Owning your own dental practice can create an opportunity to reach even greater autonomy by becoming more involved in patient care decisions and setting your own work schedule.
If you’re mulling over the question of whether to acquire a practice, be it buying into a (group) practice or buying out another practice, you’re already at an advantage by considering your options. But the logistics of practice management can be intricate and diverse. Here are some of the pros and cons of dental practice acquisition — and how to begin the process of owning your own practice.
Buy-in Versus Buy-out
Buy-ins and buy-outs are two types of acquisitions available to you. Dental practice transitions are not one-size-fits-all endeavors, so you’ll want to understand the differences between the two as you assess both your career goals and financial needs.
- Buy-in: Buying into an existing practice
- Buy-out: Buying out an existing practice
Diving Deeper Into Buy-ins
Buy-ins are a tried-and-true choice if you're looking to adjust the timeline and setup needed to meet your career and financial goals. The phases of a buy-in could look like:
- Beginning (associateship)
- Middle (partnership)
- Final phase, where the buy-in becomes a buy-out (and the former dentist departs)
If you value a mentorship opportunity, this model could be a good fit for you. Alternatively, you could buy into a group practice without a final phase — but with the expectation of partnership. This is a reliable option for dentists who want flexibility in their practice, as well as the ability to share risk and/or responsibilities with other dentists or partners.
Some cons of the buy-in become apparent when looking at the flipside. A group practice means some trade-offs. Sharing risks and responsibilities means sharing decisions and possibly being overridden. Depending on your personality, sharing decisions could feel like choices are limited, or it could be a great opportunity to delegate.
Interpersonal dynamics can be another challenge of buy-ins. Like with any business partnership, a buy-in requires all partners to strive for a compatible working relationship across not only escalating tasks and responsibilities but also financial responsibilities, such as a down payment and taxes. As such, you’ll want to have a good sense of your own values and personal factors as you begin to explore your options.
Diving Deeper into Buy-outs
The logistics of starting a new practice are complex and varied. Dentists starting a new practice are establishing themselves and building a practice from scratch. From the practicalities of finding a location and furnishing it to drumming up a customer base, such an enterprise can be time-consuming and costly.
A buy-out means a dentist purchases an established practice, which comes with a built-in pool of patients, so it's an advantage over starting a new practice in some ways. By purchasing an existing practice, a new dentist is purchasing an income stream — something with current and future value — from a departing dentist.
A buy-out is a great option if you feel prepared to navigate a higher level of risk and responsibility yourself without the headache of starting something completely new. An obvious downside to a buy-out is that with all the decision-making power comes all the responsibility — as the practitioner of the business's finances, reputation, and other factors.
Thinking It Through
Whether you choose a buy-in or buy-out, the decision to become an owner entails some serious soul-searching. Becoming a practice owner is a long-term undertaking — one that many dentists say is truly rewarding — so it's important that you have the personal and financial bandwidth to take on your career goals.
Ready to learn more about dental practice acquisition? Check out the other articles in the series:
Ins and Outs of a Dental Practice Acquisition: Finding a Practice for Sale
Ins and Outs of a Dental Practice Acquisition: Establishing Practice Value
Ins and Outs of a Dental Practice Acquisition: Understand Finance Options