Independence or group practice—what will the newest dental graduates choose? Today’s millennial dentists who aspire to start their own practices tend to already have an insurmountable amount of student loan debt, in short, due to tuition costs increasing by nearly 100% in 2014.
However, millennials also gravitate toward the opportunities that owning their own dental practice can bring. They understand the control and independence they will have with everything from setting clinical standards and hiring support staff to establishing a location and ensuring their profitability.
Although those benefits are quite intriguing, millennials also have some hurdles to overcome. For example, since they are already burdened with a mountain of student loan debt, they may struggle to secure the $500,000 loan they will need to afford the cost of starting up a new dental practice.
For these millennials, it might be worthwhile to work as an associate in an established practice, pay down their student loans, and save to purchase their own practice in the future. With prudent financial planning and debt reduction goals, experts estimate that recent dental school graduates can potentially pay off their student loans in about 5 years.
In this day and age, another common struggle is the decline in consumer spending for dentistry, as it has been in a downward trajectory since the early 2000s. Couple that with the anticipation that the retirement boom will outpace the number of new dental graduates for next 6 to 10 years, and it becomes clear that getting a dental startup off the ground will be a significant challenge. More than 42% of working dentists are 55 years old or older and potentially poised to sell their private practice to up-and-coming dentists looking to build the practice they have been dreaming about.
The Silver Lining
The great news for millennials is that once they do launch their own dental practice, they will be a part of the top 15 most profitable small businesses. Another benefit dentists have is being able to establish a repeat patient business, which means guaranteed future business.
Additionally, several patients can be seen at the same time at a dental practice, and many of those clients will pay for services directly out of their own pocket. Patients also seem to prefer the personalized care that independent dental practices provide as they appreciate building a relationship with their dentist. It is a win-win, since solo dental practitioners have the independence to provide their patients with the best possible care.
What It Takes
To own a successful independent dental practice, practitioners need the clinical skills that certified dentists attain as well as a decent amount of business savvy. It all begins with the planning stage, which can have a huge impact on the success of a dental practice startup.
Practitioners need to develop a formal business plan that includes the most pertinent research regarding demographics, staffing needs, and financial projections to achieve profitability within the initial 6 to 9 months. It is also critical to carefully research and thoroughly understand the future patient base as well as the cost of necessary dental equipment.
To generate revenue by managing costs, lowering expenses, negotiating with vendors, hiring a support team, and having a powerful employee benefits package, dental entrepreneurs either have to personally take care of all of these business responsibilities or outsource. Turning nonclinical services over to third-party service providers allows dental practitioners to have full clinical control over their own practice and focus on their patients.
Location is another key component for a dental practice to thrive. When choosing a location, practitioners need to use current and precise demographic data, in addition to proper real estate negotiations, to find an area that fits their practice’s offerings and capacity. Having the ideal location is crucial for a practice to flourish during its initial year. Office design is essential to ensure it functions smoothly. Experts recommend having clinical standards dictate how the new office floorplan is designed.
Once the location is locked down, practitioners need to spread the word by using well-tested marketing methods. With the right plan implementation and the key components in place, millennials who dream of establishing their own independent dental practice can make it their reality.
Disclosure: Adrian LaTrace is CEO of Boyd Industries.