Does it make sense to buy an existing practice or begin a new start-up?
Many dentists feel that the only way to have their own practice is to purchase one. However, some practitioners are successfully placing new start-up practices in leased commercial retail space and generating first year gross collections comparable to and in some cases exceeding the production of many established practices.
Whether you start a new practice or purchase a practice, LOCATION of the practice is vitally important. Typical new start up practices average $250K- $300K in first year collections while those located in superior LOCATIONS regularly generate $500K- $1M.+ in their first year. The problem is that every practitioner who starts a new practice thinks that they have found the "needle in the haystack" LOCATION. But the process of finding a truly great LOCATION requires the services of a dental realty expert. Likewise, the growth potential of an existing practice is maximized with a good LOCATION.
What are the advantages of starting a new practice?
- No debt on practice purchase
- Modern equipment
- Modern efficient space plan
- Paperless, digital
- Opportunity exists to select a great LOCATION
- Net income in superior LOCATIONS can exceed that of established local practices
- More growth potential with ideal LOCATION
- Choose your own staff
What advantages favor purchase of a practice?
- Instant cash flow from existing patients
- Existing staff in place which is familiar with patients
- Existing building
- Existing equipment
- Established accounts with vendors and service providers
- Can be accomplished in 90 days or less
- Net income can exceed that of startup practices with average LOCATIONS
Why trust Practice Endeavors to assist you?
Bob Brooks, owner and founder of Practice Endeavors is a licensed commercial real estate agent who serves only dentists. These services are provided through Prudential Plus Realty. Bob has worked with real estate for 30 years and has specialized in serving dentists since 2003. Nearly every dentist knows a real estate agent but 90% of all agents are residential agents. Of the remaining 10% there are very few who primarily represent tenants and buyers of dental office space. You can benefit by using a knowledgeable, experienced dental realty specialist from Practice Endeavors to represent your best interests.
LOCATION, LOCATION …
Where is the best place to LOCATE your practice? Clinical skills and practice management skills have a huge bearing on practice success. But while your skills and speed can improve and you can always release staff members who do not work out, your LOCATION is one thing that you most likely will be stuck with for a long time. The difference between an average LOCATION and a phenomenal LOCATION can amount to as much as $1 Million to $2 Million in net income over the first 10 years. How can Practice Endeavors benefit you in finding a superior LOCATION?
What is the most important factor in deciding to relocate an office for a professional practice?
When you identify the most limiting factors in the success of your business, ask yourself if a change would improve profitability, patient retention, new patient or new client growth, office efficiency, and better service to patients or clients. Will it improve your ability to expand the practice later, to build equity through ownership, to reduce your tax liability, and to maintain a revenue stream through retirement with ownership?
In addition to the economic factors that affect your decision, intangible benefits of relocating your office may include improved staff morale and retention as well as your peace of mind, your positive attitude at work, and your overall quality of life.
A Practice Endeavors specialist can provide information that will help you determine which path will be most profitable. Comparing your current operating costs and projected income and expenses after relocating will give you a clear picture and help you make the right choice. Do not move forward and don't spend a penny until your consultant can prove to you how the project will benefit your practice.
If you are within 10 years of retirement, do not discount the potential benefits of moving into new facilities and updating your equipment. Do not resign yourself to an inadequate office for the rest of your career! Investing in a modern set-up will increase the value of your property as well increase the value of your patient base and make your last few years on the job much more enjoyable. Besides, why would a young professional want to buy a practice with 20 year old equipment in an obsolete office when they can go down the street and lease newly remodeled space with new equipment for less money in a new start-up?