Should You Open Another Office?

March 20, 2014
Have you been thinking about the possibility of opening another dental office? Opening a second office is something that is fairly common for dentists.

By Michael Kesner, DDS

Have you been thinking about the possibility of opening another dental office? Opening a second office is something that is fairly common for dentists. Some dentists even choose to open several offices. Is opening another dental office right for you, or not? There are a few questions that you need to ask yourself.

First, why do you want another office? For most dentists, opening a second office is because their primary office is not busy enough. For instance, the primary office can only fill the schedule two to three days a week, so a second office is opened to fill another couple of days. This of course increases the total overhead. The question you need to ask yourself in this situation is, "Would it make more financial sense to put money into a consultant and marketing to increase the revenue in the original office?"

I find that most offices can increase their number of new patients with the right marketing. I also find that most dentists need help from consultants on running the business side of their practices. Putting money toward marketing and a practice consultant will cost far less than the overhead associated with an additional office.

Many times it is believed that the original office's production has maxed out, when it really has not. There is usually a capacity blockage that is keeping the practice from being a full-time office. This blockage can be in not enough treatment rooms, or staff, or efficiency, or hygienist. These blockages are much cheaper to fix than buying another office.

Some dentists want to start another office as part of their growth plan and/or exit strategy. Their original practice is busy and profitable, so the decision is made to open another office with an associate dentist and create another revenue source. This type of scenario can work well if the dentist has already figured out how to be successful, and is duplicating that success. Dentists who go this route are usually more entrepreneurial. This is the route that I chose to go in 2010. I now have nine offices with a tenth under construction.

Managing several offices is, of course, much more difficult than managing two or three offices. You must have solid operating systems in place. When you are working in a practice every day and something "falls through the cracks," or an employee does not do something the way you want it done, then you are right there to notice the problem and correct it. With multiple offices, you are not always there to make sure things are done the way you want. So you must have monitoring systems in place to assure that your operating systems are followed. This means hiring people with the specific responsibilities of training, managing, and monitoring.

When you start new offices, you must realize that these offices are going to be a copy of the original. Having strong systems and controls over those systems will make sure that the new offices are not a poor copy of the first. It is like making a Xerox copy, of a copy, of a copy, etc. Each new copy looks a little less like the original. Financially, this means that each copy is less profitable. Good operating and monitoring systems prevent this from happening. This is one of the main reasons for hiring a good consultant. They can help you set up good solid systems to make things run smoothly, profitably, and with less stress.

What is your first step if you want to start another office? The first step is to make sure the original office is "firing on all cylinders." Once the original is running right and is profitable, then you are ready to make a copy and start another office.

Opening a second office, or making the decision to open several offices, can be a wonderful way to increase your income and also have a great exit strategy. It can also be a nightmare if not done properly. Make the investment to get help from someone who has "been there and done that." You will be glad you did.

Dr. Mike Kesner's practice ranks on the Inc. 5000 list as one of the fastest growing companies in America. He is author of the book "Multi-Million Dollar Dental Practice" and CEO of Quantum Leap Success in Dentistry. They teach more production, higher profits, and less stress. Contact him at [email protected].

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