Owning a practice can be a rewarding experience for dentists looking for the next step in their career. If that’s you, you’re probably considering whether to buy an existing practice, or start a brand new one of your own.
As you’d expect, either option will require substantial investment and a robust business plan. In this blog, we’ll take you through the pros and cons of both.
Enjoy the freedom and choice of starting your own dental practice
You can build your practice in line with your vision
When you start your own dental practice, you’re in control of all the major decisions.
Assuming you’ve secured sufficient funding, you can buy the equipment you want, hire the people you want and set the tone and vision of the practice.
You’ve got a completely fresh start and you can develop the practice in line with your values and aspirations.
The gift of choice
You’ll also be able to choose where you want to set up your practice, identifying a profitable area whether that be close to home or somewhere further afield.
What to watch out for when starting a dental practice from scratch
Investing time and effort from vision to opening
In the early days, you’ll invest significant time and effort in finding a building, perhaps applying for planning permission, a mortgage (if necessary) and decking out the practice ready for patients.
Hiring staff can also be time-consuming, as you advertise and interview for the people you want.
It’s unlikely to be profitable immediately
Your start-up costs are likely to outweigh your income in the first few years as you build your patient base.
If you are new to running a business (as opposed to being a dentist) you could be more exposed to making expensive mistakes.
It can take up to two years for new practices to turn a profit and you’re carrying the risk of the unknown – how profitable will it be in the long-run?
What are the benefits of buying an existing dental practice?
You’ll have patients from day one
You may not have to work so hard on marketing, or be at the mercy of your own learning curve when you inherit the existing patients of an established practice.
Previous accounts help you forecast profitability
Having conducted due diligence in the sales process, you’ll have a level of certainty in the profitability of the practice, based upon their previous accounts.
This may also prove helpful if you’re looking to expand the practice or upgrade the building. The track record in profitability can make it easier to apply for loans and funding.
What could be difficult about buying a current dental practice?
Countering “the way we’ve always done it”
If you intend to put your own stamp on the practice, you may find it can be difficult to change the systems and ethos.
You’re battling “the way we’ve always done it”. People can be resistant to change, so it might take you a little longer to steer the practice in the direction you want to take it. Difficult conversations could lie ahead.
Availability and finding the right fit
You’ll need to decide what sort of practice you’d like to own and seek it out. For example, it might be difficult to turn a fully NHS practice into a fully private practice.
It can take time for the right sort of practice to become available and you might even find yourself playing a longer waiting game than starting your own practice.
What else is there to consider when buying a dental practice?
Cost – which option is cheaper?
Costs will vary greatly so it’s difficult to say which option is more cost-effective. Starting from scratch, you’ll have a raft of start-up costs. But you’ve got the opportunity to develop valuable goodwill, which can be profitable when you come to sell.
Conversely, if you’re buying a practice now, you could be paying a premium for the goodwill and reputation already established in the business.
Planning for retirement
Depending on your age and when you want to retire, you’ll want to consider how many years you’re willing to invest in the practice before you sell up.
Starting a brand-new practice is likely to take longer to reap financial rewards. If you want to retire within the next five to ten years, it may prove more viable to buy a practice than to begin one.
Get in contact with us if you’d like an in-depth chat about the best route for you.
We can provide specialist advice based on our extensive previous experience with dentists in your position.