and the equation for profitability before you purchase the practice can present a challenge. You’re paying how much for goodwill? How do you quantify that? If large firms on Wall Street, given all their resources and professional staff, can get it wrong and miss their projections, don’t be surprised if your practice experiences a few bumps in the road on your way to profitability. Always perform your due diligence as you review possible dental practices to purchase. Do not be pressured into accepting numbers and projections unless you fully understand them. Retaining an experienced financial advisor is crucial before you purchase your practice.
The Devil Is in The Details – Caveat Emptor
The adage, the devil is in the details, means the small print often contains extremely crucial points which can have a huge impact on the success of your practice. Caveat emptor means, let the buyer beware. How often have the words, “I thought that was included in the deal,” been uttered by a disappointed dentist? If you are not a detail-oriented person who loves pouring over contracts, hire the right professionals who will look out for your interests.
Communication – If It Isn’t in Writing, It Doesn’t Exist
The process of purchasing a dental practice involves many people. Communication between multiple parties may be handled via text, phone calls, emails, and letters. Misunderstandings can happen. Many buyers are shocked to find out that something they understood verbally to be agreed upon is not written into the contract. Promise yourself, for the sake of all concerned and to save any unwelcome surprises, if it isn’t in writing, it doesn’t exist.
The Cost of Marketing and Rebranding
Many dentists are surprised by the cost of marketing and rebranding. When you take over an existing practice, you will want to get the word out in as many ways as possible. New signage can be expensive and may require a permit. Business cards, brochures, and office forms all need to be designed and printed. The website will need to be updated and an SEO expert brought in. Advertising, public relations, and social media are all very time consuming and require a specific skill set. Hiring a PR firm or a social media consultant may be more expensive than expected.
The Human Factor – Staffing Challenges
Taking over an existing practice means inheriting the team that is already in place. It can be an unsettling experience for all involved. In many instances, an older dentist is retiring (and anxious to move on) and selling his established practice to a younger individual with his or her own ideas about how the practice should be run. Human beings often resist change. Employees have their own ideas about the way things work around the office. This can create a situation which lends itself to conflict. Getting team members on board can be a very challenging situation when there’s a new boss with innovative ideas. While it may take time for existing employees to get used to this new situation, it’s not impossible, and will generally work itself out.
Henry Schein Professional Practice Transitions, Inc. is a national leader in dental practice transitions. A subsidiary of Henry Schein, Inc. they provide expert guidance for selling and buying dental practices, dental practice fees and management, assessing partnership and associateship opportunities, and performing dental practice appraisals and valuations.