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.
Where is the best place to LOCATE a 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?
- Provide Practitioner to population ratios in 1,3 and 5 mile radii from every potential location evaluated.
- Provide Practitioner to local employee ratios for any given area. Consider where people work as well as where they live.
- Provide Practitioner to retail sales ratios for any given area. New start-up practices need to be in good retail locations.
- Evaluate area income levels to assist practitioner in matching services with needs of specific population groups.
- Evaluate median age in any given area to match services with needs of specific population groups.
- Where are competitors located?
- For specialists, where are referral sources located?.
- Practice Endeavors uses the best dental data base that exists. It is constantly updated and includes estimated production information by practice.
- 3,000 New Patients in Two Years
- What About Finding a Practice Location On My Own?
- We've Done Remarkably Well
- How I Found My Amazing Location
- Start-Up Challenges Video
- Identify all properties that meet each client's criteria.
- Score each prospective location for acceptability based on the location of competitors and population.
- Score each location based on real estate factors including visibility, accessibility, signage, parking, etc . . .
- Arrange visits to each client's preferred properties.
- Negotiate each deal, representing each client's best interest. Negotiate for lower rent, more tenant improvement money from landlord, etc. or for a lower purchase price.
Should I 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 . . .
For a professional who has a desire to own their own practice, does it make sense to buy an existing practice or begin a new start-up?
The answer depends on your goals and what kind of an environment that you want to work in. Many young professionals feel that the only way to have their own practice is to purchase one. However, some young professionals are successfully placing new start-up practices in leased commercial retail space and generating first year gross collections far in excess of what a typical professional practice might generate. In order for a young professional to be successful in a new start-up practice, they would need to have developed their skills and their speed since graduating as well as experience on the business side of operating a practice in a commercial retail environment.
For young professionals that do not have a strong entrepreneurial spirit or do not have a stomach for the risk of opening a practice without a patient base, purchasing a practice makes sense. However, with both a new start-up and purchase of an existing practice, it is absolutely essential to use the services of a Practice Endeavors specialist to avoid making a mistake that you will regret for the rest of your career.
Practice brokers represent professionals who want to sell their practice. They are usually not licensed real estate brokers. The selling professional is represented by the practice broker and it would benefit the buyer to have an experienced professional Practice Endeavors specialist represent his or her best interests. In Ohio, by law, if an individual is representing someone else in the sale, purchase or lease of real estate, which most practices do include, then that representative must be a licensed real estate agent. Make sure the specialist that you are dealing with is a licensed real estate agent.
Why not go it ALONE??
Excerpt from Doctor of Dentistry, Feb. 2007 (Featuring Bob Brooks, Practice Endeavors- Owner)
Let's face it; dentists are busy people. Not only are you caring for your patients, often you'e in charge of . . . .
Why not go it ALONE??
Excerpt from Doctor of Dentistry, Feb. 2007
Let's face it; dentists are busy people. Not only are you caring for your patients, often you're in charge of making critical business decisions for the livelihood of your practice. One of the biggest decisions is moving to a new location. More than likely, you will be locked into a new location for a long time and if you have made a poor decision, it can literally cost you millions. Besides profitability, your decision affects patient care, staff morale/retention and your own physical and mental health.
If you're like some dentist, you might consider going it alone. However, it takes a lot of time, energy and education to get the space that works best for you. You wouldn't go to a general physician to fix your teeth, so why try to take on the expertise of a commercial real estate agent who specializes in dental offices?
Why is the selection of your office space perhaps the single biggest decision that you will make in your professional career?
You can fire and hire any body on your support team including your attorney, accountant, real estate agent, etc. . . and replace them if you are not satisfied with their service to you. One thing you cannot change . . .
Why is the selection of my office space the single biggest decision that I may make in my professional career?
You can hire and fire anybody on your support team including your attorney, accountant, real estate agent, etc.. and replace them if you are not satisfied with their service to you. One thing that you cannot change quickly is the location of the new office space that you have just moved into. Both as a purchaser and as a tenant, you will very likely be locked into your new location for a significant period of time. With the cost of the professional build-out, you may not be able to afford to relocate anytime soon.
Your choice of a qualified and experienced Practice Endeavors specialist is critical to identifying the best location for your future office.
How much should it cost to have a dental realty specialist represent you?
If you are serious about moving forward with new office space for a dental practice ....
How much should it cost to receive professional assistance in buying, building, or leasing office space for a professional practice?
If you are serious about moving forward with new office space for a dental practice where you will buy, build, or lease, you should expect your agent's fee to be paid by the seller or the landlord at closing. Practice Endeavor’s clients in contract have never had the first penny of net cost for any deal that was ever done because their fee is paid by the other party. While the landlord or seller almost always has a licensed agent representing their best interests, you can have a licensed agent representing your best interest. And the other party pays the real estate brokerage commission!