I have said it before, and I will say it again: now is a fantastic time to buy a practice! Today’s low interest rates, motivated buyers, and comprehensive support network can help you launch the next phase of your career.
Buying a practice takes time and effort — which can be hard to invest when you’re already working full time, especially when you try to juggle all the other “life” stuff, too.
However, I have never heard an owner say they wish they had waited to buy. In fact, I often hear the reverse: owners who wish they had bought sooner. In many cases, they were simply too comfortable with an associateship. They liked the work, their colleagues, and their schedule. Even so, they knew that they wanted to own, just like the 83% of graduating dentists who want to own a practice within 10 years.
Practice ownership is not for everyone. If the thought of managing people, financials, and decisions gives you hives, you may want to stick with an associateship.
If you have ever thought about buying, though, read on for two stories of dentists who wish they had acted sooner.
Dr. Charlie: “someday” never came
Dr. Charlie graduated from dental school full of enthusiasm. He quickly found a job in a large-group practice but soon realized it was too busy and noisy for his liking. He came home most nights with a headache. After a couple of years, he found an associateship in a small-group practice, just him and another dentist a few years older. It was a much better fit. He settled in as he got married and welcomed two children.
From the time he was in high school and decided on dentistry, Dr. Charlie had dreamed of owning his own practice. He could envision the sign out front with his name. He knew he would sponsor a Little League team and welcome school groups, just as his residency mentor had done.
It was never the right time, though. And since the other dentist was only three years older, he was in no hurry to think about retirement. At one point, the other dentist asked if Dr. Charlie might be interested in a partnership. That’s when Dr. Charlie realized he didn’t want to be a partner — he wanted to be a solo owner. The other dentist wasn’t interested in selling, and Dr. Charlie did not want to start over elsewhere.
He made a good living, provided for his family, and enjoyed his work. As he approached his own retirement, he felt a sense of regret and wondered what might have been.
Dr. Matilda: a perfect associateship that unraveled
Dr. Matilda always knew she wanted to own her own practice. During the 2008 recession, she was a year out of dental school and watched as practice values tumbled. A couple of her braver classmates made the leap to buy successful, well-established practices at a steal.
While she talked about the idea of purchasing, it didn’t feel like the right time. She was still paying off student loans, newly married, and considering children. Besides, her associateship was comfortable — a steady pace, good schedule, nice coworkers. She wasn’t sure she wanted to take on the headaches of ownership.
On the advice of a friend, she spoke with a banker about what it would take to purchase a practice. The banker ran her credit, looked at her finances, and said that she could easily get approved for the type of solo practice she had in mind: 3-4 operatories with room to grow. “You won’t find interest rates like this again, not for a long time,” he urged.
Finding a practice felt daunting, though, so she put it off. And since she didn’t want her great boss to think she might leave, she never mentioned her desire to own.
Three years later, her boss sold the practice and retired immediately. Dr. Matilda’s workload nearly doubled overnight — even though she had a newborn at home. She tried pushing back to her new manager, but couldn’t get the flexibility she needed. She found the banker’s card and called. Yes, she could still buy a practice; however, the market had changed significantly. Interest rates were higher and there weren’t many practices for sale in her area. The ones that came on the market sold quickly, often well above asking price.
What could have been
In both cases, Drs. Charlie and Matilda could have bought much earlier, even soon after graduation.
When Dr. Charlie realized that he truly wanted to be a solo owner, he could have begun to look to buy or start his own practice — even at mid-life. He worried about abandoning the practice, but his colleague would have understood the desire to own and been excited for his friend. While Dr. Charlie would have had to navigate a restrictive covenant clause, he already lived fifteen miles away and could have purchased a practice closer to home.
Meanwhile, Dr. Matilda could have been transparent with her boss about her desire to own someday. A single conversation could have laid the groundwork for a sale that would benefit everyone: the senior dentist could have sold to someone already trusted by patients. Instead, the abrupt sale led to several staff resignations that eventually drove away patients. (See: How to retain staff during a practice transition.)
Alternatively, if Dr. Matilda had purchased when she first considered doing so, she could have paid off her practice loan long before becoming a mother, then had the ultimate in schedule flexibility to raise her young family.