Welcome to this week’s newsletter. This week, the Smile-on News team are delighted to welcome Neel Kothari as Guest Editor. Before we hand it over to Neel, just a reminder that the Clinical Innovations Conference is now only 2 weeks away. Here at the Smile-on News office we’ve been busy packing delegate bags and preparing the rooms for what will be a great few days, celebrating all that’s new and innovative in dentistry. Luckily, there a still very limited places available so, click here, and you’ll be able to attend the event of the year! Over to you, Neel.
Almost 5 years ago I made the leap from associate to principal. Having not worked at the practice before - or in a predominantly private setting - this represented a huge risk both financially and career wise. Thankfully the practice is doing well and in my case the gamble has paid off, but in all honesty it has been a steep learning curve and I've encountered a number of pitfalls along the way.
To share my experiences I thought I would look at the Who, What, Why, Where, When and How of practice ownership, as well as some of the pitfalls I've experienced.
Personally, I think that Why? is the most challenging question of them all. For some it may be for increased autonomy in the way they practise, whereas for others it could be for a greater financial reward or long term job security. In my case it was probably a bit of all three, but it's worth noting that not all associates are profitable for practice owners, with many just about breaking even. If increased income is your main reason it's worth figuring out how profitable you actually are as an associate - you may not find that the additional income (if any) is worth the hassle.
Who should run a business? Well this is also a tricky one, because dental schools really offer us NO preparation in running a complex small business, heavily entrenched in legislation. I suspect that writing for Smile-on over the past few years has helped keep me up-to date with a number of aspects affecting dentistry and if you want to own a dental practice the one thing that I found was there is no 'dummy's guide' out there telling us what to do. The rewards are clear, but bear in mind that you may have to spend many evenings/weekends scouring through websites, dental magazines/journals as well attending meetings and so on, many of which you would be shielded against as an associate!
What type of business should I buy? NHS, mixed, fully private? Single surgery? Multi-chair? Each of these options have their advantages and disadvantages. A fully NHS practice might not be what you want, but offers a considerable amount of financial security, which is why goodwill rates are currently at an all time high. Equally, a number of private practices started off as NHS practices, built up their numbers and subsequently converted. The risk here is that patients may choose to go elsewhere or that you may not provide the type of care that the patients are accustomed to. For instance, if you are considering buying a practice from a retiring dentist who carries out a range of advanced procedures such as implants and you do not, it may be hard to maintain the goodwill you have paid for, making it relatively expensive.
In my case I was able to add to the range of services provided by my predecessor. This helped to lessen my risk, making what I paid for the goodwill seem better value for money. Equally I have a small NHS contract securing a regular monthly income (provided we meet our UDA targets).
Where should I buy? When I worked in central Cambridge the population was fairly transient, but my practice is now located in a village south of the city and there are significant differences. The vast majority of my patients live near my practice, have been coming to the practice for years and will probably continue to do so in the future. I probably carry out fewer aesthetic treatments such as tooth whitening, but have found a reasonable level of demand for treatments such as dental implants, crowns and bridges.
The villages south of Cambridge are relatively affluent and this is a huge factor in figuring out what type of dentistry you are able to practise outside of the NHS. At face value it may seem that working in an affluent area would be the more preferable choice, but remember if you are unable to meet your patients' expectations (regardless of where you work) you still run the risk of losing patients.
So when is it the right time to buy? I suspect that this is different for each person. As an associate you can dedicate your entire time to honing your clinical skills without the burden of running a practice. I would recommend that you are at first comfortable and confident in all of the common aspects of dental care before taking the leap to becoming a practice owner. For me this involved going on post graduate courses and having a mentor guide me through more advanced dental procedures. Whilst this can still be achieved as a practice owner, I'm sure I would personally have struggled to do both at the same time.
And finally How? Owning your own business can be achieved in several ways, from setting up your own practice, buying into a partnership or even an outright purchase. The lack of NHS funding and heavy burden of legislation makes setting up from scratch a difficult but not impossible task. Getting into a partnership is a little bit like finding your ideal life partner whilst out drinking during happy hour. Sure it can work, but there is also a potential to wake up with the mother of all hangovers. Prior to an outright purchase I entered into a fixed term partnership. Let's move on.
In writing this article I have tried to be as candid as possible. For me, taking the leap has been a positive and rewarding experience, but in truth much of this has been through luck as opposed to having a shrewd business mind. Whilst I strongly encourage practice ownership for the right person, the only recommendation that I have is that you are brutally honest whether this is the right move for you.