Entrepreneur or employee?
Originally printed in DENTAL ECONOMICS 6/2013
Buying an Existing Dental Practice Vs Starting a Brand New Dental Practice - Dr. Jeff Carter
How do you envision your career in dentistry? Are you energized by thoughts of entrepreneurship competing in a rigorous marketplace? If so, what are your alternatives? Here are some factors to consider in buying an existing dental practice Vs opening your own dental practice.
Article by Jeff Carter, DDS, and Pat Carter, IIDA
How do you envision your career in dentistry? Are you energized by thoughts of distinguishing your practice from others and competing in a rigorous marketplace? Or do you prefer to focus on clinical dentistry, be fairly compensated, and let someone else worry about all that other stuff?
The choice doctors make between being an entrepreneur vs. being an employee may not be new, but the dynamics impacting either choice are evolving dramatically. We feel it is more appropriate to assign the moniker "entrepreneur" to dentists who are business owners, and "employee" instead of associate to dentists who choose to work for someone else. These are neither accolades nor pejoratives, but rather useful terms for future practice models.
… And what does this have to do with design?
As designers, we invest nearly as much time helping doctors make sound decisions regarding the logistical challenges that dental facility projects present as we do actually designing the project.
The logistics of successful new projects include making appropriate choices for:
- Facility location/site
- Size of facility
- Number of operatories
- Total project cost
- Business entity formulation
- Financing options
- New purchases vs. reuse of existing equipment
- Timelines
Many of us prefer to live and work in upscale and trendy environments. What has changed for those who desire to practice in coveted locations is the ferocity of competition. You are now competing against corporate dentistry franchises and multispecialty practices led by exuberant visionaries. You may be one of those exuberant visionaries who create a practice so distinctive from the others that you drive your local dental marketplace, and others try to keep up with you. In our experience, these visionaries don’t need a lot of sleep and carry more than one cellphone.
Considerations when practicing in highly competitive areas:
- Many savvy businesspeople assign dentistry to the retail business category and are therefore in competition for discretionary dollars with large screen TVs, automobiles, clothing, cruises, and more.
- To compete for those discretionary dollars in an upscale retail environment, it is paramount to consistently invest in marketing, which includes the appearance of your facility.
- Unfortunately, it is common for many dental facilities to maintain their "look" for many years if not decades. Can you imagine Nordstrom, Niemen Marcus, or even Target expecting customers to pay current prices for their products displayed in an environment that remains unchanged for 15 or 20 years?
- By contrast, your upscale retail neighbors will remodel and refurbish their facilities every five years or less. Through marketing materials and rearrangement of product displays, these same neighbors will create the perception that the interior of their store changes seasonally, drawing in curious customers. This is what you are competing against in coveted locations. Dental corporate franchises and exuberant visionaries understand this and market to it.
What can I do as an entrepreneur locating in a highly competitive area?
- You should research area demographics for locations where you are at least the first or second practice to locate there and not the 10th.
- Budget additional funds for marketing and facility improvements beyond typical overhead percentages quoted for dental practices to invest in facility updates and upgrades.
- Accept the premise that you are the "entrepreneur" of a dynamic, evolving business model, and create additional ways to be successful.
- Get a second cellphone.
What other options are there?
