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Discussion in 'Dental' started by PhatDoc, May 7, 2008.
What are your TOP 10 things to know when starting a new practice?
PROS and CONS would be great.
In no particular order
- location, location,location
- Average age/number of current practicing dentists in that area
- Average age/population trend of the area you're considering
- Reasonable cash flow analysis of a potential practice
- Availability of competent potential staff
- Average cost per sq. ft. of office space
- The names of the resp for the major dental suppliers in that area (i.e. Patterson/Sullivan Schein)
- Type/number of specialists in that area
- Your views of what you want your practice to be
- How to write an office manual/office policies for every employee before their date of hire
- Accounting firm/lawyers to use for the practice
Fantastic list. I agree completely.
In that list I would emphasize location. Look for an area of growth and get there early.
Interview the dental supplier, and KNOW that they will be with you during the entire process. Now isn't the time to go completely cheap! You need their advice and expertise to get everything set up. Don't start shopping for the little things on the internet and cut them out. You will greatly appreciate their loyalty during the process if you are loyal to them. As your business grows, you can make other decisions, but you'll probably stay loyal.
Plan for growth, but start small. Meaning: get just enough equipment to get rolling, but have the rooms already finished out to grow into later. I think you need to start with 2 fully equipped ops. That covers a lot of ground.
WORK HARD and be DEDICATED to your new business. Now isn't the time to go get that BMW that you think you deserve. It will come in time. I don't like the idea of being a part time associate and a practice builder at the same time. You may have to do this just to cover personal expenses, but you should dedicate as much time as you can to your business. Even if that means sitting in silence at the new office. You can enjoy the new office smell, but a new patient may just call or walk in. You can see them immediately, but you can't do that if you're off making money for someone else as an associate.
I started a scratch practice 9 years ago, and it has been a lot of work, but I wouldn't have it any other way. I have friends that bought into practices, only to buy a lot of headaches and overhead that was out of control.
Do you have an external company do your payroll, did you hire a office manager to start off with who performs this task, or do you do this yourself?
I would add scouting out the local dental labs and personally dropping by to start a face to face relationship.
My lab guy saved my butt a number of times the first year in private practice.
Couple of things I would like to throw in that successful dentists recommended.
1. Reading business books to help you understand how to manage your practice and staff, and ultimately market and deliver dentistry to your community would be a great tool. Many millionaire dentists are business savvy, and we all know dental school doesn't teach us how to be a great business inviduals. There are many titles out there that are not specific to dentistry, but they do a good job in giving you ideas on how to start small business, many of those ideas touch what Dr.Jeff already said.
2. Good CE courses are great way to enhanc your dentistry and also learn from other dentists and their ways of practicing dentistry. The more CE courses you take, the more cases you can accept (some people may not like me saying this - but endo and ortho CE courses can get you start accepting cases, you may afterall not refer every patient who needs endo or ortho to the local specials. Many dentists do this). There are many non-clinical CE courses too; on business, how to get around taxes, how to shop for good supplier and lab, etc.
1. Find location
2. Negotiate/sign lease with your attorney
3. Get price from numerous construction general contractors. Better yet, find the subcontractors because they're the ones who work for the general contractor at half the price. Usually a Brazilian, Spanish, Irish, Asian contractors will have the best prices.
3. Obtain construction/business loan quotes from different dental supply companies. The rates are different and the payment terms are different so it saves to shop around.
4. Call Schein, Benco, Patterson, Pearson, Darby with your equipment list to get the best price delivered and installed. You'll learn quickly that you'll be massively overcharged for everything simply because you're a dentist so it's worth it to shop around.
When I built my practice in 2000, Schein charged me $1000 for a small stainless steel sink cabinet, the exact same one that you can get at home Home Depot for $30! I cancelled all the dental cabinets and have my builder installed sinks and shelves from Home Depot as part of the construction cost. It looked the same and worked the same and saved $30K.
Last year Patterson offered me their Eaglesoft for "free" if I pay $3600 for training and technical support. I searched and found Perfectbyte for $69 on ebay, which I taught my frontdesk to use in 10 minute and works flawlessly. My other software, TDOCS, was bought eight years ago for $995 and is still working today without any upgrade/support whatsoever since.
I just ordered only 2 Liters of dental compressor oil (jun-air js27) and was billed $485! I called Schein to tell them it must be a price mistake but they said no so I returned them. I found it for $60 from a non-dental vendor.
Assuming you are plumbing for 3 chairs and starting out with 2 chairs keep this list handy and keep your cost to $100,000:
Dental software $1000
NiTi Insts $3000
Apex Locator $300
Curing Light $1500
Intraoral Camera $100
Skip all other nonessentials and upgrade very slowly as need arrives. The patient that appreciates cerec, digital xray, air abrasion, laser, wand, nitrous oxide, anesthetic warmer are very far and few in between you don't need to go deeper in debt for them.
5. Cheapest dental supplies: Safco Dental, Best Buy Dental.
6. Search around for a cpa/bookeeper; should be no more than $100/month.
7. Sign up with paycycle for payroll processing; $24.99/month. You get two free months trial.
8. West coast labs have better price for the same quality with faster turnaround time than east coast labs.
9. Don't accept DMO.
10. Read "The Millionaire Next Door"
I read posts about starting from scatch and buy in options for years, it's always 50%-50%. There has never been a definitive answer. The general trend is that if you're not a good business person, it's better for you to buy a practice.
For those in here that started fresh out of d-school. Did you feel like you were ready in terms of hand-skills and business experience?
Thanks for the replies! Lots of great info in the replies.
I should also add perseverance to every thing mentioned here as well.
Very hard to find dedicated and competent staff with whom you will get along.This is one of the most important things many of us will over look.
If you find one, hold on to them, very hard to find good staff.
What type of insurance would you recommend us to buy ? Disability and business overhead insurance and what else ?
You need worker's comp, professional liability, business liability, term life, regular medical insurance. Don't even think about whole life, annuity, disability, business overhead, umbrella at this point. You need the free cash for other more urgent needs now.
You're the first person I've heard say this. Isn't insuring your insurability a priority?
to chime in here... if you have any sort of family, it is flat irresponsible to be without life insurance and disability. especially if you are carrying loans. just because you shuffle off this mortal coil, doesnt mean that your debts follow you.
Which insurance would you recommend paying with your personal account or corporate account ?
I think if you buy it out of your personal account and you become disabled then, the money is taxfree. If you're using corporate account then you're taxed on the money.
I personally think disability and office overhead insurance is too expensive so it's the least of my concern at this point. If someone is to be disabled at this starting point in their career already drowning in debts, do you think they'd be concern about cashflow and paying all bills? Maybe a couple years down the road when you have something to protect but that's just my opinion and my bias.
I disagree. I think I would be more worried about disability early in my career when I don't have any type of nest-egg built up and student loans to repay. Someone who has practiced for 25 years and gets disabled should have paid off their loans and have some retirement accrued by that point. I graduated this past week and if I were to be disabled in the next year or two, it would be devastating financially with loans to repay and no savings.
Agree 100%. For new grads, the cost of disability insurance is worth it, even if it's only for that 0.1% chance you might need it. If you have any type of significant loans and a spouse/family whose income CAN'T cover them if you couldn't work, it's worth it. While most of the time you'll never need it, it does happen(as I was reminded this week when the alumni association from the UCONN Healthcenter sent out a letter to all the medical and dental students from my graduating year letting us know that one of the medical school grads from my year pass away a few weeks ago from a brain tumor, he was in his late 30's and a practicing cardiologist in CT).
If you've been in practice for a while chances are that you've amassed decent number in your practice's accounts receivable column that tends to provide a steady source of future income for atleast a few months if you became disabled and were unable to practice for a few months, and if you became permanently disabled, well then hopefully if you didn't have disability insurance, you'd have enough saved away in retirement funds and be able to sell your practice to cover your household expenses.
As Daurang correctly noted, if you do get disability insurance, PAY FOR IT OUT OF PERSONEL NOT BUSINESS FUNDS, this way if ever you do need to collect on it, you've already paid the taxes on it and you'll collect the full dollar amount each month. Also, make sure that if you do get it that it's explicity stated in the policy that it will kick in X number of months after it's been determined by YOUR doctors that you are unable to clinically practice dentistry.
You'd be suprised at how many policies can be voided if after disability determination by the insurance companies doctors that you're able to work at some other completely unrelated to dentistry job.
Personally, both my partner and myself cary disbility insurance. For us, its just a mental comfort that we choose to have.
If you're in school the ADA provides a very good policy. It pays $2,000 per month for 24 mos, should you become disabled and cannot continue as a student, the best part though, is that its guaranteed convertible to a regular policy when you graduate. It costs around $75 a year as a student.
So if one were to become mentally disabled and flunk out of dental school, do they receive the $2000/month benefit?