Wes Read compares buying an existing practice to starting from scratch. Only about 5% of practices are true startups. Buying gives you day-one cash flow and existing patients, but startups won't show profit until late year one and owners should expect no paycheck for two to three years.
About 5% (maybe even less).
Cash flow, patients, and staff already in place.
By the end of the first year (in most cases).
Two to possibly three years.
A few associates.
Consider doing a startup versus buying a practice. I would say in our experience, about 5% of practices, maybe even less, are startups. And startups are not for the faint of heart. You really have to be a go getter and have some fortitude to do it, because just what it's embodied in the name startup. You have to really learn and start everything. You have to hire all the employees, you have to create the systems, you have to build out the office. There's a lot that goes into it. You have to find the patience and keep them happy. You have to find referral sources. Everything is from scratch. So we're going to compare some of the pluses and minuses of buying versus startup today day. So the nice thing about buying practice is on day one, you have cash flow, you have patience, you have staff. Everything's there. Now, it may not be exactly to your specifications or to your liking, but at least you have something to work with and cash flow to cushion you while you.
Fine tune the system to your liking. There's no build out.
The patients are on schedule already. But there are some downsides. Every practice that you possibly could want to buy is going to have some awards. It's either going to have a staff member who's an alpha or even a cabal of staff who are all friends and will try to make demands, or they'll ask for an extra salary. Or you might have some staff who are just on the same retirement timeline as the selling doctor and may leave at the same time or very close thereafter. So there's sometimes some management and leadership things that have to be done right from the outset when you buy a practice. And then you might have to do some visual changes, design changes to the way the office looks, or technology changes to add, you know, cone beam, depending on how you want to practice or technology. There are still a few offices out there whose charts are not digitized by Google, so let's compare that to startup, which of course everything is from the ground up, so you get to do it your way, but you have to do it. And in my experience, you probably won't see any profit until the end of the first year unless you step into this great situation, especially in a more competitive Metro environment.
You should brace yourself though, for not having any real paycheck to yourself for two, possibly even three years. It just depends on you as a leader. The marketplace, the competition.
And so you need to. There's a lot more uncertainty that comes with building out a practice and you have to learn everything you have to hire everyone, so you'd better be pretty strong minded if you do a startup Pros and cons to both.
