Credit and Liquidity Tips for Dental Practice Buyers
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Pros of Owning a Rural Dental Practice
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By David Haynes, MBA, Vice President of National Practice Sales
Graduation is an exciting time for dental students looking to start their professional careers. After finishing dental school, many dentists join private or corporate practices to gain experience working as associates. Some new dentists may want to jump right into practice ownership to enjoy its many benefits right away. This article will help you know if you’re ready to own a practice.
Buying a Practice
It is possible for new dentists to buy a practice shortly after graduating dental school, but they will need to be financially and clinically prepared. Prospective buyers typically require a loan to finance their practice purchase. Lenders will want to see you have good credit and liquidity.
You will also likely need to demonstrate your practice production history to secure financing. For this reason, many new dentists work for six months to a year before looking to purchase a practice. You will want to compile production reports to show your financial readiness for practice ownership. The experience gained working in another practice can help prepare you for the responsibilities of being both a practitioner and business owner.
If you are prepared to buy a practice shortly after graduating, choose your new business carefully to ensure the practice matches your skill set, personality, budget and growth plans.
Starting a Practice
Some dentists find the idea of starting a practice to be an exciting challenge, while others may entertain the idea of entrepreneurship after struggling to purchase an existing practice.
Practice startups can be tricky for new dentists, so you should assemble a team of experts to assist in the process. If you have a contractor who goes bankrupt or doesn’t perform well, your buildout may be significantly delayed or you may see significant cost increases. Consultants who specialize in dental startups can help reduce risk and stress throughout the process.
As a new dentist, buying or starting a practice can be great options for your career. For more tips on owning a practice, please check out the following video or contact me at david@menlotransitions.com.
