By: Bruce Bryen
The dental practice purchase that you recently made was like a dream come true.
After working as an associate for a number of years, it seemed like the pinnacle in dentistry was reached when you became an owner.
Learning as an associate certainly assisted in understanding relationships with patients and staff. The time to learn never stops as each patient is different and each staff member is not the same.
There are many more items to be concerned about after buying a dental practice than those as an associate. There was a picture of the owner doing these things but not really creating an impact on you as an associate as to the result of these circumstances.
New Dental Practice Owner Responsibilities
Handling Employee Compensation & Bonuses
Finding out that some staff members are worthy of raises in pay while others are not, is a lesson that comes with ownership and is a lot more difficult than being an associate and watching a different owner award pay raises, bonuses, and other perks to certain employees and not to others.
Making these decisions on your own is much more difficult to do. Will the employee quit and bring other personnel with them when leaving? This would hurt the infrastructure that you recently paid for when acquiring the dental practice.
Purchasing Dental Supplies & Equipment
The buying of dental supplies and equipment is now a 100% responsibility for you.
- Do you maintain the dental supply house used by the former owner or shift the supplier?
- How do you check out the pricing and the delivery schedules?
Fortunately, the dental supply house is one of the many areas where competition prevails and you will get an opportunity to test the marketplace by sharing or changing all of the purchasing activity to accommodate what is attempting to be accomplished with pricing and delivery speed.
Inventory supply is another item and an important one that you can receive help with from the dental supply representative.
The decision may be to remain where you are and negotiate better terms and conditions with the existing supplier.
Retirement planning and the advisory services offered by the current advisory group should be compared for creativity in the design of the plan as well as the pricing of the package you are receiving.
Accounting & Legal Services
The same situation is prevalent with the other professional services being offered to the dental practice.
Accounting and legal services should be competitive as well, offering creativity, pricing, and speed in presenting those services.
Hiring New Associates
Since you have had experience being hired as an associate, this task may seem easier to you than the other jobs you had to perform on your own after the practice was purchased.
When is the right time to hire an associate?
You want your patients to be taken care of and not have to wait for the dental hygienist or for the dental professional to see them when they have an appointment.
This is an area (waiting) that really upsets a patient. Sometimes these things can’t be helped but most of the time, the dental practice should make sure that patients are not waiting for service with unreasonable times in the waiting room.
Keeping the patients waiting for too long is a way to lose the patient and the resources such as the contacts that person may know who could have been great referral sources.
You will know the right time to hire an associate if a patient loss occurs too frequently and the complaint may have been the time in the waiting room.
Of course, the cash flow of the dental practice may be the most important indicator of the hiring process regarding when the associate should be hired.
Can You Handle the New Dental Practice Owner Responsibilities?
You are now the owner and with it comes all of the above points of responsibility and even more.
- Can you handle the responsibility?
- Can you innovate and be creative when you have to be?
You had a list of changes you were ready to make when analyzing the dental practice that you were going to buy.
With advice from the existing or new dental practice CPA and other advisors, your financial changes may have the input of an expert in dental practice accounting and cash flow.
Projections and tax-saving ideas are part of the approach where a smart decision today may set the stage for years’ worth of cash flow that would not have been available except for the decision made with the assistance of an expert dental CPA.
The employee contract prepared by the attorney for the practice may save thousands of dollars in legal costs if the future because of the input that the dental attorney understands and insists upon being in the employment contract.
You Don’t Have To Handle It All On Your Own
From the beginning of the time the associate starts looking for a dental practice to acquire, if he or she is smart about it, an advisor will be hired to offer advice as to what is right and what is wrong with the practice you may be interested in buying.
It is too expensive to have the advisor, typically a dental CPA, look at every practice in which you have an interest but for those in which you are serious, these are the ones in which the advisor should join in your analysis.
You shouldn’t expect the dental CPA to advise you on clinical matters but he or she should know much more about the financial side of the situation than you and should be able to give you some assurance about your safety in the financial side of the practice you are purchasing.
Buying right and financing properly are some of the safest ways to protect your assets and enhance your net worth as an individual once the practice starts on its routine from day to day and year to year.
Up Next: Choosing the Best Business Structure for Your Dental Practice
Photo by Suzy Hazelwood