It’s the dream of many dentists, whether as a new grad or after gaining experience – building and owning your brand-new dental practice. And why not? Being the only one to make all the decisions allows you to put your personal mark on the practice. The benefits of opening your own practice are significant but so are the risks involved. We have seen and heard from many dentists who go through the process and fall prey to all kinds of pitfalls before they were ready.
Not taking the time to understand all the stages and timelines involved in opening a new dental practice could result in potentially sinking your business before it even takes off. This blog will touch on some of the tasks involved in starting a new dental practice and give you an idea of how you can begin organizing yourself before getting started.
Before you start
There are many steps in between planning and starting your new practice. And the best way to ensure your dream of opening your practice doesn’t turn into a nightmare is to have a solid plan. And that starts with a clear vision. There are many exciting things to think about when opening your own dental office. But it’s easy to get lost in the small details, like the brand of equipment you’ll buy or the colour scheme of your operatories. So, before you start, make sure you are clear on what you are trying to build by asking yourself some key questions:
- What type of dental practice do you want to open?
- Who do you want to serve?
- What type of services do you want to offer?
- Does running a business excite you as much as practising dentistry?
Being clear from the start will make all the decisions that go into the planning process easier. From the way you set up your practice to the services you offer and even the location you choose, consider this an investment in your future. Getting started is about more than just opening a dental practice; it’s about building a business that allows you to achieve your professional goals.
Now that you are confident in what you are trying to build, it’s time to familiarize yourself with the major phases and corresponding timelines involved in opening your new dental practice.
Financing – The Big Picture
When you are considering opening your own dental practice, you are probably wondering how you will pay for it. Before taking any steps toward committing to purchasing or leasing a location, make sure you know what your budget will be and whether you’ll be able to secure appropriate financing. Few people get into dentistry with the idea that they will pay for a new practice all out of pocket.
So, you want to speak to a professional about how best to finance your practice early. A financial advisor can help you map out a plan that takes into account all your financial goals:
- Do you want to retire early?
- Are you looking for a particular lifestyle?
- Do you want to accumulate wealth for future generations?
- Are you looking for financial partners?
The answers to these questions will help determine the size and location you want for your new practice. And they will help to clarify what financial options you have available to you.
Often, part of your financing options will include a bank loan. Speaking to a banker early to help you get an idea of what sort of expenses you’ll reasonably be able to commit to without using your personal funds. Although securing a bank loan seems like a simple enough step, there are many things to consider. For instance, you may need to provide a detailed business plan so the bank can get you access to the capital you need. Check out our blog about securing a bank loan for more tips on preparing yourself for this part of the process. Also, the length of this process often surprises people. Therefore, you want to clarify these timelines before committing financially to any construction, lease or equipment purchases.
Location – To Buy or Lease
Now that you know what you want, what you can afford, and how you will get your budget together, it’s time to focus on the location. Again, you will want to use the vision of your ideal practice that you created at the start to guide your choices here. And once you’ve identified your desired area, you’ll need to decide whether to purchase or lease the location for your dental office.
If you own your dental office, either the building or property it’s located on, you will have much more flexibility, and long-term planning can be more straightforward. For example, no landlord approval will be necessary before moving ahead with construction, putting insurance in place, or making additional changes to leasehold improvements or fixtures in the future. Or you can purchase a unit in an existing building, which comes with a few more restrictions, but still less than a lease.
Whichever you choose to purchase, your timeline will be based on the closing date of the transaction. Of course, you can make plans to start construction after the closing date, but keep in mind that purchases don’t always close on schedule. Even though the seller has agreed to provide vacant possession on the closing date, unforeseen events can cause delays. Therefore, when planning for construction, it is wise to add in a bit of a buffer period and find out whether a delay in the start date can be accommodated.
If you lease your location, the final paperwork will likely need to be in order (i.e. finalized and signed by all parties) before you can take possession and start your construction. Lease negotiations are much more complicated than you’d imagine. They can take several months, progressing from initial discussions of general terms to an offer to lease (which may go through several versions), and then to the final lease (again, negotiated through multiple versions). Once the lease negotiations have become somewhat secured, you can begin putting timelines to your construction plans. Similarly, you will want to balance an early start so that no time is wasted with the ability to accommodate delays.
Construction – Creating Your Dream Practice
Whether starting from scratch or renovating an existing office, any plans to open your new dental practice will include construction. And even under the best circumstances, construction often comes with delays and setbacks. In addition, when building a new dental office, specialized construction, equipment and timing requirements can make scheduling even more complicated.
Your first priority is to have a building permit in place so construction can start as early as possible. Unfortunately, many municipalities face delays when approving building permits, so you’ll need to decide when to submit your plans for approval. You can choose to submit them before all other details are in place, which could speed up the construction stage. Or you may decide to wait until everything else is solidified to avoid having to submit amendments. Either decision will require you to assess your current circumstances to determine your risk tolerance and the most efficient use of time.
Since construction timelines may heavily depend on unpredictable factors outside of your control, you may want to postpone scheduling start dates until most other details are in place. Unfortunately, this could risk your preferred contractors not being available at a convenient time. On the other hand, scheduling construction too far in advance risks further necessary details not being in place before construction begins. This phase may be the most important when it comes to timeline management, so make sure you review your plan and schedule regularly and keep communications open with your vendors.
Staffing – Employment Contracts & Regulations
Once your location is secured, and your construction is underway, your staffing plan should be next up. You will need to decide which roles you need to fill before you open and which you can hire as you grow. Even if the vision you set for your practice was a small practice with no other dentists, you will still need help. Remember, you are not only opening a place for you to practise dentistry; you are opening a new business. And running your own business comes with a lot of areas to manage. For example, you may consider getting an Office Manager to help with scheduling and payments. Or you could hire a part-time bookkeeper to help you manage your cash flow and finances. Big or small, running your own dental office takes more than one person.
Often new business owners will have friends or family members help out in various office roles. Or will bring in a colleague from school to assist with patients. Unfortunately, these casual roles or prior relationships lead to skipping employment contracts, which can be very harmful to your business in the long run. Whether you think you are close enough to do without or trying to curb your start-up costs, don’t make this mistake. Employment contracts should always be part of your staffing plan. You need to plan on getting contracts in place from the outset. Whether it’s future disputes, accommodations, or the eventual sale of your practice, employee contracts can save you considerable money and troubles in the future.
As you can see, opening up a brand-new dental practice is not for the faint of heart. It’s a significant endeavour that requires proper planning and care. There are many steps to set up an acceptable space, secure supplies, hire workers, and fulfill other legal requirements. And not everyone has the knowledge, resources, and expertise necessary to make this dream a reality.
But the good news is, you don’t need to take it all on alone. The best way to ensure success in all planning stages is to rely on the right people to help you. Consulting professionals that have experience in the dental industry will help you make the right decisions and keep things on track. With the proper industry expertise, legal and financial advisors can advise on whether or not to incorporate before you open and make sure your employees, contractors, and other expenses are handled efficiently and in line with all regulations. In addition, they can help you negotiate a purchase or lease agreement that sets up your practice for long-term stability. The right team behind you makes all the difference.
If you’re considering starting, buying, or staffing your new dental practice, you can contact us for a free consult. We can not only advise you on your plan and assist with any legal documents, but we can also connect you to the right people. Since 2010, we have learned the nuances of the industry and have created a powerful professional network. We can help you find the right people you need to consult to create and protect your new practice. Send us an email or call us at 416-443-9280 any time.