advice regarding new dental grad opening a practice

[Utdarsenal]

Hey guys, just here seeking some advice from those of you who have "been there, done that".

I just recently graduated from dental school and am about to finish with my licensure exams. I thought I'd be feeling much better at this point, but it really seems like I have more doubts about my future than ever before.

I have a few friends that graduated 2 years ago or so and have already purchased a practice. IMO in a sense it's good, because they're kind-of throwing themselves out there.. but realistically, when do you know it's time to be your own boss? What's the hardest part about it? How do you know if you're ready?

I'm a little overwhelmed by a lot of things new dentists have been telling me, a big one being "watch out for debt"- as well as saving up, being careful with money, etc..

It seems like the real world (outside of being a student) is about to smack me right in the face, hard.

I need all the advice I can get.. please pass that knowledge along! 🙂

thank you

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[TanMan]

Personally, I think its a horrible/stupid idea to buy an office unless you get it for a really really good price (usually sick dentists will sell for low, but its more of a fixerupper type of office). If your classmates haven't sold their equipment, buy the things you're gonna use in your own office in the future for CHEAP. Don't buy useless things like surveyors and articulators. $$ items include porcelain polishing, handpieces (electric), endo (except spreaders).

Use your training and knowledge as a baseline for your procedures, but you'll be using your first job as training to get faster, more efficient, and profitable.

It's time to be your own boss when you have enough money to start your own office and you're sick for working for someone else. Hardest part about it is trying to enter the market and beat everyone. You're ready if you have enough money to start and want to make more money than your current job. You'll have to want to work hard to make lots of money, but the rewards are much much more than just working for someone else.

During your time at an associateship, use that time to experiment with different materials, instruments, and techniques, and see what works best. Also the best time to make mistakes... rather than in your own office.

Debt isn't hard to manage; I made the awful mistake of paying my debt fast in the first few months... BAD BAD mistake. It'll slow down your ability to accumulate capital to start your own office. Once you get your own office started, it'll take at least 4-6 months to fill up your schedules and break that 100k barrier.

Long discussion here: AMA - Practice startups and early retirement

 

[charlestweed]

Just do it. Isn’t your goal to become a dentist is to have your own office and to become financially independent? The longer you wait, the longer it’ll take to achieve that goal. Don’t let the lack of experience deter you from starting your own office. Most of us, dentists, here didn’t have any business experience when we started (or purchased) an office. Having our own practices has forced us to teach ourselves. I don’t think you learn by reading books, asking advice on this forum, hiring a consultant etc. You’ll learn from trial and error…..from your own successes and failures. When it’s your own office, you will be more motivated to work hard to keep the business successful. You don’t mind working on weekends and going home late. You don’t have such motivation when you work for someone else.

I have the experience of both. I started my first office from scratch. And I purchased an existing office 3 years later.

The most depressing thing about starting a new office is to have an empty appointment book and still have to pay bills and staff salaries. It’s depressing when the patients didn’t accept the tx and went somewhere else even when I spent a lot of time talking to them. That’s because I was new and they didn’t know anything about me. So to attract more patients and to keep my staff busy, I had to charge low fee, ask for a low down payment, and accept HMO and medicaid. Doing something is better than sitting around doing nothing. Getting paid something is better than zero. At least these small down payment amounts helped me pay the bills.

What I didn’t like about purchasing an existing practice were the inefficiency and the high overhead. The existing assistants were slow and lazy because they got used to the slower working pace of the previous owner. The owner was on a retiring mode so she didn’t care much about the high overhead or the health of the practice. A few months after I took over the office, I had to let go all the chairside assistants and trimmed down the overhead. I don’t mind about this existing office’s old equipment because I used to work for a chain that had worse equipment.

 

[Rishi Garg]

@Utdarsenal- Here's a link to a series of articles about buying versus setting up your own dental practice. We interviewed a recent grad who had the same problem you did. They ended up starting from scratch. Hope it helps! Clineeds - Setting Up Your Practice – The Benefit of Using a Dental Contractor vs. General Contractor; Buying A Dental Practice

 

[2TH MVR]

Running your own practice is the same as running a small business. Do you understand anything about running a small business? Probably not. My advice: associate 1st for 6-12 months. Learn the business side. Obtain a dentist specific accountant and start to pick their minds on successful practices. Go to lunch with the "successful" practice owners (like Tanman 🙂. Get some pointers. Get a good financial planner.

Learn. Learn. Then buy that 1st practice. Not sure about starting from scratch, but it seems logical to find a well managed practice that needs your new energy for a good price. DO NOT overpay for the practice. Pick the right location. This will be the most difficult task.

I started 3 different practices from scratch, but that was only when my main office was doing well and I could afford to open satellites.

 

[coldicecream]

Running your own practice is the same as running a small business. Do you understand anything about running a small business? Probably not. My advice: associate 1st for 6-12 months. Learn the business side. Obtain a dentist specific accountant and start to pick their minds on successful practices. Go to lunch with the "successful" practice owners (like Tanman 🙂. Get some pointers. Get a good financial planner.

Learn. Learn. Then buy that 1st practice. Not sure about starting from scratch, but it seems logical to find a well managed practice that needs your new energy for a good price. DO NOT overpay for the practice. Pick the right location. This will be the most difficult task.

I started 3 different practices from scratch, but that was only when my main office was doing well and I could afford to open satellites.

bringing this thread back alive

you mention working for 6-12months, so then would you only make a small payment towards student loans and keep the rest of your salary to get a new loan for your own practice? I assume banks want to see you have some cash on hand before handing you a six-figure loan.

 

[2TH MVR]

bringing this thread back alive

you mention working for 6-12months, so then would you only make a small payment towards student loans and keep the rest of your salary to get a new loan for your own practice? I assume banks want to see you have some cash on hand before handing you a six-figure loan.

You have to gain some dental practice experience. Also ... working for 6,12,18 months or whatever will give you time to find the RIGHT practice or situation. Working gives you insight into the business workings of a dental practice and to build clinic speed.
You''ll have to discuss your student loan situation with a qualified financial person.
When it is time for a practice loan .... banks are well aware of your less than favorable asset situation, but banks also know that financing dental practices has been historically a good investment for banks.

1st: find a good bank to start your financial relationship with. From experience ... I would start with Wells Fargo or Bank of America. I would stay away from US Bank, Northern Trust, to name a couple. Contact the ADA. They will also have a bank that they endorse. You could also contact some of the smaller banks. Once you find that bank. Build a business relationship with them. They will want all of your personal and business accts. Credit card processing acct. With the loan .... the bank will use the practice fixed assets as collateral and ask you and your wife (if married) to sign a personal guarantee. Term limits are usually defined. An SBA loan can give you easier terms. It's like anything in the financial world. The better your financial situation .... the better your loan rate is.

Also ..... please find a dental/medical accountant to guide you. They are invaluable.

Banks know you are a poor, in debt dentist. But they know historically dentists have always done well with their private practices.

 

[MaxAnn]

I would begin a startup or acquisition an office as soon as you're financially able to do so. The old associate model of dentistry is dying mainly because it's professionally useless for any associate or owner to have a doc work 1-2 years, build a patient pool, and move on. Patients hate having new docs just show up and working in their mouths.

Just my opinion, but partnerships or buying into an office (let's say for 1/3) and slowly buying the elder doc can work if you have the right practice in mind and the owner is looking to slow down. Of course, you have to put these things in writing so there's a definite finish line.

Any of these scenarios is better than working for a corporate entity or DSO in my humble opinion. I have no idea why the ADA hasn't stepped up and worked to shut those places down; they're virtual dental **** shows.

 

[2TH MVR]

Any of these scenarios is better than working for a corporate entity or DSO in my humble opinion. I have no idea why the ADA hasn't stepped up and worked to shut those places down; they're virtual dental **** shows.

When I was in private practice ... I agreed with your sentiment re: evil Corp practices. But your statement for the ADA to close the Corp practices down is laughable. It will never happen. Kind of like when Invisalign came out and GPs started doing a lot of cases that they probably should not have tried. I remember all the orthodontists were complaining to the AAO (American Assoc of Orthodontists) to shut down Align Tech. Inc. Corp America is here. Think about how many mom and pop small business' that Amazon has put out of business. Look at medicine. Most offices are Corp owned. There are Urgent Care facilities popping up in Walmarts, CVS, etc.