How To Have A Successful Dental Practice From The Beginning
Starting a dental practice from scratch is not easy and it something you shouldn’t do alone. Dental transition experts, Matt Scherer and Adam Goldsmith share tips on how to get started on the right foot.
Matt and Adam provide an in-depth look to what can be expected during the first year of building a dental practice.
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Transcript:
Matt Scherer:
Hi, my name’s Matt Scherer. I’m with PMA Practice Transitions, and I assist dentists in transitioning out of ownership and certainly help buyers buy practices in the state of Ohio and Western PA. I have my colleague Adam Goldsmith on with me, and he does the same thing down in Indiana and Northern Kentucky. And Adam, today’s topic, starting a practice from scratch. What should I expect? Tough one, right?
Adam Goldsmith:
Oh yeah. I mean, there’s a lot to expect. A very time and capital intensive endeavor, no doubt. Starting a practice from scratch means that you’re going to have to invest a quarter of a million dollars in all the build out equipment, dental software, furniture, cabinetry, sundries. I mean, the list goes on and on and on, and that’s just the fundamentals. Not to mention, you don’t have a single patient to your name coming through the door just yet. So likely you’re going to have to invest considerably in marketing the practice in order to generate new patients to your new operation. There’s a lot of other things. And Matt, if you want to chime in on a few other things that come to mind?
Matt Scherer:
Yeah, the biggest thing is I would not go into this endeavor alone. There are experts out there that help with startups and kind of guide you through, you know, which equipment company I should use. Have you ever hired an employee? So how does that happen? How do I do that? Things of that nature. And as Adam stated, all in when the project is done and you’re ready to open your doors, you’re probably saddled with about a half a million to maybe 550,000 in debt. Because that’s what it takes in today’s world to really start a practice from scratch, unless you buy used equipment, things like that. You can certainly do it cheaper, but the average loan is somewhere in that 450 to 550 range to start.
Matt Scherer:
And then you’ve got to get a marketing plan together. You’ve got to hire the staff. What I see a lot of times is you want to hire a hygienist right away and you have no income coming in. So when you start the practice, you’re probably going to have to do the hygiene for a while, until you can get up and going. Unlike buying an existing practice, certainly not against startups, there are some benefits to doing a startup versus buying a practice. But obviously, the biggest negative to starting a practice is there’s no income, so you’ve got to go out there and you’ve got to generate the income. When you buy a practice, obviously you’re taking over a machine that is already generating income, and that machine consists of the front desk person, the hygienists. And a lot of times, that’s what the patients are coming back to see, right?
Matt Scherer:
So with starting a practice, you’re starting from scratch, which can sometimes be a benefit, as well. Because you’re not buying somebody else’s skeletons, if you will, if there are any in the closet. You’re starting from scratch, you’re hiring the people, you’re training them to do what you want them to do the right way, versus taking over for somebody and they’re used to doing something the way the seller wanted them to do it. Any other?
Adam Goldsmith:
Yeah. Yeah. I might add, you’re going to have to assemble your team. You’re going to want to make sure that you have your CPA that you know and trust, an attorney that you know and trust. There’s a lot of behind the scenes business tasks that need to be completed before you get up and running, as well. Making sure all your systems process and protocols are in place, all the staff training, obviously working with all your vendors and your suppliers, working with landlords to determine a good location, advisors on the HR matters, getting a handbook put together, make sure that’s in place, any type of retirement plan you might want to create for your staff, working with the financial advisor, investment advisor in that capacity, and then any of the insurance credentialing that ties along to being an in-network provider. I mean, that in itself is a lot of paperwork.
Adam Goldsmith:
So there’s a lot of things that you have to consider, starting a business, a dental business, that are more clerical or secretarial in nature that you have to cross off your task list, as well.
Matt Scherer:
Yeah. Great points, Adam. Certainly starting a business from scratch, a dental practice from scratch, is definitely going to be probably a little bit more challenging than purchasing one that has been open for the last 30 years. So great points. And if you like the topic, please give us a thumbs up, share it with your colleagues. You can also visit us on our website, PMAgroup.net. And certainly if you’d like to talk to Adam or myself, you can certainly call us and we’d be happy to spend some time with you. Thanks.