If you’re reading this, chances are you have made the decision to become a dental practice owner. That’s huge! Congratulations! Now, will you be buying or building your practice? Have you explored some of the pros and cons to buying vs. building your dental practice?
If that’s why you’re here reading this, then you’re in the right place. Dental B-School takes a closer look at buying vs. building a dental practice because it is important to have all of the information before making your decision. As we go through this, keep in mind that there is no wrong decision as you can be successful under both scenarios. It all comes down to personal preference.
One of the biggest pros to buying an already established practice is that you’re likely to inherit a wide patient base who are more likely to stay with you rather than leave after you purchase. That’s a pretty big one right there. Reducing attrition is vitally important to a smooth transition.
Another major perk to purchasing an established practice is that it will also allow you to start working with an experienced staff. The staff will likely stay on with you as they’ve already been with the practice for x amount of time and have built relationships with the patients.
We can’t forget about good will. Purchasing an existing practice means that the previous dentist’s reputation and good will, will benefit your new practice. If the previous dentist has a great reputation in the community, this is a huge advantage for you. However, this can also be a con if they have a less than stellar reputation, so keep that in mind.
All right. Becoming a practice owner is an exciting time and expectations are usually high. A con to buying an established practice is that you might not be getting exactly what you think you’re paying for. You can mitigate some of this risk however, by doing your due diligence before purchasing the practice. Remember that sellers will also show the practice in a favorable light so that they can sell it and will lead you to believe that buying their practice is less risky than it may actually be.
Part of the draw for purchasing an existing practice is their established patient base. However, this can also be a con. Attrition of patients must be taken into account as approximately 20 percent of patients will leave the practice. It’s important to plan for this when you put together your business plan.
Another con may be the need to upgrade older business systems or financial policies. For instance, if the seller has been waiving co-pays or if they’ve maintained paper records that need to be converted to digital, those are all expenses that should be taken into account, but that are rarely planned for.
You get to develop your own business systems! Every aspect of the practice will be run your way as opposed to purchasing an existing practice with systems already in place. Of course, having to develop your own business system may seem intimidating, but that’s wherecan help as we offer tons of resources and courses to help make the process that much easier.
When taking the leap into practice ownership, you may want the flexibility of being able to name your practice whatever you want, picking the location you want, the layout and even the design. By building a dental practice, you have the ability to do exactly that. You’ll even be able to pick the equipment and technology that you want, and hand selecting your staff!
As with everything, building a practice also has some cons. Starting from scratch means that it can take around two years to start making enough of a profit to pay back your loans or even the ability to pay yourself – which can lead to more stress. In fact, it’s very possible that you may have to work another job while your practice grows. The cost of construction has also skyrocketed, which could mean even higher debt than normal. Building your practice also means marketing. And there’s so much more to marketing than just having a website that will require both time and money on your part.
All decisions will run through you. So, this could be both a pro and a con, but when you’re also a practicing dentist, this could take up a significant amount of your time. From hiring staff to equipment purchases, it all falls on you.
Making the right decision for you is personal and will come down to your own preferences and your financial situation – as well as your needs. By carefully considering the advantages and disadvantages of each position, you significantly improve your odds of making the best choice for you.
Hopefully this information has steered you towards a decision. We have a treat for you! We are offering comprehensive checklists for either choice.