If you own a dental practice, does it make sense to own two or more practices? Absolutely! As the owner of LifeSmiles, a thriving dental office in Phoenix, Arizona, I recommend owners consider opening a second practice, provided the first one is doing well.
“If owning one practice is good, should I own two?” is the topic for today’s blog. It will excite all owners of dental practices reporting growth. The short answer to the above question is “it depends.”
Most humans have the “grass is greener” syndrome, meaning we believe the grass is greener on the other side. We think, “This practice is okay, but if I had one in this neighborhood, it would be much better.” This may not always be true. Owning multiple practices may be an excellent decision, or a poor decision, depending on each situation.
Some dentists want to own more than one practice as they are passionate about helping more people have great oral health. That’s very noble.
Dr. L.D. Pankey, a major influence in my life, who taught me about the need to understand as much as possible about the behavioral and people-side of dentistry, cited four things all dentists need to be successful:
- They need to know themselves.
- They need to know their patients.
- They need to know their work.
- They need to apply their knowledge.
The entrepreneurial gene
Some dentists have the entrepreneurial gene. They love building businesses more than doing dentistry; they enjoy hiring, marketing, and trying out different business ideas. However, most dentists would shy away from business. They may not see themselves as “business people” and may ignore the business aspect in favor of the dental aspect.
This is why a partnership works. It could be two spouses or strictly business partners, but if one person focuses on the clinical side and the other on the business side, they are more likely to succeed with multiple practices. It is difficult for one person to own several offices and be in charge of everything at every place, although there are dentists who have achieved growth in multiple practices, having worked hard for that success.
You shouldn’t consider owning multiple practices if your first one is not thriving. In this case, focus on the first practice instead. The first practice should provide personal, professional, and financial satisfaction. It should be the mothership, the incubator to the next practice, be it an acquisition or a start-up.
Your first practice could be a solo or two-doctor operation, but the latter would give you more strength and flexibility. If your first practice is systems-driven, you can apply the same to the new practice. Otherwise, you may have to be person-dependent, in which case, you can get the person with the expertise to share his/her knowledge with the other team members.
Buying vs. starting up
Buying a practice is recommended in most instances over building a start-up as the former would already have an associate or partner. If done right, you won’t have to go out of pocket to support the second practice. It will produce profits and EBITDA (Earnings Before Interest Taxes Depreciation Amortization).
You can use digital marketing to boost practice growth if the former owners haven’t already done so. You can also introduce a second doctor to your first practice, have them learn the business thoroughly, and put them in charge of the second office.
Even if your second practice is located far from the first, it’s not difficult to manage with current technologies. If your first practice is already successful, considering a second or even third is certainly within your capability.
Want to learn more about owning and growing a second dental practice?
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