The first question that may come to mind when considering a start-up is cost. Initiating a start-up requires significant planning and an understanding of your personal financial needs and reserves.
Bank of America found that, in 2015, a dental start-up can cost anywhere from $250,000 to $500,000 with an average costs of just under $400,0001. Add this to the student debt most dental students have after graduation and this can be a significant amount of debt.
Building: Do you want to build a brand new building or do you prefer to find an existing location to create a dental practice space?
Equipment and technology: Is it important to you to be on the cutting edge? Established practices can sometimes come with technology that needs to be refreshed.
Demand vs. supply: Is there in an opportunity in a high-demand area with a low concentration of practices?
What are your financial reserves or other income sources: Establishing a patient base does take time. If we assume a strong new patient flow of 35 patients per month and a retention rate of 85%, building up to an active patient base of 2,000 patients could take up to 5.5 years. It is important to ensure you have adequate financing and capital to support you and the practice in the early years.
Differentiation: Do you offer a special skill, like being bilingual, the ability to sedate, etc., that doesn’t currently exist in the market? If so, starting a practice may be right for you.
Regardless of your decision of how you own – whether through starting up a new practice or buying an established practice – it’s important that you understand your personal goals, your own personality and perform the financial and operational diligence necessary to reduce the potential risks of ownership. Surrounding yourself with the right team of professionals is critical in the potentially complex but extremely rewarding career of dentistry.
1Dental Practice Start-Up: Top-10 Tips For Success by John Fiore, Bank of America Practice Solutions