Buy vs Start your own Dental Practice?

With 2020 in our rear-view mirror, a new year brings new opportunity for dentists and dental specialists across Australia.

It’s a great time to recharge and reassess our goals, with a common goal among dentists being dental practice ownership.

One of the most critical decisions an ambitious dental practitioner will have during their career is whether to “startup” their own dental practice, or to acquire an existing dental practice or business.

To buy a practice or start up your own can be a difficult decision that requires intensive consideration. There are many highly skilled dentists across Australia, but that does not necessarily translate into being highly savvy businesspeople. Rushing into a decision without sound research and advice can be detrimental to your future potential and success.

Renowned Australian dentist-entrepreneur and respected industry leader, Dr Nauvneel Kashyap has a wealth of experience in the setup of multiple dental businesses.

He outlines key factors that determine future success, all that need to be individually addressed prior to starting a new dental practice. These include

Understand your competition

How does the competition market themselves, their online presence, the procedures they offer, what are their hours? Having a deep understanding of your competitors will allow you to identify potential points of differences. Whether you are looking at acquiring a dental practice, starting your own or building, researching your competitors can help shape your decision.

Research your population

Dr Kashyap believes that it takes about 2,000 people to keep one full-time dentist busy and that setting up a new dental practice too close to the CBD of a major city can be detrimental. Densely populated areas are likely to have more densely populated dental practices. New practices take time to cut-through a new market and build up a patient base. When competing with many other dental practices geographically, this can make it even more difficult when you are essentially targeting their patients. Location is everything!

Understand your finances

The amount of finance you require will depend on your savings, as well as your goals. This will vary depending on your strategy – buying or starting a dental practice. If you are looking at an existing dental practice, you will need to account for not only the business and practice environment, but any extra investment required to get it to your desired standards prior to operating.

Build your clinical and communication skills

This is an obvious one in modern dentistry but is a recurring complaint among negative reviewers of dental practices. Effective communicators can provide a positive experience, that in turn leads to higher profits. Patients are more likely to listen to dentists they trust, and will more often choose the best treatment option, rather than a cheaper, quick fix.

Use experienced accountants and financial advisers.

You may be required to look beyond your standard tax return accountant once you have started your own dental practice. Experienced financial professionals – preferably with industry experience – can have a huge impact on future success, as well as getting peace of mind that all regulatory boxes are ticked.

Find the right lawyers to check your lease

How does the competition market themselves, their online presence, the procedures they offer, what are their hours? Having a deep understanding of your competitors will allow you to identify potential points of differences. Whether you are looking at acquiring a dental practice, starting your own or building, researching your competitors can help shape your decision.

Use experienced builders for your dental practice fitout

The advantage of a specialist dental practice design and construction company is the integral understanding of the core needs of a dental practice that comes with many years of experience. Working with professionals through each project phase, from understanding your (and your patient’s) needs, to human-centric concept development, through to construction and fitout, provides a guaranteed outcome for your peace of mind. Having specialists take care of your practice set-up will not only remove you’re the risk and pressure of setting up correctly, but will ultimately result in a practice that is efficient and profitable for the years to come.

Find reliable equipment suppliers

Equipment must be durable while meeting the demands of your functioning dental practice. For example, the dental chair is a key source of income for your practice. If a dental chair is out of order, there is no money generated from that chair for the duration that it is down. Outlaying for a better chair from the beginning can save you in the long run, both on repair costs and ongoing income from patients.

Hire passionate, patient-focused dental practice staff

People are the foundation of any dental practice. From reception and admin staff, through to senior dentists and owners, the people you hire will determine your level of success. Finding staff that have values that align with your own – and those of the dental practice you are planning to grow – will go a long way in helping you achieve your vision.

From a business perspective, there is a lot to consider when deciding to buy or start a dental practice. However, personal factors also come into this. Ask yourself if you would be more fulfilled creating something of your own from start to completion, or fixing an existing space to suit your goals?

When purchasing an existing practice with an existing patient base, some of the risks to be considered are:

  • Disloyal and/or disgruntled patient base – the unknown of what you are inheriting.
  • Dated aesthetics that do not represent you and your vision as a dental professional.
  • Outdated technology – computer software, booking system, admin practices etc.
  • Outdated dental equipment in need of repair/replacement.
  • Structural issues with existing building/fitout.

Alternatively, starting your own dental practice – with all the above factors considered – will allow you to build your own framework and vision, rather than trying to adapt an existing one to your own. This can be slower at the outset, but following the above points can lead to a fulfilling, successful dental practice, the way you envisioned.

There are pros and cons to each scenario, and each individual dentist will be in a unique starting position. While there is no “one size fits all” approach, the friendly team at OPTIMA are happy to discuss your situation and goals to kickstart your 2021 planning, and beyond.