Did you know that the average dentist earns around $100,000 a year? That number actually jumps up to nearly $200,000 annually for specialists like orthodontists. While these numbers are pretty impressive (given that the median household income in the US is $50,000) they barely scrape the surface of what dentists who own their own practices can make.
Dentists, unlike medical doctors, have almost unlimited opportunities to earn a very nice living because they don’t require the same massive infrastructure as their hospital-bound counterparts. But that doesn’t mean that starting a practice from scratch is easy.
The biggest challenge in getting to this income opportunity, besides completing dental school, is actually getting a dental practice, or any business for that matter, off the ground is establishing a solid customer base. That’s why plenty of young dentists purchase existing practices from older dentists who are ready to retire.
If you’re a recent dental school grad who is considering this route, here are three questions you should definitely be asking before signing on the dotted line.
Can I see the Books? (All of the Books)
The devil is in the details and, when it comes to establishing a business, those details are in the accounting books. That’s why anyone who is considering purchasing an established dental practice needs to take a close look at all of the business records the practice has.
Make no mistake about what this process is going to be like, because there’s nothing fun about it. At the same time, a comprehensive look at the accounting records of your potential purchase can reveal plenty about what you can expect to earn, and pay, once the practice becomes yours.
A close examination of the books can also establish whether you’re paying a fair price for the practice or not. So if you’re not comfortable doing this task on your own, we strongly suggest finding an account or financial manager who can do it for you.
When it comes time for the dental practice appraisal you’ll know that you’re getting your money’s worth if you know what the books look like.
Check the building itself
Before buying you own practice make sure you check the building for any repairs. This will help save you money on repairs in the future. Have the exterior checked and inspected by professional contractors.
What are the Demographics Like?
The next question you’ll want to ask is, “What are the demographics of the neighborhood like?” This is an incredibly important question that the existing owner of the practice probably hasn’t thought much about.
After all, why would someone who is stepping out the door be thinking about his or her future customers? For the prospective buyer, however, demographics are a pretty big deal because they give a pretty good indicator of what your future there is going to look like.
If you’re in a neighborhood that’s rapidly gentrifying and filling with families, you’ll probably do better than if you moved into a neighborhood that was full of twenty-something and recent college grads.
Spending some time understanding neighborhood demographics can go a long ways towards establishing a thriving dental practice.
If you really do your homework and ask the right questions, you should have no problem finding an established dental practice to make your own.