So you’ve decided to make the leap to practice ownership.  Congratulations – you’re in for a life transforming experience!  But before jumping in, be sure that you’ve done everything possible to lay the groundwork for a successful transition. The key to building a thriving practice is being prepared on many levels – financially to be sure, but above all psychologically, with a winning attitude and frame of mind.  The following recommendations will help you determine how prepared you truly are for ownership success.

Build Your Financial Profile

Take advantage of your time as an associate to build your financial profile so it’s as easy as possible to obtain a practice acquisition or start-up loan.  Lenders will review both your liquidity and overall net worth to determine your loan amount and interest rate.  Improve your credit rating and build your personal assets to become more attractive to lenders and ensure the best rates possible. 

Also, do your homework to ensure you have a good grasp of all of the potential costs involved in owning a practice.  This means working with a CPA to outline as many financial details as possible to minimize unanticipated costs during your transition period.

Be Prepared for Hard Work

Make that, very hard work for a period of time.  Practice acquisitions may require up to an 18-month transition period, while start-ups often require two to five years to grow a full patient base.  During this time, you will likely be working long hours as you make multiple design and purchase decisions, interview existing or potential employees, initiate customer tracking and office systems, update or purchase equipment, get to know or acquire patients, and conduct marketing activities. You can make it work if you have the ability to face adversity and find solutions – and have a great team behind you. 

Develop Characteristics of Success

We’ve found there are six key characteristics of success that help to ensure not only professional achievement, but personal satisfaction in transitioning to practice ownership.  How many of these characteristics do you possess?

  1. Business Management Skills.  Are you prepared to perform beyond your technical skills to become an excellent business manager, understanding “P&L”, managing cash flow, and developing a marketing plan for attracting and retaining patients?
  2. Strong Leadership Skills.  Do you have a compelling vision for your practice that you can communicate to your staff and patients? 
  3. Goal Oriented.  Are you inclined to set achievable goals and create systems for measuring progress along the way? 
  4. Excellent People Skills.  Do you have a high level of Emotional Intelligence – the ability to be self-aware and to manage emotions (both yours and others’), empathy for others, skill in handling relationships, and the ability to face adversity? 
  5. Team Player.  Are you prepared to pull together a professional transition team that may include your lender, management consultant, CPA, lawyer, project manager and equipment vendor?
  6. Well-Balanced.  Are you able to lead a balanced life?  Do you have strong ties to family and friends?  Do you exercise and take care of your health, including your mental health?

The real secret to ensuring a successful practice transition is maintaining a positive and healthy frame of mind.  Regardless of your financial footing or potential for hard work, if you possess the key characteristics of success and a winning attitude, you’ll be well positioned for a profitable transition to ownership. 

Excerpted from “Associateship or Ownership: Making the Choice That’s Right for You,” Copyright 2006 PennWell Corporation. Reprinted with permission from PennWell Corporation and Dental Economics.

Statements of opinion not necessarily endorsed by ADA Member Advantage, ADA Business Enterprises, Inc., or the American Dental Association, or any of its subsidiaries, counsels, commissions, or agencies.