8 Financing Tips To Start Your Dental Practice Right
Starting a dental practice is an expensive and competitive process. Costs of emergency dentist las vegas alone can vary from area to area, as well as the cost of equipment and supplies. And when you’re in the position to start your own practice, there are many decisions that need to be made – such as, how much money will it take? Where should I get funding? What type of financing should I use?
Even if you know what kind of financing you want or need, there’s no guarantee that it’ll be available for you at the time or place that suits your needs. We know what it’s like, so we have put together this list of tips on how you can better think about financing your dental practice!
Important Considerations When Starting Your Dental Practice
Here are some extremely important points to consider before and even while practicing your craft:
Find Out About Different Types of Loans Before Deciding Which One Is Right for You
A loan is the most common way that dentists finance their practices. There are many different types of loans, and each one has its pros and cons. For instance, there’s a loan called a bank line of credit – it allows you to borrow money at any time during the year from your bank whenever you need it. There’s also a type of loan called equipment financing. You pay based on how much equipment you actually use in your practice instead of paying back every month as if it were an actual loan payment.
All these types of loans can be good options for financing your startup dentistry practice. As a general rule, it’s always better to choose loans over selling equity in your practice or taking on investors. You should also always use credit cards when you need something and don’t have the cash – and then pay them off as quickly as possible!
Consider How Much You Can Afford for Equipment and Supplies
Even though most dental practices are run as small businesses, they might not operate like one. One of the biggest expenses is equipment; but before you rush out and buy everything that strikes your fancy even if it seems expensive, consider whether there will be any consequences from buying too much or high-end equipment.
For instance, an X-ray machine costs $50,000 versus another one that costs $25,000 with an extended warranty. While you might think the extra $25,000 is worth it so that you get better results and take less radiation exposure for your patients, if the cheaper machine does exactly what you need it to do then there’s no reason to spend so much money on a single item. Make sure when doing equipment financing that you keep all this in mind!
Learn How Much Debt Is Too Much
We always want more out of life – we want the lifestyle we can afford, not necessarily the one we’re going to end up paying for every month for years into the future. The same concept applies here; just because you can buy everything doesn’t mean that you should or should be able to afford everything. You should never use outside financing to buy things that you wouldn’t be able to pay off with cash even if you had it (or maybe a little bit of money).
If you can’t, then the equipment isn’t worth having or buying – it’ll just end up weighing down your business and keeping you in debt for years to come.
Think About How Much Equity You’re Willing to Give Up
Taking on investors is not always the best solution; often, they don’t add any value whatsoever and actually cause more harm than good. If this happens, then you might have given away a huge chunk of equity (which means giving away ownership over part of the entire business) without getting anything out of it.
This is why it’s important to remember that when you give away equity to a new investor, your sole focus has to be on what they can do for your business. Ask yourself whether their input will truly help the long-term success of your business or whether they’ll just be another distraction.
Remember: The Best Equipment Financing Deals Are Those Which Give You Flexibility
When you’re first starting out, it’s almost always easier to get a small dental office loan. But when you have some income coming in (and start making more), you can use that as leverage so that people will take you more seriously when it comes to your equipment financing deals. The best equipment financing deals are those which let you pay the full amount over 10 years instead of just 2-5 years; this means paying $1,000 per month rather than $500 or less every month.
Make sure not to rush into any contracts and consider how much time and money is needed until everything starts making money – because if something doesn’t make money for four or five years, then chances are that the interest rates on loans might skyrocket so high that you can’t make the original payment amount.
Don’t Give Into Upsells, No Matter How Tempting
Make sure to be an educated consumer when it comes to buying equipment and try to get the best deal on everything; this includes being prepared for financing and not accepting just any offer or loan. Some companies will spring upsells onto you as soon as they hear a price range that you’re comfortable with (such as offering credit insurance for $200 or asking if you want aftercare at close).
If this happens, politely decline all offers – if someone is trying to sell something additional even though you haven’t agreed to purchase the original product yet, then there’s a good chance that it might have been overpriced, to begin with.
Work on Getting More Than Just Financing
Whether you work with a local bank, credit union, or out-of-state lender, it’s important to get your business and personal finances in order before going into any discussion about equipment financing. If anything, this makes them take you more seriously because they can see that you’re well aware of the challenges ahead and have done the necessary due diligence beforehand – plus if possible, try to meet with someone face-to-face instead of communicating through email or phone only!
And if the loan doesn’t end up working out (or if it’s not enough money), then don’t give up; there are still other options available to help you get what you need and keep you on the road to success.
It’s Never Too Early to Start Looking for the Best Equipment Financing Options
When opening a dental practice, you need to get all of your equipment and supplies before you can hire any staff or see your first patient (and if this sounds like it might take over six months then don’t worry – most new dentists will need a good year to prepare anyway).
Even though you might be in no position to finance anything just yet, it’s still important to look around at different options right when you start thinking about becoming a dentist so that by the time it comes time for negotiations with vendors/leasing agents, they won’t try pushing anything unnecessary onto you– if they do offer an upsell, make sure it’s something that you’ll need and not a service/product which might be nice to have but isn’t crucial. You’re the best person to determine what is needed and what isn’t, so don’t let anyone else tell you otherwise!
Conclusion
Fortunately, there are many different financing options to choose from that can help you get your dental practice up and running. Once you have chosen which option is right for yourself as well as collected all of the necessary documentation and completed any pre-qualification requirements, then it should be relatively easy to move forward with finalizing this process!