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    4 things you need to do before expanding your practice

    Expanding into a multi-location is every bit as challenging as it sounds, so preparation is key.

     

    Finanes

    Get your finances in order

    Money, of course, matters, and aspiring DSO owners need to know where that money is coming from – and where it will go.

    “Most dentists have no idea how to do a budget,” Dr. Levin says. “They get with their accountants at the end of the year, they barely look at it, all they worry about is, ‘How did my income play out?’ ‘How is my overhead?’ So, in this case, you need a real financial plan, as part of your strategic plan, with projections and budgets that you can measure against.”

    Related reading: Why a marketing strategy is crucial for your practice

    Unless money is not an issue (most likely it will be), Dr. Levin says that doctors must identify where funding will come from.

    “Most dentists don’t come from well-to-do parents, and nobody else is racing to give them money,” he says. “Where are they going to get capital? Are they going to have investors? Are they going to have partners? Are they going to give up stock? Are they going to borrow from a bank? Are they going to try to go to private equity when they get large enough? But at some point, you’re going to get capital to function.

    “Dentistry has been lucky so far,” he continues. “Many of these small groups, at some point, are going to run into financial trouble, and when that happens, that’s just normal business. You need capital and a line of credit.”

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    Robert Elsenpeter
    Robert Elsenpeter is a freelance writer and frequent contributor to Dental Products Report and Digital Esthetics. He is also the author ...

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