Some say it’s a good time to become a dentist. Consumers are putting more value on their health, and spending more dollars on health related services, including oral health care. With our aging population, those health care needs will only increase. Today’s dentistry graduates have a wide range of options available to them, but with all these opportunities, it can be hard to know which path to follow.
If you are a recent graduate, you may feel a lot of uncertainty at this early stage of your career. We have all been there. Should you set up a new practice? Buy an established practice? Associate with an established dentist? What other options could you pursue? New dentists are subject to a great deal of advice in their early years in practice, so this column is written to provide some clear perspective on the advantages and disadvantages of buying a practice versus setting up one for yourself.
Setting Up a New Practice
There are several favourable reasons to start a practice for yourself. You and you alone, not a previous owner, will select the location, an increasingly important factor. The colours, equipment, forms, staff, and many other elements are totally within your control. New patient exams commence with precisely the philosophy you choose to employ, right from the outset. Each new patient will understand the policies and procedures without suggesting that it was not that way under previous ownership. And the list goes on. These are a select few of the advantages of building a practice from scratch, and for some dentists, they outweigh the disadvantages.
Of course, setting up a new practice requires patience. It also requires the ability to service debt, often exceeding a quarter million dollars these days, for several years without profits. Waiting for patients to discover the new location can be a long, expensive, and frustrating experience for some.
Buying an Established Practice
The number one advantage for buying an established practice is cash flow. The allure of cash flow is greater than most other elements of owning an established business. We all know that material items can be replaced, often within days if needed, and they are simply tools of our profession, but ask any business owner what they value the most, and they often mention a predictable income.
On the other hand, an established practice has many long-standing policies that are difficult to modify. There are thousands of practices in Ontario, each with their own unique styles. Clinical philosophies are unique to every practice. And further, an established practice employs many individual business systems, including staff configuration, office policies, hours of operation, charting systems, clinical and sterilization protocols, payment policies, recall programs and many more procedures with which you may not agree.
When you are ready to start your practice, you have two choices: purchase someone else’s practice, or accumulate your own income stream. One choice allows you to jump into an established business that will provide you with cash flow up front. The other lets you build your practice from the ground up, and you’ll have complete control. Your personal style and situation will be the determining factors for which route you choose.
Ontario Dentist – April 2003