The journey of a lifetime
Owning a dental practice is the most rewarding phase of your professional life. By providing essential health care and cosmetic dental treatments to the general public, you will grow as a dentist and help to build your community.
With your own practice, you are able to experience the rare thrill of establishing a legacy within the medical community – allowing you to affect change on the ground-level of this amazing industry. Through your passion and dedication, you will found a practice that enhances the lives of thousands, while also providing for your family.
Whether you are looking to buy or start your first – or next – dental practice, Samera Business Advisors are here to help you to achieve your goals and build your future. For our friends who are looking to embark on the voyage of dental practice ownership, we hope that this guide helps to start you on the path to your future in dentistry!
I have spoken to many dental professionals over the years who have been wary about taking on the responsibility of buying or starting a dental practice. My advice is always to take the plunge if you have a desire to own your own business. Success and profits are far easier to come by if you are in charge of your own destiny. There are several reasons why this is the case.
What is your ‘why’?
As we mentioned earlier, many dentists who are buying or starting their first practice factor in a sense of legacy into their decision. Meaning, they want the ability to form a business – based off of quality and trust – that can stand even after they are gone. In fact, we’ve recently seen a huge upswing in family-owned dental practices going back generations for that exact reason.
Perhaps “legacy” isn’t your motivation though – maybe you simply want the ability to determine your own future, without having a “boss” constantly over your shoulder?
In order to begin a dental practice, or any business, it is important to examine your own motivations first. Only by understanding your motivations (your own “why”) will you be able to design your practice to facilitate those goals.
Have a good conversation with yourself and ask what your personal objectives are … Are they financial, or more about your quality of life (spending time with family etc.)? Where do you want to take your practice? Who do you want to help?
Benefits to owning a dental practice
There are many answers to the question “why do you want your own dental practice?” – and none of them are wrong. However, there are some crucial benefits to dental practice ownership that make it an incredibly enticing opportunity. Are any of these concepts a motivator for you?
You are your own boss
This is easily the most common answer we hear. When you own your own practice, you have the ability to control every aspect of the business – from staffing, to the exterior bricks and mortar. You write policy, you determine the standard of care, you are in direct control of the wellbeing of your patients. For those of us with the fortitude to shoulder these responsibilities, practice ownership is a dream come true. Are you ready?
Build the work environment of your dreams
“Office politics” is listed as one of the top reasons for being dissatisfied at work. Through ownership, you can craft the work-atmosphere that you’ve always wanted, with people you hand chose, working a schedule that you decided.
Earn more money
At this stage in your career, it should come as no surprise to you that the vast majority of dental practice owners earn more than their associates. By being your own boss, and potentially managing an entire team of associates, you will maximize your practice’s earning potential by servicing more patients without you having to personally do the work yourself!
Money may not be everything to a dedicated dental professional, but ideally no-one does all that training to settle for less than they are worth. I have seen dentists who are associates and struggle to live a comfortable life. This is not the case for dentists who invest in their own practice.
- Earnings are higher than for associates.
- Equity is always in place.
- Owning means that wealth can grow.
Who would not want to benefit from all of these? Many professionals already have them. At the time I am writing this, there are 12,034 dental practices in the UK, with an expected revenue for 2018-19 of £6.8bn. The question I’m asking is, can anyone really afford to miss out on being part of this exciting growth industry?
Ownership = actual wealth
Having money does not make you wealthy. Wealth, actual wealth, comes from the ownership of assets – things that make money. Historically, the two most profitable assets to own have always been real estate and/or a business. When you own a dental practice, you actually stack these powerful investments on top of each other, giving yourself a “super asset”. This super asset will accumulate value over the course of your successful career, all while you are earning a significant income for your family.
Remember this equation: (successful assets + a positive income) x time = wealth
Business ownership comes steeped in tax incentives. These are benefits afforded to dental practice owners because they are providing a valuable service to their community. These tax-breaks allow you to free-up capital to reinvest in your business, further growing your assets. In fact, one of the most effective ways many of our clients have successfully grown their practice has been by simply taking all of the money they save in taxes, and immediately putting it back into their practice – thinking of it almost as a “automatic business savings plan”.
Tax is an unavoidable burden for most people, but it’s possible to optimise a tax position by starting up a dental practice. I often find myself advising clients about the numerous tax deductions they are eligible for once they are running their own dental practice. These deductibles include:
- Staffing costs such as salaries.
- Insurance and banking and interest costs.
- Marketing expenses.
- Energy and other bills.
It’s easy to see that all the important costs of setting up and running a dental practice are tax deductible. Take a look at the UK government’s website for the full list.
And those are only a handful of the hundreds of reasons why dental practice ownership is not only the “more fun” option, but also the most financially sound decision you can make.
Funding is easy to set up
If anyone does not believe me, try it. Securing a practice acquisition loan is not as hard as people might think. Do not let a limited net worth, a mountain of monthly expenses or a significant amount of debt be a problem. There are options for dental loans out there, and they do not come with extortionate rates of interest.
I have helped clients to secure funding numerous times and I know that funding acquisition should never be seen as a mountain that cannot be climbed. The opportunities are there to be grasped with both hands. Our team of commercial finance experts help dentists everyday raise finance for start up’s and acquisitions.
Low cost practices are available
I’m not going to pretend that anyone will find the ideal practice to buy right on their doorstep, unless they are very lucky. For any dental professional whose goal is to be successful, this should not be a problem.
In popular urban locations, practices can be priced at the higher end of the spectrum but rural areas can provide the best value for money. For instance, it’s possible to pay significantly less for a practice in the Cornish landscape than it is for one in London.
Finding a dental practice for sale that is excellent value may involve moving across the country, but it provides the perfect opportunity for skilled professionals to build a reputation, profits and wealth
An Opportunity, not a Risk
Starting or buying a dental practice is not a risk to be avoided, it’s an opportunity to be embraced. I have been in this business for many years, and I have seen clients transform from being an associate dentist getting by on the job from day to day, to a successful business owner using their skills while also obtaining the large financial rewards they deserve.
Welcoming the opportunity to set up and grow a dental practice is just the start. Then it’s time to complete the work of setting up a practice. I will talk about the steps that need to be taken in the following chapters. They are:
Why wouldn’t you want to own a dental practice?
Sadly, there are many people out there who cannot handle the responsibility of owning a dental practice – so they often feed the rest of us their excuses.
“It’s too much work.”
“It’s too stressful.”
“I’m not ready.”
What’s worse – they will often make up ways to rationalize their own inability to further their careers; blaming it on ridiculous things like their staff or even lenders! Here are a few things that, if you’ve been listening to “the haters”, you might not know.
Myth: Lenders hate dentists – FALSE
Some people are reluctant to own their own practice because they believe that financing is unavailable, which is absurd.
Financing the purchase of your dental practice is almost always an easy process. Since you provide a valuable commodity, not only to the bank but also to your community, institutions want to do business with you and have plans in place to attract (and keep) your business.
Truthfully, most dentists only have problems navigating the bureaucracy of their banks. However, most paperwork can be easily side-stepped if you use a qualified business advisor. In fact, Samera Business Advisors work with several financial institutions that understand dentistry, and help many buyers that have little (or zero) net worth to begin with!
As a result, practice acquisition loans are readily available at very competitive interest rates. So, even if you zero collateral to bring to the negotiation table, large indebtedness, or a hefty monthly budget … Don’t panic – there is financing available for every situation.
Myth: You can’t buy a practice for the right price – FALSE
When you buy a dental practice, you can get some pretty incredible bargains if you work for them. Most dentists achieve such great rates for the purchase of the future practice due to a few of the reasons we’ve already mentioned (how ownership builds wealth, supports communities, etc.).
However, today it is easier than ever to purchase a dental practice. Whether it is the practice you are currently working in – or a practice a broker has suggested – there are quality practices available for the smart buyer.
Is owning a dental practice worth it?
Whether you are buying your first – or next – dental practice, ownership of your own dental practice is one of the most rewarding experiences that the medical industry can provide. Being able to offer essential dental care and treatment to your community will be as rewarding you to personally as it is to the public. As long as you can attack your new platter of responsibilities as a business owner head-on, you should answer the question above with a confident, “absolutely.”
However, owning your own dental practice requires many, often tedious, tasks that are as confusing as they are strict.
Are you ready?
When you own a practice, you need to be good at many things other than dentistry. You may need to deal with complaints, sickness, CQC, Health and Safety, debtors, invoicing, marketing and all of the other trappings of owning and operating your own successful dental practice.
Ask yourself – and be honest – do you have the skills to manage these tasks?
As long as you are straightforward with yourself about your skills as well as your limitations from the beginning, you will go far as a dental practice owner – with a career hopefully spanning decades.
But, it is often difficult to think that far in advance. You need to know what the next 30 or 40 years of your career will look like!
More on why dentists want their own practice
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