As a buyers’ representative and business coach, I talk to hundreds of doctors a year.  One thing that pains me the most is hearing how dentists delay considering practice ownership earlier in their career, and I will tell you exactly why!

Many desire ownership, yet watch idle by as their friends become owners. They stand by with that persistent thought of maybe I should buy a practice. But they hope and wait till that “perfect” situation presents itself… if it ever does.

My goal in this article is to help docs get off the side line and get in the game. The time for ownership is right now!  Here is why.

#1 MONEY IS EASY TO ACQUIRE AS A DENTIST

As a dental specific banker in my early career, I can tell you interest go up and down. I’ve seen rates as low as sub 6% on 15 year practice loans, the cost of money is relatively cheap for buyers. Banks want to lend to dentists! Turns out historically dentist always pay back their loans! Well 99% of them do.

What does favorable terms and lower rates mean for you starting out?  Lower monthly payments and extra cash flow. Even with practices being priced higher than historical averages, low payments offset the cost to make a purchase affordable. (Of course this varies market to market as well.) Work closely with a buyer representative to discuss the prices of practices in your market.

But the lower monthly payments also allow buyers to consider new equipment, stronger marketing, and even working with consulting services to set them up for long term success. These types of investments help buyers confidently take the leap into ownership!

#2 The Market is STILL GROWING

For over a decade, industry experts have predicted a slowdown of practice sales. Fortunately for roughly 25,000+ graduating dentists every year, this has not been the case.  I predict that in the next 5 years more dentists will put their practices up for sale than ever before. 

Here’s why:

The average age of the baby boomer generation is 62-80 and they become eligible for Normal Retirement Age (NRA) benefits.  As their retirement benefits start to gain monumental status in their accounts, many will consider selling their successful practices, for a small piece of mind.

Not only that, the dental business game has changed. It’s much more competitive and requires much more administrative oversight. Dentists of the past never have had to adjust to meet the thinning margins. They are getting out of the game because the burden is more challenging than it used to be (from their perspective). But new comers with fresh blood and new technology can take the market by storm.

Secondly, the stock market is at an all-time high. Last month the market hit another peak, as investors focus on the progress of the U.S.-China trade talks. Overall the Federal Reserve is upbeat and continues to keep interest rates low. For those retiring baby boomers, this means they can comfortably retire with the nest egg they have, not feel pressured to keep working.

#3 TIME is valuable

I think everyone knows by now, investments over the long term will yield more than large investments over the short term.  In short, time is on your side.  Working as an associate definitely has some benefits. But the opportunity for owners that younger dentists have in front of them is difficult to quantify.

Just like a mutual fund or a piece of property, dental offices have real value.  When my clients choose ownership, they are not only benefiting paycheck to paycheck, but they are also building real value in an asset to sell in the future. That is where the real payout occurs.

I recently had coffee with a dentist who is an old friend. In 2012, when I first met her, she was considering buying an office. I remember the first practice she looked at: it was in a desirable location, the equipment was in good shape and the financials were average.  Despite my recommendation to buy, she ultimately passed on the opportunity.

When we sat down, she was so excited to tell me that she just received news of an accepted letter of intent to purchase her first practice.  While I’m excited for her, the delay of 8 years got me thinking.  If she had purchased in 2012, by now her initial loan would have likely been paid off and her business would most likely have surpassed a million in revenue. 

She lost eight years of income and equity over trying to find “the perfect practice.”

#4 BUILD THAT LEGACY

If you approach ownership as an opportunity to invest in yourself and your future, you can end up in a great spot when it comes to retirement. Just like the baby boomers. Yes running a business these days is not easier. But nothing worth anything is easy to come. When working with a buyer’s rep like me or a practice management consultant to optimize your business practices, you can easily run a 2-3 million dollar practice.

Sometimes the average associate struggles, bouncing around from office to office juggling two to three associate positions. For all that hard work, their income ranges anywhere from $120,000 to $150,000 per year and they have less than $25,000 dollars in savings.  When you get tired of making money for someone else, claim a stake for yourself, get started sooner than later.

Becoming an owner is daunting, but the statistics speak for themselves. Default rates remain lower than ever in this industry. The money is right, the market is primed, and time is ticking. Reach out to discuss your next move. I would be honored to help you make the best decision for your future and legacy!