Relax. We're here with everything you need to know about hanging your own shingle.
Heading out on your own and starting your own dental practice is daunting. So much to worry about. Where will the money come from? How do I get new patients? How do I pick the right location?
Relax, we're here to help.
Explore Your Funding Options
Few people have enough money to start a dental practice without help, so you should spend some time exploring funding options that will help you succeed.
Getting a business loan is the most common way to pay for the real estate, equipment, supplies, and personnel you’ll need. You should talk to several lenders to find the most affordable option. Interest rates can differ significantly from lender to lender.
Keep in mind that every interest point matters. If you borrow $500,000 with a 6%, 6-year loan, you’ll repay about $9,666 per month ($579,984 overall). Just one percentage point more will raise your monthly payment to about $9,900 ($594,036 overall). By the time you finish repaying the loan, that point will cost you over $14,000.
Take Advantage of Tax Deductions
You can qualify for exceptional tax benefits when you start your own dental practice. Section 179, one of the most useful options for new business owners, makes it possible for you to deduct the cost of equipment in one year instead of spreading out the cost over several years.
Under Section 179, you get to deduct up to $500,000 of what you spend on furniture, equipment, computer software, and many other types of tangible personal property. This helps make your initial investment more affordable by lowering your tax burden.
My company, HZP, offers a host of services and options for start-up practices. Having a dental financial expert and business advisor in your corner will save you thousands, help you get running optimally quickly, and help you make choices that can minimize your tax liability.
Get More Out of Your Marketing Budget
Chances are, any place you open a new practice these days is going to have some competition nearby. New dental practices need to be intentional with their marketing strategies. Typically, you’ll want to spend around 8% of your collections on marketing. If you can’t afford a large marketing budget, then you should focus on an option that will give you a high return on your investment.
Some of the most successful marketing channels are e-mail, social media, mobile devices, and search engines. You may find that you can reach your audience effectively through Facebook ads, Twitter posts, and paid ads on Google.
Depending on your target demographic and geographic region, you may also want to invest in traditional marketing that reaches people via print ads and mailing campaigns. Electronic marketing, however, plays a key role in the success of most businesses. It’s also an affordable option with costs you can control easily. Plus, it can really expand your reach very quickly!
Don’t be nervous when venturing out on your own. You’re a specialist with a skill set that is very much in demand! And of course, make sure you have a good CPA firm who has your back—we make sure our clients know we are here to help every step of the way. Good luck and go for it!
Editor's note: Visit the Dental CPA Blog home on DentistryIQ here and the DentistryIQ blog home here.
Andrew Hinrichs, CPA, is a partner at HinrichsZenk+Pesavento (HZP), a dental CPA firm. Located in the suburbs of Chicago and Kansas City, HZP works with dentists around the country. HZP is growing, thanks to its extensive knowledge of the dental industry, focused client service, and ability to help dentists make educated decisions in every financial area of their dental practices. Tax planning opportunities, practice growth, and creative retirement planning are key focus areas. To set up a consultation with an HZP advisor, call (913) 681-1350.
