Whether you are fresh out of school or a seasoned veteran, as a first time buyer there is a world of opportunity ahead of you. The first big question is “Should I buy an existing practice or start fresh with a new one?” While each has their upsides and downsides, choose what makes the most sense for your level of experience and tolerance for difficulty.
Buying a Dental Practice
Buying an existing dental practice definitely has its perks. For one, it takes significantly less work to get up and running because the practice is, well, already up and running. Entering a practice with an existing infrastructure is a great option for someone with less experience managing the business side of dentistry. Existing infrastructure also comes with patients, which means a revenue stream that immediately provides cash flow to cover the cost of purchase, educational debt, and practice overhead expenses. Not only that, but investors and banks are more likely to be interested in an established practice that can show a history of growth – adding an element of stability to your financial situation.
Excited to buy that dental practice, yet? Wait just a minute and consider everything that an existing practice brings to the table. Sure the business side is up and running, but is it on a path for long-term growth? If investments in the practice have been neglected, it may be expensive to update the infrastructure, technology, and systems in order to support future growth. Before buying a dental practice, work with Certified Public Accountants and Certified Valuation Analysts to identify and mitigate whatever risks an existing practice presents. They can supply you with a full diagnostic of a practice’s health and how you can put it on the fast track to long-term growth and stability.
Starting Fresh
Starting your own dental practice is a difficult undertaking, but can be ultimately rewarding for a dentist who already has managerial experience. A new dental practice allows you to build your brand from the bottom up – ensuring your practice has a solid infrastructure and foundation for long-term growth. Not to mention that you can customize your practice however you see fit: atmosphere, staff, services, and location, to name a few.
Unfortunately, the amount of work and attention that a new dental practice requires might not be for everyone. Starting fresh could mean that you’re entering into a high cost, low cash flow situation, in which patients need to be earned before a steady stream of income can be established. Additionally, a dentist with little-to-no experience managing a practice might need additional support from 3rd party advisors such as accountants, attorneys and consultants. And don’t think that getting a loan to start you off will be so easy. Many lenders and investors prefer to see a history of revenue rather than projected earnings.
Whichever route you choose, don’t do it alone. Our team can help you identify risks and develop a roadmap to strong growth.