It can be a very rewarding experience to own a business. Planning, hard work, perseverance, and investment are essential to the process. It can be a wonderful transition if you are able to endure the start-up and early development phases.
Strategy for entry
In most cases, dental practices begin by using the following entry strategies:
- The purchase of a practice: This entry option may seem easier than the others, but it has its own challenges. In some markets, the demand for existing practices is high, but none are available for purchase. Other markets may not have dental practices located exactly where you would expect them to be.
- Starting from scratch: By starting from scratch, you are able to begin without any legacy issues, such as old pricing, old software, or past client service issues.
Choosing a location for a new dental practice is more than important; it’s imperative. This is why you should use an expert who specializes in dental office spaces and can select locations using software tools. A dental and medical office space specialist who can negotiate on your behalf without a conflict of interest, not a general commercial real estate agent that works with all types of businesses.
The financial considerations
You should honestly assess your financial and emotional readiness before making this leap. As start-up businesses require sweat equity, this move must be made at the right time in your life. In most practices, cash flow is negative during the start-up and development phases, so you need cash on hand to cover household expenses and maintain insurance coverage.
Lead generation and marketing for dental practices
Practitioners need the most assistance in this area since they have not been trained in marketing, pricing, or practice management. During college and as an apprentice, the emphasis is on performing the work, not generating leads.
To build a business today, hanging out your own shingle is not enough, and referrals are insufficient to achieve your revenue goals.
Costs associated with starting a business
Start-up costs vary depending on your revenue goals, entry strategy, and geographical location. Offices in large cities near office parks will also cost more than offices in lightly populated bedroom communities.
Commercial real estate firms understand dental practice needs and costs very well. Getting their expertise and insights costs you nothing.
Also, dental practice lenders understand the industry extremely well and can provide additional guidance. In other words, you do not want to work with a local retail bank. Obtaining financing from dental practice lenders who understand the industry inside and out will be your goal.
You will need a dental practice CPA firm on your team, not a generalist CPA firm. You will save time and reduce your risk with a dental practice CPA on practice acquisition due diligence, business structure, entity selection, and accounting and tax issues. As you embark on your new practice journey, they can suggest dental practice real estate firms, law firms, lenders, and other specialists. By working with specialists who understand the dental industry, you will lower your risk and save time. Contact our dental accounting firm to learn how we can help.