A dental practice can be a lucrative business, but it also requires significant investments. Learn what it takes and what it costs to start your own dental clinic and maybe open one soon.
Depending on the location and the amount of work and remodeling you’ll need to do, fixing up your clinic can cost NZ$350,000 to NZ$600,000. This would go into general repairs, flooring, room dividers, and various other details that you’ll need to run your clinic. The numbers can seem high, but they represent the cost of a 3-chair clinic that can average around 1,500 patients a year. You can reduce the cost by buying into an existing practice, but it can also limit your options. Check into why the former owner of the business is selling it and look for potential weaknesses in either the location or the existing market. You can also opt for a smaller clinic. It would cost less, but fewer chairs will also decrease the revenue stream.
From the small dental sterilization machine to the costly x-ray machine, dental equipment can cost a pretty penny. Expect to pay another NZ$300,000 for hardware, software, and dental supplies. Costs can even go higher if you want to upgrade to the latest technology, such as dental 3D printers (an additional NZ$10,000) or dental lasers (NZ$8,000-NZ$70,000). You can curtail the costs by buying used equipment, but you might end up spending more on maintenance compared to purchasing new equipment. Depending on your clientele, spending more on equipment can also increase your revenue. Satisfied clients — especially wealthy and connected ones — are more valuable than any form of advertising.
You’ll have to decide whether to hire dentists or partner up with them. The average dental clinic earns close to NZ$800,000 annually. You can determine if you want to hire new dentists or open up your practice for extended leases. If you’re going at it solo, you’ll need to hire dentists and assistants. Dentists demand wages ranging from NZ$65,000 – NZ$180,000. You’ll also need to hire a receptionist and two to three dental assistants for another NZ$100,000-NZ$120,000. Only partner-up with peers that you know extensively. A dentist with issues can severely damage the reputation of your practice — sometimes permanently.
How to Get Funding
If you can’t come up with the money, you’ll need to find investors or apply for a loan. Dental clinics are active businesses, and you can usually recoup your initial investment in just 2-3 years. Bear in mind the interest rates when applying for a loan. A reasonable interest rate should be your biggest priority and not the amount the bank is willing to shell out. Make a proper business plan that you can present to potential investors — stating where the money will go as well as expected returns. Try to keep it within the family, but take their investments seriously.
Most dentists dream of having their own practice. The cost of running your private practice can be a bit high, but the returns more than outweigh the initial investments.