When you enter the dental profession, you have many career options, including joining an existing practice or establishing a new practice.
Establishing a new practice is a significant step in the career of any dentist. Doing so allows you to avoid many of the complications inherent in other options but requires attention to detail in areas such as:
- Supply and space procurement
Starting a practice requires analysis of both revenue and expenses for at least the first two to three years. Keep in mind that expenses are much easier to predict than revenue. When starting your own practice, you may also consider associating part-time with another practice in order to support yourself as your own practice grows and becomes established.
Purchasing a practice provides you with an immediate patient base, staff and practice facility. The economic costs and benefits are generally weighed against alternative options such as establishing a practice. If you purchase a practice, your primary consideration should be ensuring that you receive what you pay for, including tangible assets such as dental equipment and office supplies, as well as intangible assets such as goodwill and the patient and/or referral source base. Although never a certainty, strive to ascertain that the patient and/or referral source base will remain with the practice after its purchase.
Associating with an existing practice offers you employment and the opportunity to learn and grow professionally. If you seek to attain practice ownership through association, you need to make the effort to locate and associate with a practice that you wish to own. Locating the right practice is not an easy task, and the more effort you put into the process, the better your chances of success. Prior to commencing the associate period, you should be asked to review and sign an associate employment agreement. To minimize the risk of misunderstandings, any potential for ownership should be outlined in a non-binding letter that sets the general parameters, terms and conditions of both the associate arrangement and future ownership in the practice.
Keep in mind that as an associate, you are likely an employee, not an independent contractor. Government agencies will classify your relationship with the practice based not on what you call yourself, but factors such as tax withholding, benefits, investment in the practice and autonomy. Misclassification can be costly for both you and the employer.
Whether you elect to join an existing practice or establish a new one, planning ahead and knowing the right questions to ask will pay off in the long run.
A new, free e-book available from the ADA Center for Professional Success, Joining and Leaving the Dental Practice (3rd ed.), by William P. Prescott, Esq., EMBA, educates dental professionals on important business, legal and tax planning issues of practice entry.
This content is sponsored and does not necessarily reflect the views of ASDA.