Dentists learn an awful lot at dental school, but they don’t learn much about business. In this blog post I want to go over some of the benefits of owning your own practice and the mistakes to avoid as you look into it.
Dentists who own their own practice experience benefits that a regular dentist does not. As a business owner, you are allowed creative freedom as your own boss, you can set your own schedule and work hours, and you have a more flexible salary. It is difficult to build a practice from the ground up, not to mention financially risky. Rather than starting a business, a lot of dentists who want to be their own boss will buy a small practice that has already made a statement in its area and then help that practice to grow even further. There is a lot less stress involved and less risk for the same benefits. Before buying a small practice, make sure that you’re avoiding these common mistakes that people often make.
1. Failing to do Research on the Dental Practice
The first biggest mistake that dentists make when buying a practice is that they don’t do the right kind of research. When a person is selling a business, they could have a variety of reasons behind it. Sometimes it’s because the business is about to go under and other times it’s just because the owner wanted to move on and do something else, or retire from dentistry. Understanding the motive is vital. If you end up buying a business that is months before going bankrupt, it’s likely that the business will drag you down with it. So, before you buy, do research on the financial choices of the practice. Make sure that you understand the choices that they made and the investments that the business has done. Also, research the competition in the area to ensure that the practice doesn’t have a competitor that is driving it out of business.
2. Overestimating the Value of the Practice
If you’re an entrepreneur who is stepping up to buy a practice, the chances are that you might not have a lot of experience in the area of business yet. You know that you can pick things up quickly, but you should still see the limitations that you might have. You need to realize that taking the advice of others will be extremely helpful. If you don’t, you might go into a deal with a practice that is being sold for more than it’s worth. Make sure that you know the answers to the following questions:
How many patients does the practice currently have?
How much effort will go into fixing the practice?
What are the drawbacks of buying this practice?
How will the patients react to a new dentist taking over the practice?
Then, take the advice of people who work for the business that you’re thinking about buying and those who are a step or two away. When you’re calculating the future of the business’s cash flow, be conservative and safe. Also, be sure there haven’t been any issues with fraudulent charges like using a stolen debit card. You do not want to experience a lot of chargeback, and may not even know exactly what is a chargeback, so be sure to consult with an accountant and do your research online to ensure the practice is financially sound. You want to make sure that the business is being sold for the right price and that you’re not overvaluing it because of a personal bias.
3. Assuming That Owning Your Own Practice Will Be Easier
One of the worst mistakes that you can make when you’re buying a practice is thinking that it will just be a part-time job. This sets you up to think that you can put a minimal amount of effort into the business and still make a profit. Instead, this may slow down business, decrease the motivation of your staff, and could end up crashing the financials of the practice. Be careful with your expectations. You need to be prepared from the beginning to put all your time and efforts into the practice as soon as you sign for it. Of course, owning your own practice comes with more flexibility. Many dentists will hire an office manager to take care of the business side of things so you can focus on what you love doing the most.
Conclusion
Owning your own practice involves a lot of risks and can result in more profits than a traditional job working for someone else. If you’re willing to put forth the effort into making your business run smoothly and you’re willing to take a financial risk, then you’re ready to think about buying your own practice.