Business side of dentistry: 7 steps for success in starting your own practice

After exploring the possibility of joining or buying an existing practice, many dentists come to the conclusion that they’d rather build their own from the ground up. Creating a dental startup can be an exciting venture – but one requiring a serious investment of time, talent and capital. Here are some things to keep in mind as you weigh the idea of launching a dental startup.

When building an all-new practice may be your best option

New dental practices open all the time, which suggests that many dentists prefer to start from scratch. You might agree if:

Launching your dental startup: 7 essential steps for success

If you’ve decided that building a new practice is the right way to go, you have lots of planning to do first. Here are the steps you will need to complete, with suggestions that can help you prepare for a profitable outcome.

1. Do a thorough demographic analysis. Although many new practices thrive in areas with unfavorable dentist-to-patient population ratios, it’s better to locate in an area with stronger potential for growth. Generally, you will need a ratio of at least 1:3000 to support your new practice. Launching in a highly competitive area, or one with a low or declining population, could make it much harder to build a healthy patient base. This demographic map is a great place to start.

2. Find a good location. Look for office space that is conveniently located for patients and dental team members, ideally one with dedicated parking. You will also want a location that is highly visible so residents (and people who work nearby) are instantly aware you’re open to new patients. Space near an intersection where thousands of cars pass daily can be great, but it can also be expensive, particularly in urban markets. Consider hiring a real estate professional to help you find viable spaces and negotiate the best price and terms.

3. Work on financial projections. What do you hope to earn in the first, second and third years of your practice? What rate of growth is needed to achieve healthy earnings and make your operating expenses, including loan payments? Running some basic projections will serve as a helpful reality check and prepare you to talk with potential lenders.

4. Line up funding. Many banks set a loan limit when considering lending money for dentistry startups, and almost all will require you to provide a capital investment. Newer dentists may have more difficulty with financing because they may lack established business credit or a clinical track record. If you’re launching a new practice early in your career, you may be eligible for a traditional loan from the U.S. Small Business Administration (SBA). Consider seeking out a financial mentor who works with startups to help you weigh all the options.

5. Build your practice while you’re still working. This might not work for everyone, but if you can continue on as an associate while you launch your new practice, you may experience less financial stress by having a steady income while you build your patient base.

6. Tap into your dentist network. Surrounding yourself with other dentists who’ve bought or built practices can be very helpful. Find them through your local dental society or via online groups like this one, The Making of a Dental Startup. On-demand seminars and networking events can put you in touch with other dentists who will share honest views, resource people they’ve worked with, and other practical tools and advice.

7. Harness the power of community. Who else do you know in the business community that can help you? Are you friends with a business coach, or have family members and friends with specialized skills (think branding, digital marketing, interior design, financial planning or human resources)? Add these talented people to your tribe. They can be wonderful sounding boards and guides as your dream of a new dental practice takes shape. You may even find money-saving opportunities through your professional network (like the substantial discounts on goods and services offered by ADA Member Advantage).

Launching a dental startup is a bold career move – one that appeals to many dentists. If you decide that purchasing or joining an existing practice makes more sense for you, the ADA’s Practice Transitions service is ready to help. This service matches you with dental practices that align with your treatment philosophy, career goals and lifestyle. You will enjoy customized resources and personal support from your ADA Advisor – helping you feel more confident every step of the way.