Most associate dentists prefer to purchase practices rather than start-up new practices. If you’ve done some research, you know that it is very difficult to find good practices to purchase in areas that you might prefer. While some practitioners who have not received satisfactory assistance in placing new start-ups have struggled, properly located new start-ups have performed well.

If you have an interest in owning a practice in a saturated market, your best bet is to purchase a practice. A saturated market would be where the population to practitioner ratio in a given area is 1,400:1 or less.

Practitioners who are flexible to practice outside metropolitan areas can do well with both practice purchases and properly located new practice start-ups.

The most important factor in practice success is the factor that is also most limiting. With practice acquisitions, the most limiting factors are often patient retention and subsequent cash flow. With new start-ups, the most common limiting factor is practice location.

Practitioners who have adopted a “go-it-alone” philosophy toward practice ownership often become frustrated in their attempts. And if they do move forward on their own, they may end up locked into really bad situations for a long time.

It is unsettling that national practice brokerages require buyers to sign paperwork requiring their brokerages to represent buyers as dual agents. Many people consider dual representation to be unethical. With real estate, poorly trained and inadequately supervised real estate agents representing out of state based brokerages may lead new start-ups practitioners in the wrong direction. Some CPAs, attorneys and dental supply company representatives try to do everything from acting as practice brokers to giving advice on new start-up locations.

Your best bet is to work with licensed and certified advisors who are specialists in what you need.

There are approximately 100 subjective factors that impact future cash flows of practices that are rarely taken into account in computations for practice valuations. Yea, that’s scary.

If practice valuations performed by credentialed professionals include an evaluation of all factors that impact future cash flow of practices once sold, then those valuations have credibility.

States require licensure of professionals serving the public to protect the public. No one wants the unlicensed practice of dentistry, right?

Most practice acquisitions include the lease or purchase of real estate. Practice Endeavors is the only practice brokerage in Ohio that is also a licensed real estate brokerage. In addition, Bob Brooks of Practice Endeavors is also the only credentialed Certified Exit Planning Advisor in Ohio (CEPA).

It’s amazing, but at the time of this posting, no other practice brokers in Ohio are credentialed in anything having to do with practice brokerage!

Patient mapping is a critical part of determining the future cash flows of practices being evaluated for purchase. Not only can patient proximity to practices be determined, but new marketing opportunities for new patients can be discovered. For new start-ups, mapping demographic populations, competitors and referral sources is an essential part of the evaluation process. Demographic reports for both practice acquisitions and new start-ups are valuable.

Every business says “trust us.” Dentistry is big business and companies that have been in it a long time have developed effective ways to strengthen business ties with dentists. Young dentists, especially new graduates, may unknowingly be taken advantage of in the future by overpaying for products or services.

Savvy dentists are now relying on companies with fair prices on equipment and supplies, and not relying on the major national dental equipment and supply companies. These national companies, along with local accountants and attorneys, prefer that their practitioner customers and clients do business in their own circles of influence in order to control dentists and not lose their business.

At Practice Endeavors, we don’t care who our clients do business with as long as they have a good outcome.

Compared to other businesses, it is easy for dentists to become qualified for financing for both practice acquisitions and new start-ups.

Funding depends on each individual deal. So don’t let another business broker lead you to believe that it is a complicated process that only they can handle. You can do it on your own!

At Practice Endeavors, we are happy to share the contact information of various lenders. It is easy to become qualified at no cost or obligation. Contact us and we will point you in the right direction.

If you have questions about purchasing a practice, starting-up a new practice, or finding an associate position, contact us and we will be happy to answer your questions at no cost or obligation.