If you don’t want to be an associate or employee dentist for your whole career, then you’ll need to own a practice of your own. And you should! Not only is it sweet to be the boss, but you’ll make a LOT more money as an owner than as an associate.
But do you build a brand new practice? Or buy an existing one?
Both are great ways to make more money, pay off student loans, and build real wealth over your career. So for young dentists the question often comes up: should I build or buy? There’s no shortage of opinions in dental forums, but let me give you my two cents as someone who has spent over a decade helping dentists buy practices.
3 Reasons to Buy
LESS STRESS AND ENERGY
In physics, the law of inertia tells us that it takes more energy to stop or start motion than to maintain it. It’s why your car gets better gas mileage cruising on the highway than in start-and-stop traffic.
A dental office is a lot like that car. If you step into the driver’s seat of one that’s already cruising, you’re giving yourself a head start. Building a practice from scratch means that you have to oversee construction or renovations, buy equipment, hire staff, implement systems, and ten thousand other big and small things that have to happen for a practice to work. Buying a practice means all of that stuff is already done.
That’s not to say buying a practice is stress free! There’s still a learning curve. But that curve is a lot less steep for the new owner of an old practice.
HIRING IS WAY HARDER THAN YOU THINK
Your staff is vital to the success of your practice. If you’re buying an existing, successful practice, then you know that the staff there is at least competent, and maybe outstanding. If you start a new practice, you’ll need to put that team together and hope that you do it right.
Take it from someone who knows: hiring the right employees is difficult, time-consuming, and risky. If you don’t get it right, your practice is up a creek.
New owners of existing practices have to deal with staffing too. But if you need to backfill one hygienist position, your odds of making a hiring mistake that tanks the practice is much, much lower than if you need to hire all at once several hygienists, a dental assistant, a front desk employee, and so on.
MAKE MORE MONEY FASTER
You probably got into dentistry because it’s a reliable and lucrative career. You took out student loans, now you’ll get a practice loan and maybe a home loan, and you’re looking at a mountain of debt that has to be moved before you can start building wealth. Start now, not later.
If you buy a practice (especially one that we sign off on) then you’re stepping into an instant profit generator. On the other hand, if you start a new practice, it usually takes at least a year or two before you start breaking even, let alone make a big profit. That’s time that you could have been paying off loans or saving and investing money that will begin accruing interest.
Over a 30-year career, assuming a successful practice, both the buyers and builders will make lots of money. But the buyers get a head start.
1 Reason to Build
“But Brian, won’t I feel so much more satisfaction if I build my own practice? Won’t I feel more pride in having my very own place from the start?”
Maybe!
The best reason to build a new practice, in my experience, is that you’re a true entrepreneur. You get immense satisfaction from the hard (and I do mean hard) work of building something from the ground up. You love setting and working toward long-term goals. You absolutely thrive on digging into spreadsheets, solving new problems constantly, chasing numbers, and so on. Conflict? Stress? You eat them for breakfast (then brush and floss thoroughly).
Does that sound like you? Maybe it is! But from what I’ve seen in the last decade-plus, the number of dentists who fit this mold is lower than dentists like to think. They’re out there! Maybe they’re you. But you’d better be sure.
And I’ll be clear on one final point: Building a new practice is by far the tougher route, but that doesn’t mean buying one is a cakewalk! If you think you’ve found a good practice to buy, let us know. We’ll be your advocate through the entire process and make sure you hit the ground running in the next phase of your career.
