Building a Dental Empire starts with Mac n Cheese
“It is always cheaper to do the job right the first time.”
The last several years have been spent paying off that large student loan.
It’s been hell, and the taste of macaroni and cheese is stale in your mouth. Driving that beater and sliding around in the winter months with the “all season tires” that needed replacement so badly.
FINALLY, you see the end is near. You took an associate position straight out of school. The promise of a six figure job meant the loan started to disappear and it seemed like you could get credit almost everywhere with that new piece of paper….
Should you take advantage?
It’s SOOO tempting to go out and trade that car out for a shiny and fast new European model. You are a dentist after all, and this is what your dentist family is driving! You deserve this!
The bank is more than willing to finance you.
Is this the smartest move you can make?
If you really got into this profession to earn a decent living and enjoy a lifestyle – then it’s important to know your personal life goals. What’s really changed in our business in the last 30 years is access to credit. It’s good….and it’s bad.
The credit issue is a different thing. However, most consultants talking about opening a clinic have little experience with EVERYTHING DENTAL. They may know how to open a cheap clinic, or they may be rock star salesmen and consultants that can sell underwear to a nudist! To me the first step is coaching.
Do you want to own your own clinic and why?
Are you prepared to do what it takes?
Will you pay a premium for goodwill, or decide you can open your own?
Do you understand business and how to value a dental business?
Are you better to work for someone than to own?
If you want lifestyle TOMORROW then DO NOT open a clinic. Not unless you have no fear of debt. You can finance a lifestyle, but this will not create true wealth. You will simply be working for “your mortgage”.
Nobody can afford to buy a clinic
As corporations have started to finally add the proper values to what I consider a good and safe investment, understanding the business of dentistry has never been more critical.
Depending where you are – clinic values still range. Companies that are buying clinics in Canada are focused on the established name brands with excellent free cash. Basically – the cream of the crop businesses that have figured out the profitability of the business. If you want to monopolize an industry – buy all the businesses that are already profitable. The ones with a track record and “brand”. Offer them more than what was an established “market price” and ask them to be partners with you….
What has happened has made it more difficult for entrepreneurs to buy a clinic. MOSTLY because practice values were driven by an industry that did not focus on the business…it was only a focus on health care. This is GREAT!! The multiples paid in the past were based on less profit driven models. Higher overhead and owner operated businesses may not generate much free cash – but they possibly may create a superior product.
A model in between is a goal. It’s TIMEfactors.
The issue I have seen is that NOBODY has focused on training young dentists the business of dentistry. A VITAL component in order to compete in a modern world.
The trend that has been influencing the trend towards corporate health care is driven by this fact. ALL of healthcare as a matter of fact.
What I see is a high student debt, and a generation with a new set of values.
It’s not just about buying a clinic at 100% bank financing…it’s not easy! Period!
Especially if you came out of school and then saddled yourself with more debt. Started a family you need to provide for. Bought a home that eats 30% of your earnings, and a vehicle that is now as much as your student debt loan. How can you possibly afford to buy a dental clinic without TAKE HOME cash?
Right out of school, be prepared to work your ass off. In consulting potential business owners – I ask if they are prepared to learn business. The challenges and the rewards. To be ready to take the lump sum of their investment in a decade from now. Be prepared to live the next several years as if they were still in school?
Prepare to eat the mac and cheese!
If you are ready to do this….you may be ready to build an empire.