Young dentists usually see practice ownership as the next phase of their career. This typically comes after they have been employed a few years as an associate following dental school. Some will be ready to learn how to buy a dental practice and transition over in a short period of time. Other young dentists may find this to be daunting, and they may feel overwhelmed with the added responsibilities. However, starting out in an office as an associate and then purchasing their own practice after a couple of years may be the perfect path to take for some dentists.
Mentorship of Senior Dentist: During the associate phase of a young dentist’s life, they will have the added benefits of working alongside the senior dentist on a daily basis. This is an excellent opportunity for them to learn how to buy a dental practice, operate the business and further their clinical skills before they purchase their own practice.
How to Transition Smoothly: The associate phase allows the young dentist to form a bond with office staff, build a relationship with clientele and network in the neighborhood. When the transition takes place, there should be very little change and upheaval for the patients because they’ve gotten used to seeing the young dentist around the office and throughout the neighborhood. They will also feel comfortable with his knowledge and expertise in the field of dentistry.
Building Equity before the Purchase: If organized correctly, there will be a principle for reaching the value of the practice during the beginning stages of the associate phase. This sets up a base amount and figures an increase in the price hinging on the growth of the practice during the initial associate period. This method discounts a specific amount of the growth, and it provides the young dentist with an incentive to get out there, and to help the practice become more successful. This also allows the dentist to build equity prior to the actual purchase.
The Associate to Purchase conversion methodology may not be suitable for everyone, but it can be a successful plan of action if it’s put together properly. This will be beneficial for both the seller and buyer. Part III will cover the most important steps on putting together a plan on how to buy a dental practice.