Acquiring a Practice vs. Opening From Scratch: What's Right For You?
Whether you’re fresh out of dental school or you’ve been working under another dentist and are ready to strike out on your own, you’ve got options. You may be wondering if it’s better to start your own practice, or to acquire a practice from a dentist who’s retiring or moving on to other ventures.
Both options are viable, of course. But they have their unique pros and cons. So what’s right for you? Read on, and Tooth & Coin will discuss the advantages and drawbacks of each option.
The Pros & Cons Of Acquiring A Practice
First, let’s discuss the advantages of acquiring a practice from another dentist. A few of the top benefits of purchasing an established practice include:
- Established patient base & reputation – You’ll be able to benefit from a patient base that’s already regularly coming to the office. You’ll benefit from the previous dentist’s reputation in the community. This is particularly true if you purchase the business and work alongside the previous owner for a few years.
- You’ll already have staff in place – You won’t need to hire a team from scratch. You’ll have a team in place already, which makes it easier to start out on the right foot.
- Transparent finances – You’ll be able to look at all the finances of the business before you buy. You’ll see where it’s doing well and what could improve. With proper due diligence, there will be no surprises.
Sounds great, right? Well, there are a few drawbacks to keep in mind before you commit.
- Stuck with building/equipment – Due to the high cost of purchasing a business, you probably won’t be able to move the office or dramatically upgrade the equipment for a while after your initial purchase.
- Staff may resist changes – If you’re not meshing well with the existing staff, it may be hard to get them adjusted to your way of doing business. This can cause employee turnover and other such issues.
- Reputation goes both ways – If the previous dentist didn’t have the best reputation, it may be hard for you to overcome this perception in the community, even after the practice changes ownership.
The Pros & Cons Of Starting A Dental Practice From Scratch
Got the entrepreneurial spirit? Here are a few of the benefits of starting a dental practice from scratch.
- Complete control over location, equipment, building & more – You can build your practice your way. From modern equipment to a convenient location and more, you’ll build it all from the ground up.
- Choose your own staff & develop business procedures, policies – You’ll get to choose your own team members, develop your workplace culture, set out your own policies and procedures for how things get done, and more.
- Gain a valuable business education – You will learn lessons in the first few years of starting your own practice. Some of these will be tough, but they’ll all be valuable in the future as you continue to develop as both a dentist and an entrepreneur.
Next, let’s talk about the cons of starting your own dental practice.
- Lots of additional work – You have to do everything. From leasing a building to buying equipment, getting loans, hiring staff, setting up billing, and more. It’s a lot of work, even if you hire experts to help with the initial setup process.
- It takes time to turn a profit – Most dentists won’t profit for at least 1-2 years after starting a practice. In contrast, you may start to make a profit immediately if you purchase an existing practice.
- Higher financial risk – You’ll need to take out loans for equipment, hiring staff, marketing, and other startup costs. This leads to higher financial risk. This may be particularly tough for dentists who are right out of dental school and still may have a lot of student debt.
What’s Right For Me? Find Out At Tooth And Coin!
Buying an existing practice and starting a new practice are both viable options if you want to run your own dental office. And at Tooth and Coin, we can help you do the math, and learn more about the advantages and drawbacks of both options. Need guidance? Give us a call at (877) 265-2121 or schedule an appointment online today.