Considerations and Steps for Dentists Starting Their Own Practice
Embarking on the journey of building a dental startup can be an exciting and rewarding venture for dentists. While joining or purchasing an existing practice may be a common route, many dentists prefer to start from scratch to create a practice that aligns with their vision. However, launching a dental startup requires careful planning, investment of time, talent, and capital. In this article, we will explore the reasons why building a new practice may be the best option and provide essential steps for success in launching a dental startup.
When building an all-new practice may be your best option:
1. Lack of suitable existing practices: Dentists who have extensively searched brokerage websites and reached out to dentists in their desired area without finding a practice that meets their requirements may find that starting from scratch is the best option.
2. Size and capacity limitations: If dentists want to hire multiple associates and hygienists and require a specific number of operatories, existing practices may not provide the desired size and capacity.
3. Outdated practices: Available practices may be outdated and require significant renovation and equipment upgrades, which can be more costly and troublesome than starting anew.
4. Limited growth prospects: Practices for sale in certain neighborhoods may have limited potential for attracting new patients, making it challenging to build a thriving patient base.
Launching your dental startup: 7 essential steps for success
1. Do a thorough demographic analysis: Conduct a comprehensive analysis of the demographics in your desired area to ensure there is sufficient potential for growth. Look for areas with a dentist-to-patient population ratio of at least 1:3000 to support your practice’s success.
2. Find a good location: Seek office space in a convenient location for patients and dental team members, with dedicated parking. A highly visible location, such as near a busy intersection, can help attract new patients. Consider hiring a real estate professional to assist in finding suitable spaces at the best price and terms.
3. Work on financial projections: Develop financial projections for the first, second, and third years of your practice. Determine the rate of growth needed to achieve healthy earnings and cover operating expenses, including loan payments. These projections will help you have a realistic understanding of your practice’s financial viability and facilitate discussions with potential lenders.
4. Line up funding: Secure funding for your dental startup, taking into account the loan limits set by banks and the need for a capital investment. Newer dentists may face challenges in securing financing due to limited business credit or a lack of clinical experience. Explore options such as traditional loans from the U.S. Small Business Administration (SBA) and consider seeking guidance from a financial mentor specializing in startups.
5. Build your practice while working: If feasible, continue working as an associate while launching your new practice. This allows for a steady income stream while building your patient base, reducing financial stress during the initial stages.
6. Tap into your dentist network: Connect with other dentists who have experience in buying or building practices. Local dental societies and online groups can provide valuable insights, resources, and networking opportunities. Learn from their experiences, seek recommendations for service providers, and gather practical advice to navigate the challenges of starting a dental practice.
7. Harness the power of community: Leverage your professional and personal networks to find individuals with specialized skills that can support your startup. Business coaches, branding experts, digital marketers, and financial planners can provide guidance and support as your practice takes shape. Additionally, explore money-saving opportunities through professional networks, such as discounts on goods and services offered by organizations like ADA Member Advantage.
Conclusion:
Building a dental startup is a bold career move that offers dentists the opportunity to create a practice that aligns with their vision. While purchasing or joining an existing practice may be a suitable option for some, starting from scratch allows dentists to have full control over their practice’s design and direction. By following the essential steps outlined in this article, dentists can increase their chances of launching a successful dental startup and realizing their professional goals. Whether choosing to build a new practice or pursue other avenues, dentists can find support and resources through organizations like the ADA’s Practice Transitions service, ensuring a smooth transition into their desired practice setting.
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