You’ve done it! Or you’re almost there! That coveted (and expensive) certificate recognizing your place in and welcoming you to the world of dentistry is now or is almost in hand. For some new and recently admitted dentists, practice ownership may be the clear way to go: right from the start, you knew you wanted to be the boss and own your practice. But for many others, the preference is to gain a bit of experience, learn the ropes and enjoy for a while the benefit of a steady paycheck before moving into the practice ownership phase of your career.
The choice depends on your goals and circumstances. If Associateship is the path you decide to take and if you know you want to own your own practice someday, there are some things to consider along the way.
Goals. The best-laid plans of mice and men often go askew. We all know this to be true. So any goals and plans we make must be done with the understanding that circumstances can change. But identifying your goals and developing strategies for accomplishing those goals can help keep us on track and lessen the chance that our goals will change for reasons other than our own choices.
Financial Plan. Associate dentists can earn a nice living. While you’re enjoying the fruits of your labor, make sure you keep your eyes on the prize. Make a financial plan that will provide you the net worth and borrowing power necessary to secure your practice purchase financing. And while banks tend to give good loan terms to dentists, the better position you’re in, the better terms you should be able to get. Having a discussion or two with a business banker, particularly one who works in the dental field, can be very helpful.
Time Frame. Do you see yourself owning a practice in 1 year? 2 years? 5 years? The intended time frame will govern and control your goals and financial planning. Identifying milestones along this time frame may also help. Are you married or planning to marry soon? Children may soon follow. Major life events like these have a huge impact on planned time frames and financial planning needs.
Location. The town or city in which you do your associateship may not be the place where you end up. You do, however, stand to spend a good chunk of time there, so roots may be planted. You’ll also likely develop some goodwill in that area, with goodwill being that abstract concept comprised of your reputation in the industry, patient relationships, and other factors. So you may want to buy a practice in that general area. Or you can look elsewhere. Identifying key factors about your preferred or target market can help whittle down the choices. Business factors include things like: the number and types of dental practices in those markets; if you specialize, the number of similar specialists; patient demographics; etc. Personal factors will be important as well. Maybe a beachside practice is right for you.
Trusted Resources. Assembling the right team is a concept we espouse on a routine basis. Finding a CPA, attorney and other key resources whom you can rely on will help you more than you will be able to appreciate this early in your career. As for when to make these connections, it can vary depending on your circumstances. But remember that the CPA that does your personal tax returns or the attorney that handled your traffic tickets, while potentially very competent and skilled at what they do, may not be the right fit to help you transition into practice ownership. Look for professionals with the right expertise, skillset, and philosophy to help you in this incredibly important stage in your life. You may also want to reach out to a dental practice broker to help connect you with potential practices to purchase.
NC Planning can assist you with all of the decisions listed above.