If you’re a practice associate, seeing your patients and going home at night without the responsibility of being an owner can feel comfortable.
But if you have the dream of owning your own practice, deciding to act on it can improve your career and provide the opportunity for growth, financial freedom, and security for you and your family for years. It’s a decision that will create a valuable asset for your future. And success as an entrepreneur can lead to immense satisfaction as you build your practice, create jobs, and contribute to your community as business owner.
It can also be intimidating. Feeling apprehensive is normal when you take a big step in your career. After years of working with dentists who decided to open their own practice, we understand well the most common fears associated with the process.
In this article, we’ll talk about the most common fears and why you shouldn’t allow them to hold you back from pursuing your professional goals. You’ll understand you’re not alone in the startup process—or afterward. We’ll also talk about planning. That cliché, “failure to plan is planning to fail,” is true. As you explore launching a practice or buying an existing one, the plan is step one and will be the foundation of your success.
Can I secure financing?
Are you worried you can’t secure a loan or afford it? Are you concerned about the expenses associated with owning a practice? How expensive is insurance? Does anything make us more fearful than money issues? Luckily, the solution to facing fear is straight-forward. It’s knowledge.
Those are the right questions to ask; but don’t force yourself to shoulder the burden alone. Any dentist seeking to purchase or open a practice of their own should seek advice from a skilled financial advisor—preferably one that specializes in financing for healthcare professionals.
Consult with your lender; ask them if they have experience with loans for dentists. Reach out to insurance professionals that tailor coverage for dentists and doctors. Many dentists worry their school debt will keep them from borrowing the money needed to purchase or open a practice. Not true. Historically, dentists default on a practice loan about 1% of the time, which means lenders are often eager to secure financing for a dentist who wants to open a new practice. According to Xite’s research, banks are typically willing to loan a dentist $350,000–$500,000 (or more) for a first practice.
The dental-practice industry is too competitive.
Often, a dentist will say “I can’t open my own practice; there are already too many dentists in my town.” Surprisingly, the number of dentists who can make a go of it in a narrow geographical region is much higher than you might think. No matter where you live, there are people; and all of them need a skilled dentist.
However, the most crucial factor to the success of a dental practice is its location within the region. Using a data-driven analysis, professional dental consultants can assess patient demographics of an area that are conducive to your practice’s success. (Xite Realty provides a free initial demographic analysis to TDA members.)
Additionally, there’s never been a better time to open a practice. Many dentists are retiring, and not enough younger dentistry professionals are stepping in to replace them.
If you’re planning to open a practice, start the process of locating a property a year or more in advance. Only that way can you ensure you have enough time for planning, paperwork, construction, and customization of your office.
I don’t know how to run a business.
You’ve been elbow-deep in molars and crowns making a living. Who has time to keep up with the business aspect of dentistry?
It’s okay if you’re a little fuzzy on all the details of running a business; if you have a strong financial and administrative team, you won’t be on your own; you’ll have help. Your team should include a realtor, attorney, CPA, financial advisor, insurance agent, and management consultant.
Here’s an expert tip: Don’t do back-of-the-napkin planning. Plan very carefully, always thinking about growth. Build your practice for success now and in the future.
Thinking about the following questions will help guide you and your team through the process:
- What are my practice goals?
- Where do I see myself and the practice in five years? In ten years?
- Do I plan to add associate dentists?
- Have I secured enough space to accommodate the goals of my practice?
It’s too much responsibility.
It’s natural to feel overwhelmed by the prospect of starting your own practice. But think about your life; has anything worthwhile come easily? As you entered dental school, didn’t it seem daunting? But here you are, ready to meet other challenges.
Again, how do you strip away the fear of being overwhelmed? Learn as much as you can. Once you understand the process of running your own practice, it will become second nature. You’ll feel a sense of accomplishment and experience a completely different workload as a dentist and owner.
Here’s another expert tip: Let others help you! Don’t try to do it all by yourself. This isn’t you alone in a chair with your hands in a patient’s mouth. You need to allow members of your support team to help you launch your practice. That means trusting your lawyer, your CPA, realtor, the contractor, and so on to alleviate your worries and responsibilities.
I can’t handle the debt.
How will you pay off the debt associated with opening your practice? Will you still be able to afford life’s expenses? You will pay off the debt—and you will be able to afford your expenses.
Most owners of new dental practices tighten the financial belt the first year or two as they build their business. But with proper planning, your lender will provide enough working capital to cover living expenses. That means you breathe easier in the early stages of being a business owner.
A good loan for a dental practice will include funds for the construction project, equipment and furniture, marketing, working capital, and survival expenses.
You are taking on large responsibilities when you launch your own office, so it’s expected you may feel worried. But keep in mind that based on historical data, the probability of success is very high; and that with responsibility comes great rewards that can be long-term.
Xite Realty finds the best location for a practice to increase a dentist’s probability of success. The company uses the most comprehensive real-estate database to provide a clear picture of competition in an area and identifies a target patient base using key demographic criteria that has been tailored for dentists. TDA members receive a free initial demographic analysis—both on existing space(s) as well as any new offices being considered. Xite can negotiate your lease and help with building to suit.