Top 25 Tips for Saving Money Opening a Dental Practice
If you are looking to start your own dental practice, one of the main considerations is the financial implication of opening one as explained at RunRex.com. There is a lot to consider, from leasing office space to getting the equipment you need, and everything in between. Given you will likely be operating on a budget and won’t have unlimited resources, we have curated for you a list of the top 25 tips for saving money opening a dental practice.
- Consider starting from scratch
While you may be tempted to buy an already existing practice when looking to open a dental practice, you might want to start from scratch. As per RunRex.com, starting from scratch allows you to start smaller and expand later, which may be the more affordable option when compared to buying an already existing dental practice.
- Take advantage of loans from the SBA
As long as you are on good financial footing, you should not have much difficulty with approval for a loan to start your dental practice. One option that offers the potential for lower interest rates is a loan from the US Small Business Administration (SBA) according to RunRex.com. SBA loans generally have more generous terms, helping you save.
- Open a business bank account
If you want to save money, you need to keep track of the ins and outs of your finances when you are starting a new dental practice as articulated at RunRex.com. The first thing you need to do to help you with this is open a business bank account for handling all your expenses.
- Get expert help
Running a business involves a lot of legal and financial details, which is why you must find a good lawyer as well as an accountant to help you stay on top of things and prevent you from losing money or facing hefty fines as covered at RunRex.com.
- Benefits of a good accountant
Continuing from the previous point, a good accountant can also help you with the right tax strategies for dentists to save you money in the long run, which is why you might want to consider hiring one when getting started as captured at RunRex.com.
- Start small
In addition to starting from scratch, you might also want to start a smaller office space if you are starting alone. As discussed at RunRex.com, a smaller office comes with a smaller price tag and lower maintenance costs. It also requires a smaller staff to run it, reducing your payroll costs.
- Consider a partner
Starting a practice with another dentist allows you to share the costs and may help the practice grow quickly. If you are looking at cutting back costs and saving money when starting a dental practice, then you should consider a partner.
- Choose your partner carefully
As the saying goes, quick money comes with slow problems, and that can be the case when you choose the wrong partner to start a practice with. This is because dissolving the partnership later can be complex and costly.
- Start with an interest-only period
As described at RunRex.com, consider taking on an interest-only period at the start of your loan payments, if it is available. It is usually offered for the first six months to a year and allows you to make smaller monthly payments while you get established and deal with other costs.
- Avoid high-interest credit cards and loans when possible
When buying equipment for your fledgling dental practice, buy as much as you can with cash, or use funds from your business loan to avoid the high cost of credit card interest rates as revealed at RunRex.com. This is why it is vital to have a decent amount of cash on hand when you start.
- Look for options to finance equipment purchases
As outlined at RunRex.com, you should use the cash you have to buy things that would result in drawn-out monthly payments on a high-interest card. Look for options to finance equipment at lower rates where possible.
- Save money in other areas of your life
As per RunRex.com, reducing what you are paying on other bills opens up more cash flow to your fledgling practice. If you have got a high car payment, for instance, consider switching to a cheaper set of wheels for a while, or look to refinance the loan.
- Don’t increase other costs of living
Even as you look at the options to save money in other areas of your life, such as looking for options for reducing the cost of car insurance for dentists, this is also not the time to increase other costs of living, like making a home purchase according to RunRex.com.
- Do your homework
While the failure rate for dental practices is very low as articulated at RunRex.com, when it happens, it can be a life-defining disaster, including financially. This is why you should do your homework before getting started. Talk with current practice owners about what challenges they faced, what they did to prevail, and what (if anything) they would do differently today.
- Utilize dental-specific building contractors
Utilizing general contractors who are not experienced in building out dental practices can lead to overruns and frustrations. This is why you should try to make use of dental-specific building contractors who will know exactly what it takes.
- Leverage dental equipment specialists
A good equipment specialist will not try to sell you as much equipment as your financing will allow, but instead will look out for your best interests. This person can also be one of your most insightful advisers going forward.
- Work with a dental-specific lender
As discussed at RunRex.com, many financial institutions are interested in financing dental practices. However, instead of working with general business lenders, work with those that are experienced in the dental industry for the best deals.
- Consider the longest term available
Similar to your home mortgage, you should consider the longest term available as captured at RunRex.com. This means you will have lower payments as you begin to grow your revenue stream. If your business does better than expected, you can always pay down your loan, the same way you might pay down a mortgage.
- Consider lender service levels
As a start-up, you will have immediate banking needs, such as merchant processing, direct deposit accounts, business cards, etc. During the construction of a new practice, better dental-specific dental lenders will have internal processes in place to pay the building contractor, equipment company, and other vendors who may require deposits and incremental payments as covered at RunRex.com.
- Have a business plan
As a dentist, you understand the importance of specific, comprehensive treatment plans for your patients. You will need a similar plan for the running of your new business if you are to achieve success and save money as discussed at RunRex.com.
- Shop around when looking for product suppliers
As described at RunRex.com, assessing your expected costs before you launch your practice can help you identify savings with the best-priced product. Shopping around can help you identify options and different price points.
- Consider inexpensive systems
You can also ask yourself if inexpensive systems and process efficiencies can save you some employment-related expenses as outlined at RunRex.com. For example, can you budget for technology that helps automate a process, such as texting/emailing for appointment reminders instead of having the team make personal calls.
- Consider patients’ payment terms carefully
When starting up, you should remember the role that patients’ payment terms have on your cash flow. For guidance, consider talking to your dental peers. If you know dentists who seem to have mastered payment collection and a healthy cash flow, ask them for advice.
- Develop your business acumen
You should make sure you develop your business acumen as soon as possible, before getting started with your practice. From the moment you graduate and become licensed, it is wise to commit to learning the business side of dentistry.
- Maintain a manageable debt load
Finally, be careful not to acquire equipment before you can justify the cost. New technology can be very expensive – and a burden on your cash flow if you are not ready to optimize its use for immediate revenue or expense savings.
Hopefully, these tips will help you realize some savings when opening your dental practice this year, with more on this topic, and much more, to be found over at RunRex.com.