You’ve dreamed of owning a 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. However, the transition from being a working dentist to practice owner 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 owning a dental practice is different than owning one. 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. You cannot be an expert in every area. Yet, dentists are called upon to make numerous key decisions that can have huge implications for their practice. All done while maintaining a full workload and life’s other responsibilities.
Surprises in your Financial Projections
Don’t be surprised if your practice experiences a few bumps in the road on the way to profitability. The financial side of owning a practice can be full of head-scratching surprises. Assets, cash flow, overhead, production, collections, accounts receivable, insurance, taxes, daily, weekly, and monthly reports–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? Always perform 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.
If It Isn’t in Writing, It Doesn’t Exist
How often have the words, “I thought that was included in the deal,” been uttered by a disappointed dentist? The process of purchasing a dental practice involves many people and misunderstandings can happen. Many buyers are shocked to find out that something they thought was agreed upon was not, because it isn’t in the signed contract. Remember, to ensure the validity of something that was discussed, it needs to be in writing.
Marketing and Rebranding
Many dentists are surprised by the cost of marketing and rebranding. 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 a search engine optimization (SEO) expert brought in. Advertising, public relations, and social media are all very time consuming and require a specific skill set. Hiring a consultant to help 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 or her established practice to a younger individual with their ideas about how the practice should be run. The employees may have ideas about the way things should work around the office. Get team members on board to avoid creating a situation that leads to conflict. While it may take time for existing employees to get used to this new situation, it’s not impossible.
Henry Schein Professional Practice Transitions, Inc. is a national leader in dental practice transitions, a subsidiary of Henry Schein, Inc. Providing 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.