Whether you are starting from scratch or simply upgrading your current situation, you must approach business as business.
by Drs. Matt & Ann Bynum
Before you decide to "build your practice so they will come," a few things must be addressed.
First, investigate into existing opportunities in your chosen area of practice. How many dentists are currently practicing in the immediate and surrounding areas? How many of those dentists are specialists? What is the economic climate of the community? What is the predominant industry or source of income in the community? Is that source stable?
The second item to address is what drives your practice forward. Are insurance influence and capitation going to be factors? Will you market your practice and skills? What types of patients do you want to see? What exactly do you want out of your practice? How far are you willing to go to get it?
The investigative phase of practice location is comparable to interviewing before hiring. The opportunities that exist for a dental practice are limitless. However, you must know the limitations of the area as well as its strong points, so that your philosophy and vision can grow exponentially around them. Once you find an appealing location, you must research all of the opportunities available. A good place to start is with traffic counts. You can obtain these numbers and surrounding community growth statistics from the realtor selling the property or from the city itself. Does the location see much traffic? Is the location highly visible when driving by, or is it a destination point?
Next, determine if this is a good location for a dental practice. Is the area saturated with other dentists? A very simple, yet helpful method to determine saturation is to obtain a detailed map of the city or area you are considering and use colored stickers or pins to mark the locations of other practices, using one color for general dentists and another for specialists. On the same map, highlight in color the areas of commercial and suburban growth and main travel arteries. This serves as the foundation for your research.
Next, make a decision as to the future profitability of leasing space, buying an existing office, or building from scratch. Where is the financial outlay going to be greater in the long run? Is the return on investment worth the initial cost of upgrading? Are monthly payments going to be comparable? How will you arrange financing?
Whether you are starting from scratch or simply upgrading your current situation, you must approach business as business. Make sure profit-and-loss ratios are reasonable for your situation.
When we began the investigative phase, we considered all three possibilities: leasing, buying, and building. Leases varied from $12 to $25 per square foot, with an average of $18.50. For just one of us to practice in a 2,250-square-foot office space at $18.50 per square foot, we would pay about $3,500 per month in rent alone. This figure did not take into account leasehold improvements or supply and equipment expenses.
Option Two was to buy in/out. We learned a long time ago that when you purchase an existing practice, many times you inherit the three Ps: practice, patients, and problems. In our case, the three Ps — combined with the initial cost — left this option with a lot to be desired. You should investigate this avenue of purchase very carefully.
Option Three — the one we chose — was to build from scratch.
Next month, we will continue our journey to the beginning of the practice of our dreams.
Drs. Matt and Ann Bynum have an insurance-free family dental practice in a suburb of Greenville, S.C. Through speaking, writing, and practice consulting, they have helped hundreds of dentists to free themselves of dental insurance and provide an atmosphere where practice and personal dreams become reality. Ann is a member of the ADA, ASDC, and the AAPD. Matt is a member of the ADA, AGD, AACD, and is a clinical instructor at The Las Vegas Institute for Advanced Dental Studies. They can be reached by phone at (864) 297-5585 or by email at [email protected] and [email protected].
