The same sense of accomplishment and creativity that led many dentists to dental school also makes many dentists dream of creating and building their own practice from the ground up. However, opening your own practice from scratch can be a daunting task, both from a legal and a practical perspective.
Do I Need To Incorporate?
There are many reasons you should form a separate legal entity to own the practice. Forming a corporation, a limited liability company or a limited partnership is typically an inexpensive process that can reduce your tax liability, shield your personal assets in the event of a lawsuit and facilitate future growth and expansion. However, the choice of which type of entity is best for you depends on your unique circumstances and goals.
How Can I Finance The Purchase?
Unless you have been practicing for a number of years or are independently wealthy, you will likely need to obtain a loan to start your practice. In addition to the obvious terms, such as the interest rate and length of the loan, you also need to consider whether the loan requires a personal guaranty, what the monthly payment will be, whether your projected take home pay will be sufficient after the loan and how the loan will be secured.
How Do I Know Where To Open The Practice?
This is perhaps the most critical part of the planning process. In addition to evaluating the area demographics to determine how saturated the market is, you have to decide whether you want to own the building in which the practice will be located, or whether you want to lease office space from a landlord. If you are leasing, you must consider the terms of the lease, which will dictate everything from the duration of the lease and extension options to common area maintenance and the amount of signage you will be able to post.
How Do I Obtain The Necessary Permits?
Once you have set up the entity and determined your location, you will need to obtain permits to operate the practice. The entity will need to apply for a Federal Tax ID number (EIN) in order to operate. Additionally, occupational licenses must be obtained from state and/or local governments. Finally, if you want to offer specialized services, such as dental anesthesia, you will need to obtain a permit from the Arizona State Board of Dental Examiners (“Dental Board”).
What Do I Need To Know About Purchasing Equipment?
Unless you are purchasing the building in which the practice will be located, dental equipment is typically the largest single expense in opening a new practice. One way to mitigate the expense is to lease some of the larger-ticket items, such as an E4D or Cerec machine. However, if you lease, there may be limitations on how you can use the equipment, and there may be hidden costs associated with the equipment.
How Do I Protect My Investment?
In addition to malpractice insurance, you will need to obtain commercial general liability insurance to cover your premises in the event someone slips and falls. You should also purchase property insurance and business interruption insurance to cover your practice in the event of storm damage, a water leak or other unforeseen circumstances. Finally, you should insure your most important asset: yourself. Disability insurance is a must for dentists, who suffer disabling musculoskeletal injuries at a rate far higher than most occupations.
What Do I Need To Know About Marketing?
Even before you open your doors, you should let customers know the services you offer and how to find you. A website is critical in this day and age, but you should also consider other forms of advertisement, such as local print advertisement, direct mailing campaigns and offering discounted services to bring patients in.
For more information, please visit our website, comitzstanley.com.
While we are making an effort to share general knowledge with the dental community and answer dentists’ questions, this not a substitute for individualized advice from an experienced healthcare lawyer. If you would like to speak with our attorneys and have them take an in-depth look at your particular situation, please feel free to contact us directly.