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In this article we’ll go through the considerations for starting a second practice.   Timing (Financial Considerations):   Profitability and revenue of your existing practice: Your first practice SHOULD be profitable from a BUSINESS PERSPECTIVE AFTER YOU DRAW YOUR 40%. Roughly 1 million in revenue is ideal as you should have a profit percentage of…

**Dental Practice Ownership: Are you buying yourself a job?** Owning a dental practice is an investment and sufficient profits do need to be made in order to have a return on that investment. Yes, there is no doubt, as clinicians, our first duty is to serve our patients and do what’s in their best interest.…

**Service Fees and Income** This article is directed at prospective owners rather than experienced owners. Through our consulting business we often get asked why there is a difference between the income figure on the profit and loss statement vs the income (or total billings/receipts) from the practice management software. Often, prospective owners go as far…

**Profitability Update** The dental industry, like many others, is not immune to the effects of inflation. There is a need to produce more income in order to maintain profits. We’ve posted an update on one of the most important slides from our start-up and buying seminar below. It shows target profitability at different levels of…

**Be aware, the low billing practice** There will be a tsunami of practices coming up for sale or are already on sale, that are billing less than $500,000 a year. These practices have no profit and many are making a significant business loss. Many of them were started up in the last 4-5 years. Some…

**Marketing Return On Investment (ROI)** Marketing ROI, measures the effectiveness of the practice’s marketing efforts in generating revenue. For a dental practice, successful marketing campaigns can attract new patients, retain existing ones, and promote higher-value treatments. Calculating marketing ROI involves comparing the cost of marketing initiatives to the revenue generated from those efforts. Analyzing marketing…

**Case Study: Assessing Financials**  Over the years we have seen many versions of dental financial statements through our consulting business. We’d like to think we have encountered most scenarios. However, every now and again we do get sent financials that surprise us. As a dentist looking to purchase a dental practice who has very little…

**Auxiliary Staff Ratios** It is probably the best time to visit this topic in light of increasing wages and difficult economic times ahead. In good times additional staff can go unnoticed, that is the additional billings make up for any staffing inefficiencies and hit on profitability. However, in an environment of stagnating or decreasing billings…

Profit! We expect dental practices that bill above 1 million to produce significant business profitability. We generally anticipate this to be around 20% of turnover. However, recently we’re analysing more and more of these practices that are far off this target with some even making a loss. Profitability typically rises with billings. There are exceptions…

Many good businesses have been undone by cash flow problems. For any potential practice owner, it is important they understand cash flow before embarking on ownership.   At its core, cash flow is defined as the amount of money going into and out of your business at a given time. When there is more money…

**Asymmetrical Risk vs Reward** Over the years we’ve presented and advised on many situations related to dental practice ownership. We came across the above drawing recently. This drawing perhaps visually demonstrates our guiding philosophy best. We always attempt to minimise risk. However, we also consider risk in the context of rewards and upside.   For…

**Opportunity!!!**   One of the most important lessons I want the attendees from my Practice Ownership seminars to learn is the ability to find opportunities which others may overlook. We have real-world examples of two potential dental practices for sale. We give attendees the information that they will likely receive from the broker and/or vendor…

I discussed this topic several years ago and have recently had an influx of associates contact me about their specific situation and if ownership is right for them. It’s probably a good time to revisit this topic.  Many associates have probably been super busy over the past two years due to considerable money flowing through…

Many dentist’s wanting to start-up a dental practice often encounter the dilemma of how large a tenancy to choose. This has become more relevant currently as fit out costs and rents increase substantially. The answer to this is multi-faceted. As a base one should know how many dental rooms will fit within a certain square…

We’ve noticed a recent spike in low billing surgeries coming to market and we suspect this trend to continue over at least the next 6 months as costs increase. We define a low billing surgery as one that does less than 600K per year in billings. This is the approximate point at which most dental…

At my practice ownership (startup and buying seminar) on the weekend, there was quite a bit of discussion about the economy and what we might expect coming up and what owners should be doing. I’d previously written about some things in 2020 when the downturn I predicted in our industry never actually materialised and things…

When looking at the impact of equipment on the overall value of a practice, it’s important to seperate out two types of equipment. Discrete, standalone, non standard items such as CBCT/Cerec and normal equipment every practice has. Discrete high value items, which can be easily separated and sold off are not the norm when discussing…

This is a must read for anyone considering purchasing a practice. I posted about this topic several years ago but it has become even more relevant in recent times. We’ll share some examples of hidden dangers to be aware of when buying a practice below. Most of this is from our own experiences analyzing practices…

I wrote this post for my professional forums but thought to share it here as some may benefit.Lots has been written about this previously – the conflicting roles and attitudes of owners and employees.I talk about incentives a lot. Humans, by their nature, are selfish. They act in self-interest. This is the core of owner-employee…

Recently we’ve been analysing several practices that have a demolition clause contained in their lease. It is essential prospective owners understand what this means and how to handle it. We must preface this article by saying we’re not lawyers and all commercial leases need to be examined and checked by a lawyer experienced in such…

Dental practice start-up success: We’ll discuss the main factors that influence the success of a dental start-up in this article. Please note these factors do not include start-ups that bring across an existing patient base.   Location: The location of a start-up is the most important of these factors. We’re not talking the micro location…

**What to ask for when analysing a practice for sale**   When analyzing a practice for sale it is important you receive certain important pieces of information from the vendor or broker. The purchase of a dental practice is a significant financial outlay and you must have the appropriate information in order to analyze it…

Two of my startups are located within a medical centre with allied health. 10 of my other 11 practices are in a centre that also has a doctors surgery.

It’s the time of the year that many practices will be reflecting on the past financial year. Profit and loss statements will be produced and tax returns completed. For many practices it was perhaps the best financial year in their history. Owners will be considering expanding or developing their own premises. New South Wales or…

The importance of the items fee report We wrote about this several years ago but have found it more relevant recently and we have accordingly provided an updated version below.   The items fee report is perhaps one of the most underutilised pieces of information when considering whether to purchase a practice. Each practice management…

**The Lease Offer** You’ve found an excellent area to start-up in and tenancy to lease. Now what? The landlord or its agent will provide a lease proposal or heads of agreement. This covers the key terms of the lease and is negotiable. However, it is important to note that any lease proposal or heads of…

Associate buy-in & Corporate offers This is an interesting and somewhat controversial topic. The scenario typically unfolds in the following manner. A dentist owner nearing retirement starts to think about selling their practice. They ideally want their associate dentist to buy-in for a share of the practice or to purchase it outright. However, the owner…

The Haggle  When we purchase items such as a television or a car we all want to feel like we got the best deal possible. It is disappointing when we find out our friend got a better deal on that new television or that new car. People try to translate this over when purchasing a…

Most associates will ponder this thought at some point in their working careers. The Covid-19 Pandemic has perhaps bought this thought to the forefront for many associates who may be at a crossroads. Below is a reworking of an article I have written in the past. Traditionally, practice ownership was a rite of passage for…

So you have found a dental practice that meets your criteria and you have decided to purchase it. In this article we’ll discuss the sale process and what is required. 1)      You need to have a buying entity setup. Ideally have this setup when you know you’re interested in ownership rather than when you find…

Profitability Vs Cash Flow This is perhaps one of the least understood aspects of dental practice ownership. I have even had dentists who have been owners for many years fail to understand the difference. For any new practice owner in today’s high risk climate it is important they understand this concept thoroughly before embarking on…

**The Biggest Challenge Facing Dentistry** Someone asked me what the biggest challenge facing dentistry is going to be in a post-covid world. Simply put – the biggest challenge will come from within the profession. It will be significant price discounting. I’ve written about this before. I think the most susceptible areas will be medium SES…

One aspect of practice purchase (or sale), that isn’t often considered is the leave entitlements for employees and their transfer to the new owner. There are quite a few aspects to this but it is important that you use a good commercial lawyer for a purchase transaction as there are a multitude of factors that…

**The Struggling Branch Practice** Over the years we have analyzed over 15 practices that we consider to be a, ‘struggling branch practice’. We have noticed a common theme amongst these practices. 1) Almost always the owner has had another good to excellent practice (in terms of turnover) not far away (within 20-30 mins drive). 2)…

Covid-19 & Dental Practice Sales 𝐴 𝑀𝑈𝑆𝑇 𝑟𝑒𝑎𝑑 𝑓𝑜𝑟 𝑒𝑣𝑒𝑟𝑦𝑜𝑛𝑒 𝑐𝑜𝑛𝑠𝑖𝑑𝑒𝑟𝑖𝑛𝑔 𝑏𝑢𝑦𝑖𝑛𝑔 𝑜𝑟 𝑠𝑒𝑙𝑙𝑖𝑛𝑔 𝑎 𝑝𝑟𝑎𝑐𝑡𝑖𝑐𝑒 The impact that Covid-19 will have on the dental practice sale market is uncertain. However, we are beginning to see activity in the market that provides us with greater clarity on how things may play out. Firstly, the government…

Government Economic Stimulus Package – What it means for the economy and YOUR DENTAL PRACTICE A few people have asked me for my views on the stimulus package including practice owners, associate dentists, supply company reps as well as others in business, more broadly.   Firstly, let me begin with a BIG CAVEAT. The economic…

We assess many practices every year from all around the country, whether it be associates looking to buy in to the place they work to people purchasing a second practice. Even in divorce cases where spouses are looking at appraisals for the purposes of asset splitting. Something we are seeing more and more, which I…

𝑻𝒉𝒆 𝑫𝒆𝒏𝒕𝒂𝒍 𝑷𝒓𝒂𝒄𝒕𝒊𝒄𝒆 𝑶𝒘𝒏𝒆𝒓𝒔𝒉𝒊𝒑 𝑻𝒆𝒂𝒎 Practice Ownership can be highly stressful but having a team of professionals ready to support you will go a long way to alleviate this stress. I would highly recommend every dental practice owner have the following professionals on side. Lawyers: Commercial lawyers experienced in dental are extremely valuable when things…

The following is a fictional scenario. Joe is a young dentist with about 5 years of experience. He starts a practice and within 2-3 years he has the practice billing about $900,000-$1,000,000 a year, working 50 hours a week and having 2-3 weeks off a year. He is busy. Very busy. His patients love him…

So you have decided that practice ownership is right for you and you are keen to become an owner. Where to next? Should you consider starting up a practice from scratch or should you purchase an existing one? This article will discuss the ins and outs of both options. I’ll declare my bias from the…

If you haven’t read the first part, please do so here: https://practiceownership.com.au/business-partnership-profit-split-in-a-dental-practice/ In the first part we covered profit splits and the issues they may cause. The other aspects that cause issues amongst business partners are practice management tasks. Often, one partner will feel things are not fair because while the other partner may bill…

I often get asked about how to financially structure a partnership. Unfortunately, I also hear about many partnerships breaking down or experiencing issues because of discontent about the financial arrangements/structures in the partnership. To me, the vast majority of the time, issues arise because either one or both of the partners don’t have an appreciation…

I’ve been hearing more and more cases of Dentists signing up for exorbitant rental rates. There are some places in Melbourne and Sydney charging $1000+/SQM!!! For a practice to be profitable from a business sense, rent including outgoings needs to be under 10% of total turnover. Further, in terms of benchmarking and in comparison to…

One of the most important lessons I want the attendees from my Practice Ownership seminars to learn is the ability to find opportunities which others may overlook. We teach this through providing a real world example of two potential dental practices for sale. We give attendees the information that they will likely receive from the…

Continuing on from last article which can be found here: https://practiceownership.com.au/scaling-and-expansion-to-multiple-locations-or-larger-practices/ – we go into other areas which will aid in your ability to scale to multiple and larger practices. 3. Trust your staff and delegate EVERYTHING When I state that you need to delegate, it’s because if you want to scale and do everything yourself, you…

How much savings should you have before considering dental practice ownership?   This is a common question I am asked by associates. Cash savings are important for the cash flow of any new business. Unexpected bills at the wrong time and quiet periods in the industry can cause significant problems if you do not have…

**The Hidden Dangers When Buying a Practice** A MUST READ FOR ANYONE CONSIDERING PRACTICE PURCHASE I posted about this topic several years ago but it has become more pertinent in recent times. So you’ve been looking at buying a practice? Check out a few? Seems like quite a few other dentists are also interested and…

This post delves into dental industry benchmarks.

The decision to continue working at your current job while your startup builds up can be a difficult one…

I take a multi-step process when choosing a location for my startups. I have started 15 practices and approached each in a similar way. One important step of this process is a thorough competition analysis. While many established dentists will tell you that it’s not about the competition, if you work hard and provide an…

I’ve stated this in many posts and articles over the years. Learn to delegate. Doing everything yourself is not business ownership – it’s basically just buying yourself a job

Many people ask my what the difference is between life as an associate and a practice owner. In this series of articles, I’ll delve into the main things you need to be prepared for.

Hierarchy is very important especially if you want a passive business that runs itself with only little input from you. However more than just having a hierarchy, i

You must be able to take out teeth. Most general practices will have lots of exodontia. Not only is it profitable but it is a requirement to get the majority of toothache patients

Nowadays, many shopping centers are asking dentists to contribute to a marketing fund for the entire shopping center. Sometimes this is a fixed amount per tenancy,

Many people ask me about various aspects of a passive income dental practice where you don’t actually work much in the practice yourself. Here is a collection of tips

I received quite a few questions after my last post regarding a high earning associate who discovered practice ownership may not be for them.

During my practice ownership seminars this year, one of the attendees approached me inone of the breaks and randomly put his hand on my shoulder and thanked me.

I thought I would write an article that may help new dental practice owners or those looking to get into dental practice ownership. These are 5 things that

I often get asked by dentists whether they should look at ownership or stay an employee or associate. The answer to this seemingly simple question is actually

In today’s ever competitive environment, what is the best approach to take when starting a dental practice? Should you start to create lots of hype amongst

It is important to realise the the most important part of your business is you! As the business owner, many responsibilities fall on your shoulders and as the owner

Over the last few weeks, I’ve had the opportunity to beta-test a lot of the topics in my upcoming seminars on quite a few dentists. Most of them have been

One of the common questions I got asked regarding practice ownership at the seminar this weekend was around dealing with the stress and anxiety during