An Important Message for Young Dentists Who Want to Buy a Practice
When most dentists envision buying a practice they see the process as being a quick turnaround transfer of power: “I give you the money, you introduce me to your staff and patients and then hand over the keys.”
Indeed, if you have the right experience, the business know-how and the ideal economics behind you, then you might be able to make it work that way.
However, while this turnkey approach is the fastest path to full ownership, it also brings with it the highest risk. For one thing, it gives you a short time for an ideal transfer of goodwill. An older, retiring doctor is likely to have older patients and staff members who are less inclined to stick around for a change in ownership.
Consider that you’ll have to hit the ground running and ramp up your productivity quickly if you are to have any chance of matching the established owner’s revenue level. Not only do you have to keep up with what the previous owner produced to manage expenses, you have to also produce enough on top of that to service the debt from your purchase.
That’s why I advise young dentists who are looking to buy a practice to consider a more measured, progressive “transition” approach because it offers an effective counterbalance to all these risk factors. By structuring a buy-in over three to five years you have the opportunity to build goodwill over time and really get to know the patients in a low-pressure situation. You also build strong working ties with the staff.
Best of all, by going through a transition you buy yourself time to increase your clinical and value skills, as well as, your confidence in presenting ideal care as you grow under the guidance and mentorship of the established dentist. When the time comes for the final transfer of ownership, you and the practice are ready and the transition is smooth, seamless and practically guaranteed to succeed.
The transitioned approach greatly improves your chances of getting the practice of your dreams. Let’s face it, the most sought-after practices—the ones with the best technology, a thriving patient base and a proven capacity for generating growth—are out of reach for most first-time buyers. The only way to get into this kind of practice is to work your way into ownership over time through a process that provides the economic support you need and protects the value of the practice for everyone. It may take a little longer, but in the end you’ll be way ahead of others who settled for less just to get their name on the door right away.