Dental and Medical Counsel Blog

5 Common Myths About Buying a Dental Practice

Written by Ali Oromchian, Esq. | Dec 11, 2024 5:00:00 PM

Buying a dental practice is one of the most significant decisions in a dentist's career, yet misconceptions hold many back. These myths can discourage capable professionals from pursuing ownership despite its long-term benefits. At Dental & Medical Counsel, we believe in empowering dentists with accurate information and expert guidance to achieve their goals. 

Let’s debunk the top five myths preventing you from taking this rewarding step. Learn more about some of the most common myths about buying a dental practice below. Then, contact us for help purchasing your first dental practice.

Myth 1: Buying a Practice Is Too Expensive

Many aspiring practice owners believe they can’t afford to buy a dental practice, but this is often untrue. While the upfront costs may seem daunting, most dental practices generate substantial cash flow, which can offset the investment. Financing options are abundant, with lenders often eager to support dental professionals due to the industry’s stability. Instead of focusing on cost, consider the return on investment you’ll gain over time.

Breaking down the numbers can also help alleviate concerns. Monthly loan payments often rival or are lower than the overhead of renting a space and starting from scratch. Plus, unlike working as an associate, owning a practice gives you control over your financial future. Proper planning and the right team make purchasing a practice affordable and profitable.

Myth 2: You Need Decades of Experience to Succeed

It’s common to assume you need decades of experience before buying a practice, but that’s a misconception. Many successful practice owners leap within the first few years of their careers. Leadership skills and business acumen can be learned, and mentors, consultants, and advisors can support you.

Ownership accelerates professional growth, offering opportunities to hone management skills, build patient loyalty, and gain financial independence. You don’t need to have all the answers from the start—what matters is a willingness to learn and adapt. With the right resources, even early-career dentists can excel as practice owners.

Myth 3: Starting a Practice from Scratch Is Easier

Some dentists believe starting a practice from scratch is simpler than buying an existing one. However, building a patient base, hiring staff, and establishing operations from the ground up is far more challenging. It can take years to achieve the profitability an established practice offers from day one.

By purchasing an existing practice, you acquire a ready-made foundation, including patients, staff, and operational systems. This allows you to focus on growth and patient care rather than starting from zero. In most cases, the financial and professional advantages of buying outweigh the perceived simplicity of starting fresh.

Myth 4: The Current Owner’s Patients Won’t Stay

A common worry is that patients will leave once the ownership changes, but studies show that most patients remain loyal. Patients prioritize continuity of care and often view a new dentist as a fresh opportunity. By ensuring a smooth transition, you can retain the majority of the practice’s patient base.

Building trust with patients begins with transparent communication. Introduce yourself early, emphasize your commitment to high-quality care, and ensure a seamless transition. With the right approach, you can retain patients and attract new ones.

Myth 5: It’s Impossible to Find Financing

Practice financing is often easier to secure than many dentists realize. Banks and lenders are generally confident in the dental industry’s profitability and stability, making them willing to offer favorable loan terms. With a solid business plan and realistic financial projections, obtaining a loan is achievable for most buyers.

Working with experienced advisors can also help you identify the best financing options. From traditional bank loans to Small Business Administration (SBA) loans, there are multiple avenues to explore. The key is to present a strong case for your ability to succeed as a practice owner.

The Benefits of Owning a Dental Practice

Dental practice ownership offers unparalleled advantages. A few key benefits to keep in mind include:

  • Financial Independence: Ownership provides a direct path to building wealth. Instead of earning a fixed salary, you benefit from the practice’s profits and the growing equity of the business.
  • Control Over Your Career: As the owner, you make decisions about patient care, office culture, and operational priorities. This autonomy allows you to shape your practice to align with your vision and values.
  • Established Patient Base: When you buy an existing practice, you acquire a built-in patient base that generates immediate revenue. This eliminates the need to spend years building a clientele from the ground up. Patient retention is key.
  • Tax Benefits: Practice owners can take advantage of various tax deductions, such as equipment purchases, office improvements, and staff salaries. These deductions can significantly lower your taxable income, adding to the financial benefits of ownership.
  • Professional Growth: Managing your practice helps you develop leadership and business management skills. These experiences not only enhance your career but also allow you to leave a lasting professional legacy.

These benefits make ownership a rewarding choice for dentists ready to invest in their futures.

How to Identify the Right Practice for You

Finding the right practice involves a clear strategy. A few key steps you need to follow include:

  1. Define Your Goals: Clarify what you want in terms of practice size, location, and patient demographics. Understanding your priorities will help you identify the ideal practice more efficiently.
  2. Set a Budget: Determine how much you can afford and explore your financing options. Knowing your financial parameters will prevent you from considering practices beyond your reach.
  3. Research the Market: Study the practices available in your preferred location, considering competition and patient demand. This research will help you identify opportunities that align with your goals.
  4. Evaluate Practice Metrics: Review key data points such as annual revenue, patient numbers, and overhead costs. This information is crucial for assessing a practice's financial health and sustainability.
  5. Visit Practices: Schedule visits to potential practices to evaluate their physical layout, equipment, and overall atmosphere. Seeing the practice in person provides valuable insights that numbers alone cannot reveal.
  6. The Due Diligence Process: Work with financial and legal experts to thoroughly review the practice’s history, contracts, and compliance records. This step ensures no hidden liabilities or issues could jeopardize your investment.
  7. Trust Your Instincts: Beyond the numbers and data, consider how you feel about the practice during your interactions with staff and patients. If a practice aligns with your professional goals and gut feelings, it’s likely a good fit.

Following these steps will increase your chances of finding a practice that meets your needs and sets you up for success.

Overcoming Fear: Your Path to Practice Ownership

Fear is a natural part of making a major decision, like buying a practice. However, letting fear dictate your choices can hold you back from opportunities. Education and preparation are the antidotes to fear. Seek guidance from trusted advisors, take small actionable steps, and remind yourself of your goals. With the right support system, you can overcome uncertainty and take control of your career.

Contact Dental & Medical Counsel for Help Finding the Right Dental Practice for You

At Dental & Medical Counsel, we specialize in helping dentists navigate the complexities of practice ownership. Our experienced team is here to guide you through every step, from evaluating practices to finalizing the deal. Don’t let myths or uncertainty hold you back from achieving your dreams. Contact us today to start your journey toward ownership of your dental practice.

 

 

Frequently Asked Questions

Q: Is buying a dental practice too expensive?
A: While the upfront costs can seem high, most dental practices generate significant cash flow to offset the investment. Financing options are readily available, and monthly loan payments are often comparable to or less than the cost of starting a practice from scratch. With proper planning, buying a practice is both affordable and profitable.

Q: Do I need decades of experience to succeed as a practice owner?
A: No, you don’t need decades of experience. Many successful owners begin within a few years of graduating. Ownership offers opportunities for professional and financial growth, and with the right resources and support, even early-career dentists can excel.

Q: Is starting a practice from scratch easier than buying one?
A: No, starting from scratch is often more challenging. Buying an established practice provides immediate access to patients, staff, and operational systems, saving years of effort in building a new practice and achieving profitability.

Q: Will the current owner’s patients leave after I buy the practice?
A: Most patients remain loyal during an ownership transition, especially with clear communication and a smooth handover. Introducing yourself and demonstrating your commitment to high-quality care helps build trust and retain the patient base.

Q: Is it difficult to find financing for buying a dental practice?
A: Practice financing is often easier than expected. Banks and lenders are confident in the dental industry’s stability, offering favorable loan terms to qualified buyers. With a solid business plan and professional guidance, obtaining financing is achievable for most dentists.

Q: What are the benefits of owning a dental practice?
A: Ownership provides financial independence, career control, access to an established patient base, tax benefits, and opportunities for professional growth. These advantages make ownership a rewarding career step.

Q: How can I identify the right practice to buy?
A: Start by defining your goals, setting a budget, and researching the market. Evaluate practices based on financial metrics, visit locations in person, and conduct due diligence with legal and financial experts. Trust your instincts when making the final decision.

Q: What if I’m afraid of taking the leap into ownership?
A: Fear is natural but can be overcome with education, preparation, and support. Seek advice from trusted advisors, take small actionable steps, and focus on your goals to gain confidence in your decision.

Q: How can Dental & Medical Counsel help with buying a practice?
A: We specialize in guiding dentists through the complexities of practice ownership. From evaluating potential practices to finalizing deals, our team offers expert advice and support to help you achieve your goals. Contact us to get started!

 

About the Author

At Dental & Medical Counsel, we've been instrumental in realizing the practice goals of countless dentists. Whether you're looking to purchase, launch, or sell a dental practice, our expertise is your guide. Beyond the initial stages, we're committed to ensuring your dental practice remains legally compliant.

We provide comprehensive support, including employment law protections, dental contract reviews, and assistance with dental employment agreements. Additionally, we specialize in incorporating dental practices and securing trademarks. And for long-term planning, our services extend to helping dentists with succession and estate planning. Trust us to be your partner in every step of your dental practice journey.

About Ali Oromchian, Esq.

Your Dental Lawyer

Ali Oromchian, JD, LL.M. is the founding attorney of the Dental & Medical Counsel, PC law firm and is renowned for his expertise in legal matters

Ali Oromchian, JD, LL.M., is a leading legal authority in dental law and the founding attorney of Dental & Medical Counsel, PC, with over two decades of experience. His deep connection to dentistry comes from his wife's nearly two-decade-long career as a pediatric dentist. 

This personal insight fuels his dedication to empowering dentists to navigate their legal challenges and achieve their practice goals. In doing so, Ali has helped thousands of doctors open their practices while maintaining legal compliance. 

Ali is frequently quoted and contributes articles to dental publications, including the California Dental Society, Progressive Dentist, Progressive Orthodontists, Dentistry Today, Dentaltown, and The New Dentist magazines, further showcasing his commitment to the dental community.