Making the decision to start your own dental practice has probably led to a few sleepless nights, a lot of stress and worry, and quite a bit of excitement. So, you want to become a dental practice owner, but aren’t sure if it’s the right time? You’re not alone.
Starting a dental practice is something to be proud of – and is something that will likely cause a few more sleepless nights than you’ve already had. There are ways to make the process go a bit more smoothly to ensure the successful startup of your dental practice. Here Dental B School discusses a few of the major factors in determining timing.
A lot of your time, energy and money will go into starting your dental practice. It will be both physically and emotionally draining (and also very rewarding once you get through the first part). Do you feel ready? Being a business owner means working longer hours to ensure the success of your dental practice. It means staying up to date with the latest technology, making hard decisions, playing mediator between employees, taking care of patients, and so much more. If you’re ready to be the shot caller and are up for the challenge of taking it all on yourself, you may be ready for the next step in your journey.
A business plan is a written document that covers everything from your business’ goals, how you plan to accomplish them, your marketing plan, financial projections and even the operational viewpoint. If you’re seeking a loan from a financial institution, a business plan is necessary to secure financing.
Ultimately, your business plan is your full vision for your dental practice. In a way, it’s kind of like a dream board for your practice – but more in-depth and professional.
Not counting your student loan repayment, starting your own dental practice can cost upwards of $500,000. It is because of this steep cost that most dentists turn towards securing financing from a financial institution.
How does a bank determine a loan for a practice acquisition? The short version is that they will look into every nook and cranny of your personal and business finances (if you have any) to ensure that the dental practice is a worthwhile investment and that you are worthy of receiving the line of credit. The process typically starts with the underwriters looking closely at the practice’s income tax returns.
Building a successful practice means understanding your local market. Determine who your competition is and build off of that. For instance, if the area that you’re looking to start your practice in is saturated with cosmetic dentists, consider opening a practice focused on family/general dentistry – or vice versa.
Understanding who the competition is can also help you better posture your marketing efforts to help you be competitive with getting your practice’s name out there.
If you’re currently an associate dentist at another practice, or have been in the very recent past, there’s a good chance that you’ve signed a non-compete clause in your contract. Sometimes, these non-compete clauses can extend past you leaving the dental practice as well. This non-compete clause can impact not just when you’re able to start your own dental practice, but also where (i.e. distance from other practice).