Starting a Dental Practice
Starting a dental practice can certainly be an overwhelming task. What documentation do I need to complete? Am I in the right location? How will I do marketing? What type of equipment do I need to buy? What if I fail? These are just some of the many questions going through your head. We have solutions!
Entity Formation, Secure Licensing & Legal Work
Dealing with the legal requirements of opening a dental practice should be prioritized as soon as possible. It can take months to secure the paperwork and credentials needed to operate as a dental practice in the United States. This is especially important if you need to register to be accepted by private and government insurance providers.
It’s also very important to secure the proper license in your state, have a national provider identification number, register with the DEA while complying with other local regulations that are different depending on the area your practice is located. O, and don’t forget you’ll be required to choose a legal structure for your business and register for state and local taxes.
We provide Entity Formation, Licensing, and Legal services.
What is Your Budget?
If you’re wondering, “What does a dental practice cost?”, it can be anywhere from $250,000 to $500,000 depending on the location, type of equipment, and renovations you want. This is a very large sum of money and will in most cases require you to apply for a loan.
A big mistake many start-up dentists make is to underestimate the initial cost of getting their business started. This can very quickly result in scrambling for additional funding with high interest rates or maxing out credit cards.
It’s very important that you estimate as best you can for initial costs to get your office up and running, and to sustain day-to-day operating expenses for the first few months. Don’t forget to anticipate any unexpected costs in your estimate.
Location, Location & Location
Location is one of the most important things to consider when starting a dental practice. The socio-economic class of the community you are in will determine the type of services you can provide, what you can charge for your services, how you should approach your marketing strategy and so much more.
You also need to make sure you are located in an area that is not already overly saturated with established dental practices as it can be a struggle to gain new patients. These things all have a direct impact on your revenue which is why picking the right location has always been so important.
Purchasing the Right Equipment & Supplies
Furniture, equipment, software, supplies are just some of the requirements you will need to think of. This will determine the type of practice you will have, your brand, the services you provide, how patients will interact with staff, and more.
We provide Consulting services for Dental Practice Purchases.
What type of staff do You Need and When?
When starting a dental practice, you need to start thinking about hiring before you’re ready to move into a new office; make time in your schedule to screen and hire candidates for your new business. These people will be the gears of your system and if you do not choose the right people, it can seriously impact the success of your dental practice. Beyond salary, other considerations you’ll need to budget for are health insurance, time off, and other benefits.
We provide Practice and Staff Management Consulting services.
How will You Attract Patients?
Without patients, your practice is just a building, but we are sure you don’t need us to tell you this. When starting your own dental practice, you will need to have marketed your practice, gotten the word out about your services, and secured that first line of patients.
A dental marketing agency is a very efficient way to achieve a constant flow of new patients while building a polished public reputation. Having a great website, local print, TV, and radio stations, as well as online, are all ways you can advertise your practice.
We provide Consulting to help you find the best Dental Marketing Agency for you.
What Is the Dental Practice Failure Rate?
To become a general dentist or specialist requires many years of education and a significant amount of financial investment. That’s why it’s understandable why the question of failure rate is asked so often. Dentists should feel confident in their future success as they are in a promising profession. The failure rate of dental practices is less than 3%. That being said, the risk of mismanaging funds or not adequately planning for financial success remains. That is why most dentists make use of a dental CPA to ensure the highest probability of success.
Should I Buy an existing Dental Practice or Just Start One?
The first question you should ask yourself is how much financial risk you’re willing to take on. Some buyers are more willing to start from scratch, they spend a half-million dollars, open the doors, and struggle to get patients. That being said, the failure rate for dental practices is less than 3%. So if you are looking to build your own empire and find the right location, at the right time for the right price, then starting your own from scratch certainly has its benefits. This is especially the case if you want to avoid buying a practice that someone else has created bad habits in.
There is, however, less risk in buying an existing practice because you have cash flow already built in. You’re taking on about the same amount of debt you would be if you’re starting one up, but you have cash flow already. So it’s just a matter of whether you can find a good practice in the right location. Our experts have seen again and again that the most important thing when buying a practice is the location.
If you want more information on whether you should buy a dental practice or start your own, we provide an in-depth discussion on our podcast, Beyond Bitewings.
Should I Buy or Lease a Vehicle as a New Dental Business Owner?
If you’re going to use that vehicle for more than 50% for business, then you should buy it. If it’s less than that, then leasing it will probably give you a lower monthly payment, which will benefit cash flow. Keep in mind that the IRS does acknowledge that doctors use their vehicles for business to some degree. However, they’re willing to accept somewhere around 25%, but not 50% or more unless you own multiple practices, which requires you to drive to various locations. If, however, you own one dental practice, we can justify a deduction of about 25% of the vehicle’s operating cost, and leasing it will then provide you a lower monthly payment. If you have multiple practices, you can justify greater than 50% business use, and you would get a bigger deduction than by purchasing the vehicle.