5 Tips to Opening a Dental Practice

Author: Cirrus Consulting
Connect with Cirrus about your lease negotiation and renewals via our Dental Business Directory

1) Outline your short- and long-term business goals

Your new practice venture should begin with a detailed outline of your business goals. You can begin by asking yourself a series of defining questions:

  • What date are you looking to open your doors? This will help to begin setting up a timeline with key dates and action items.
  • What are your short and long-term plans for growth? Do you see yourself bringing in associates? Will you specialize, and offer patients more than just General Dentistry services in the space – perhaps Ortho or Endo? Will you require the option to expand to eventually grow production?
  • What phase of your dental career are you in? Perhaps you’re a new dentist who’s been associating for several years. Maybe you are mid-career and are finally ready to open your own practice. Or perhaps you’re a late career dentist, opening a practice with plans to retire and sell within 5-10 years.
  • What are your financial objectives? What is your target annual production and revenue? What have you budgeted to spend on getting the practice set up?

2) Evaluate whether to buy or lease dental practice space

There are advantages and disadvantages to both. Buying the real estate offers flexibility on how to use the space, and the freedom to control the property, as you will be your own landlord.

Owning requires a great deal more money, but also entails more responsibility., As a landlord/property manager, increased duties and obligations will take time and concentration away from the core business of dentistry.

3) Assemble the right team to achieve your practice goals

Select a trusted team that you can depend on – for starters, you’ll require:

  • Qualified office manager/admin team/other associates
  • Designer
  • Equipment supplier
  • Technology specialist
  • Financial advisor
  • Builder/contractor
  • Accountant/CPA
  • Professional dental office lease negotiator

4) Strategically choose a location with the potential for success

The location of your dental office will have a direct impact on the success of your business. Consider the following when looking for a home for your dental clinic:

  • How important is a high-visibility location such as a plaza/store front vs. a low-visibility location like a medical building?
  • Is the neighborhood residential, rural, or urban? Is it family-friendly with schools and grocery stores nearby? Ensure that the demographics of the neighborhood match your target patient.
  • Will you be located near other businesses in the vicinity that could drive traffic to your dental clinic such as a shopping mall or movie theatre?
  • Are there other dental or hygiene clinics setup nearby that could pose competition? What about the presence of dental specialists that could refer business to you, and vice versa?

    5) Negotiate the Dental Office Lease Agreement

The lease is a tool that can help facilitate the success of your practice by providing protection and flexibility – or, can be destructive, contributing to the demise of your clinic. The following are some important considerations in the dental office lease agreement:

  • Does the lease commencement date and length of term align with your practice goals?
  • Are the proposed rental rates fair market value?
  • Is it a Gross or Net lease?
  • Does the lease contain β€œdeath and disability” protection in the event you become disabled and cannot work? This language will help protect your family/estate from suffering unexpected, unmanageable debt.
  • Do you have location protection? Ensure the β€œrelocation clause” in the lease prevents your landlord from uprooting your clinic throughout the lease term.
  • Are you protected from the landlord moving competitors into the building/center? Negotiate β€œexclusivity” language into the lease to prevent this from happening.
  • Does language in the lease allow you to expand your services and introduce specialties such as Ortho or Perio? Check the β€œuse of premises” language to ensure you can grow your business without landlord interference.
  • When the time comes to sell the clinic or retire, will the landlord have a right to collect a portion of proceeds from your practice sale?
  • Will the landlord have a say in the selection of a future owner of your practice?

These are just some of the issues that can be avoided with a well-written dental office lease agreement. It’s recommended to seek out professional dental office lease negotiators to review the details of your lease to ensure you’re signing off on a lease that will help you flourish.

Author: Cirrus Consulting
Connect with Cirrus about your lease negotiation and renewals via our Dental Business Directory