As a dentist and small business owner, are you taking advantage of the growing dental market? Are you considering a dental office expansion? Advances in technology are propelling the industry forward, giving additional treatment opportunities to larger patient populations. According to Dental Economics, more than 65% of the US population has coverage with a dental benefits plan, and aging patients require more frequent dental visits.
Growing your business can be done in a number of ways. It can involve increasing office visibility with a more favorable location. It can also mean adding space to an existing location, which would allow for increased capacity to provide a wider range of services. So, how do you know if or when your practice is ready to grow? And once you know, how do you get started?
EXPANSION OPTIONS AND CONSIDERATIONS
The most common challenge for dental practice owners considering office expansion is “when.” The “when” depends on many different factors including:
- Are you creating positive cash flow?
- Do you want to move to a new area or another part of town that offers better visibility and helps grow your client base?
- Are you outgrowing your current space?
- Do you want to add more technology?
If you’re answering “yes” to these questions, then it’s time to move from “when” to “how.”
There are different approaches for securing dental office expansion financing. Consider the following situations:
- Relocation—Oftentimes, the location you chose for your practice is no longer working. It may not provide the space you need, or it might not be in the place you desire. As a common choice for dental practice owners, relocation allows practices to overcome these limitations. A new location can help grow your patient base. For example, the ideal location is visible from sidewalks and roadways as this generates more brand awareness and easier access for new patients.
- Second location—If your first location is successful, expanding to a second location under the same brand is a good option to broaden your visibility, patient base, and workforce. Since you already have an established business plan, strong patient base, and successful associates, the upfront risk is often lower than initial set-ups and getting into the market. However, it’s important to consider that opening a new location is no simple feat (as you undoubtedly know from opening your first practice). Your first location must be a well-oiled machine so that you can focus your efforts on your new office.
- Acquisition—Purchasing a competing dental practice is another growth option. This approach can come with less risk than opening a second location. Be sure to weigh transition risks carefully. Think about the practice you’re considering buying. How loyal are the employees and patients to the owner? What will be your immediate gain? How will your cash flow be affected?
When choosing an expansion option, consider purchasing the real estate. Owning real estate creates more opportunities, such as tax benefits, property value, design control, and potential rent income.
BUILDING YOUR VICTORY TEAM
Regardless which path you choose, a business expansion at the right time with the right partners is key to being successful. Developing the best team for your expansion helps ensure support and success. Your team should include individuals and organizations who understand the dental industry, speak the language, know your market, and can advise you on the obstacles you’ll face.
You should include the following key partners:
- A lender with programs specifically for dentists
- A real estate broker who knows the market
- Architects and contractors who have experience with dental or medical practices
- Dental equipment representatives
- A CPA and/or financial advisor to counsel you through short- and long-term financial implications of property
- A business consultant to advise and prepare you for expanding your practice
Don’t forget about your current internal team. Staff members can be encouraged and rejuvenated by growth opportunities. Keeping your employees informed and making them part of the victory team can boost morale and excitement.
Office expansion can come with challenges. However, with the right team, experience, and location, the opportunity is undoubtedly something to make you, and your patients, smile.
The LenDRgroup Consulting team cares about the long-term success of your practice! No matter if you are in need of practice financing or business consulting, we are able to craft a customized plan to fit the unique needs of not only your practice, but also your career. We bring a lending platform comprised of 300+ dental and healthcare-specific lenders, and we built this network with the purpose of helping dentists, veterinarians, and physicians. We want you to achieve your dreams of practice ownership while eliminating the obstacles associated with practice financing.
To date, we have helped hundreds of medical professionals expand and grow their practices. LenDRgroup Consulting recognizes and understands your business needs. We can provide guidance to help avoid costly mistakes. So, let’s get started. Schedule your one-on-one consultation today!