So you’ve built a successful and thriving dental practice that proudly serves the members of your community. Congratulations— that’s no easy feat!
However, you might be reaching your limit on the number of people you can serve and the capabilities of your office. Sure, you’ve considered expanding your practice and adding a new office. But knowing when to expand and whether or not it’s truly right for your business isn’t always clear. We have some helpful tips to help you decide, as well as some financing options that can help make expansion possible.
Knowing When to Expand Your Dental Practice
You might be debating whether or not expanding your practice makes sense right now. Here are a few indicators that your business might be ready for a new era of growth:
- Your practice is bringing in steady profits, and you have a substantial amount of working capital.
- You’ve looked at the numbers and your practice has experienced consistent year-over-year growth for multiple years.
- Your office has loyal patients who have stayed with you over the years.
- You are continuing to gain more patients— almost more than you can realistically take on.
- You currently co-own your practice with another dentist, you have another dentist working for you, or you’re in the negotiation stages with an additional dentist.
Simply put, if your business is doing well and you have the bandwidth to take on even more, expansion may be the move for you.
Pros and Cons of Expanding Your Private Dental Practice
Adding another office isn’t always easy, so you want to be sure you are aware of the pros and cons before you dive in.
Retain your existing patients. If your existing office is stretched thin and patients have to wait a while to schedule an appointment, they may end up taking their business elsewhere. Expanding to a new office allows you to keep your existing patients without overloading your staff and yourself.
You’ll need to add to your staff. Opening a new office means bringing on and training new staff. Getting everyone hired, onboarded, and trained to your office’s standards can take some time.
You may also have to lend current members of your staff to help out with that process.
Attract new patients. An additional practice will not only give you more opportunities to serve your existing patients, but you’ll also be able to reach new ones. You’ll have the capacity to take on new patients who may be in your location’s new area.
You will need more equipment and office space. Opening a new office means finding the real estate to put it in. You’ll also need to pay for the equipment, furniture, and office supplies that’ll get that office up and running.
You can offer new services. More space may allow you to expand your office’s offerings. For example, you may now have room for specialty equipment that you didn’t have room for before. This can keep your practice on the cutting edge.
You’ll have more to manage. While there are numerous advantages of growing your practice, it is ultimately more responsibility.
More money-making opportunities. When you open a new office, you increase the number of patients your business can see in one day— increasing your overall bottom line.
Dental Practice Loans
You don’t have to have all of your funding in cash—financing is a great way to make sure you don’t stretch yourself too thin. Here are some options that may be available to your practice.
Commercial Real Estate Loans
A commercial real estate loan can be used to purchase new office space for your practice. These loans function similarly to a home mortgage that an individual would take out. However, instead of looking at your personal finances, the lender will want to know everything about your business, including your current books and plans for the new office.
Many times, local lenders can customize these loans to your needs. It’s just one of the ways using a local financial institution can help a small business.
Other Commercial Loans
You’ll likely have expenses when opening another office that extend beyond the office itself, especially in the early days when business is just picking up. The following loans may be beneficial for covering your other needs:
- Business line of credit: A business line of credit functions similarly to a credit card. Though you’ll be preapproved for a certain amount, you can borrow how much you need, when you need. The best part is, you’ll only pay interest on what you actually borrow, not the entire amount. This type of loan is great for expenses that may pop up here and there while your new office gets up and running.
- Equipment financing: Need to purchase expensive equipment for the new office? Equipment financing can give you the funds to buy what you need.
- Term loan: Think of a term loan as the commercial version of a personal loan. There are no restrictions for what these funds can be used for, so it can be great to have on hand if you think you may need money to cover day-to-day operations. These are usually fixed-rate and paid back over a set period of time.
- SBA loan: The United States Small Business Administration offers three types of loans for small businesses. The SBA 7(a) loan can be used for anything from short- and long-term working capital, real estate, and refinancing other debt. SBA 504 loans, on the other hand, are designed for major fixed assets such as a new office. The last loan offering, the SBA microloan, is designed to give businesses a small boost (with a maximum amount of $50,000) to start up and expand.
All of these loan offerings are meant to help meet the needs of small businesses that are just starting or taking on new challenges with expansion.
Reach New Heights with Amplify
Adding another office to your dental practice can allow your business to reach new heights. A new office will allow your practice to help even more people in your community, along with your existing loyal customers. Expansion may not always be possible with the cash you have on hand, but with small business loans designed for your dental office, you can pay for the new office now and pay it back over time.