In my last blog, I outlined some areas to consider when looking to buy your own practice. I will now go into a bit more detail on the initial points raised starting with probably the most important question – Why do you want to buy a practice?
In my experience, the answer usually falls into one of two categories, and they are either OPPORTUNITY or AMBITION (sometimes it is a combination of both).
You have been ticking along very nicely working in your current practice when the Principle announces he or she is considering retiring or moving on and would you like to buy the practice? A decision frequently faced by Associates. You would be amazed how many times I have received an enquiry from an Associate wanting to borrow a considerable amount of money to purchase the practice where they are currently based, without a clue as to how the purchase price has been calculated or what is involved in the purchase. Valuation, process, costings etc. can all be sorted, but the main point is how it will change your whole working persona.
Maybe you have worked as an Associate for some time and have become more involved in the management side of things. You see the current limitations of your position and have ideas of how you would do things differently if you were in charge. Wanting to build a better future for yourself and your family.
You have some funds saved and can count on financial support from another source. The time seems right to venture out on your own. If buying a practice then thoughts need to turn to such things as, overheads, turnover, profitability, cash-flow, staffing, marketing etc. You move from being a dentist with no business worries to a business person that carries out dental activities. Consideration needs to be given as to this will affect family and friends, your social life, personal finances plus the effect on your normal working life.
Buying a practice is likely to one of your most important financial as well as life-changing decisions you will make. A misinformed or hasty decision can cause financial distress and a career with unnecessary emotional stress and struggles. You must focus on the business operations and be prepared to make good, and often difficult, management decisions. Speak to friends or colleagues who have already made the leap of faith and do not hesitate to seek independent advice.
The Dental Practice Consultancy Service offers free initial advice, and with over 25 years industry experience we are certainly aware of the difficult decisions you need to make. We can understand your needs, goals, professional experience, areas of interest, and timeline. Contact us today and let us take that first step with you.