How would you do it?
If you’re thinking about taking the next step in your career and want to transition from a dental associate to owning and running your own dental practice, how would you do it?
With the valuation of existing dental practices rising sharply over the last 12 months (goodwill on practice valuations up from 129% of turnover in Oct-21 to 175% in Oct-22*) coupled with soaring interest rates it may feel like an unrealistic/unaffordable option at the moment.
An alternative to this could be to start your own squat practice – something which more dental associates are considering in the current climate.
Setting up your own dental practice from scratch can be time consuming (more than you’d ever believe). It can test the stress levels of the most relaxed person and is not without risk BUT if you are up for the challenge and the extra responsibilities that come with running your own dental practice, the end result can be extremely rewarding.
There is a lot to be said about starting your own squat practice (far too much to include in one article!). Being able to start from scratch, putting to your own stamp on the practice and not inheriting what was there before enables you to create your own unique work culture by hiring your own staff and setting your own values. Being able to recruit your whole team from scratch allows you to hire the staff that YOU want to work with and you don’t run the risk of taking over a workforce with problematic staff. That said recruitment is very tough at the moment so you’ll need to ensure your offering is competitive.
The downside of starting a squat practice has to be starting with zero patients and no brand identity. This can be a scary proposition, but on the flip side this also means you don’t have to pay additional fees (goodwill) to any sellers. You would be generating your own goodwill and building up your own patient base (and other intangible assets) meaning you reap the benefits of your hard work. So, do you fancy the potential benefits and keen on getting started?
The best place to start would be preparing a detailed business plan. Think about what your goals are for the practice and how you are going to achieve them. Set yourself clear objectives to work towards within a certain timeframe. For instance, attracting X number of patients within the first 3 months.
Forecast your cashflow for the first year or so by noting down expected income and budgeted expenditure. This is something you can get help with from a specialist dental accountant. Note that your business plan and forecasted cash flow will be a crucial element in helping you obtain finance should you require it.
Location location location! It’s a big decision to make when setting up a dental practice. When identifying the perfect site, consider factors like local competition, footfall, parking, and public transport links. All these factors will have implications for the number of patients you are able to attract. A swanky new dental practice is nothing without its patients.
It’s very unlikely that you will find a purpose-built dental practice in your ideal location, so keep an open mind about converting from one building class to another. The continuing trend of high street shops closing here may provide you with the perfect opportunity. If you do go down this route you will need to ensure you follow the relevant planning permissions and building regulations.
Thinking about the equipment you will need to offer your planned services is something to consider at an early stage. Knowing exactly what is needed and for how much you can realistically get that equipment for (whether that be a specific dental chair or an X-ray machine you have been eyeing up) will mean you can budget for it.
Buying equipment all at once for a dental practice is clearly an expensive ordeal, so do consider buying pre-loved items to keep the costs down, even if that’s desks or chairs for your office – keeping an eye on local social selling sites may just save you some pennies!
The chances are that to pay for things like the building (if buying), renovation costs, equipment, and to fund your initial working capital (and don’t forget those hidden costs!) you will need to obtain finance. The good news is that plenty of funding options are available for dentists as it is still a very favourable industry among finance providers from both high-street banks and alternative providers.
When you run your own business there are so many rules and regulations you need to abide by such as (but not limited to) health & safety, building regulations, employment law, CQC, GDPR, tax law etc. The best advice we can give is to surround yourself with expert advisors – you need a good accountant (hopefully us!), lawyer, bank manager, architect, compliance advisor to ensure you set off on the right tracks and who you can continue to call on for assistance throughout your career.
And finally – imagine opening those doors for the first time, treating your own patients in your own practice! If you want it, go for it!
Contact Heidi for further help and advice.
*per goodwill statistics provided by National Association of Specialist Dental Accountants and Lawyers (NASDAL).
