Starting vs Buying a Dental Practice

Starting vs Buying A Dental Practice

ADS brokers help you find the right path and avoid costly mistakes.

Should You Purchase an Existing Practice or Invest in Starting Up Your Own Practice From Scratch?

Many recent dental graduates have thought about whether to join or purchase an existing practice or start a new practice from ground zero. There are a lot of factors that must be considered when deciding the best road to take. There are benefits to both strategies, but each strategy must be approached with caution to avoid financial ruin.

It is important to note that many start-up practices fail due to undercapitalization or because new doctors struggle to build cash flow while battling location or economic hardships. Additionally, without consistent patient flow it becomes difficult to build management skills and make sound business decisions. Business ownership takes experience; missteps and miscalculations can be devastating. While success is certainly attainable, the path to having to close your doors prematurely is only accelerated by poor planning, flawed strategy and uninformed decision making.

Here are some general pros and cons to think about while deciding whether to start your own practice versus purchasing an existing practice.

Pros and Cons

  1. Gain Experience or Use Existing Experience
    People with little business knowledge may have a better experience purchasing an existing business or franchise than someone with extensive knowledge of running a business. Typically, pre-existing businesses have an existing infrastructure that may include ordering procedures or inventory systems. Some pre-existing businesses will provide business owners with vendor lists and established relationships or payroll software and processes. Pre-existing businesses help people gain skills that can be used in other businesses.
  2. Establish a Unique Brand Image or Take the Safe Route
    People who need to establish a unique brand may need a start-up as opposed to a pre-existing business. When business people buy pre-existing businesses, they are buying into someone else's concept and vision. With a startup, procedures, goals, and marketing can be established. People with unique visions that want to be recognized for it will probably be more fulfilled with a start-up business.
  3. Choose a Dental Strategy to Ensure Profitability
    A pre-existing practice will have a profit and loss sheet to review. When a practice is already profitable, it is easier to plan for expansion or to ask for money to help develop an existing product. Every new business person should consider purchasing an existing business for this reason because a start-up may not be profitable in the first year, but an existing business might be.
  4. Choose a Business Strategy to Make Borrowing Easier
    Lenders are more likely to loan business owners money if they can prove that the business has been profitable in the past. Start ups can provide sales projections only. These numbers may or may not be achievable. Lenders prefer not to invest or lend based upon speculations. Existing businesses are preferred for borrowing money.

Launching a start-up versus purchasing an existing business is a personal preference. Make the decision based up your personal restrictions, and you will have a better experience. An experienced ADS specialist can help you avoid these costly mistakes and guide you along either path you choose to take.

Should I start up a new practice or purchase an existing one?


Whether you're buying your first dental practice, planning for retirement, or making a lateral shift in the middle of your career, we have the experience to help.

Contact ADS Transitions Specialist