When it comes to starting your own dental practice, finding the right real estate is a crucial step to success.
Where do you even start looking? How different is dental practice real estate from commercial? What should you be looking for?
And don’t forget about the great leasing vs. owning debate. Some dentists argue owning your practice’s real estate is best, and some argue leasing is best.
I’m here to break down the pros and cons of leasing vs. owning real estate for your dental startup, AND share the 4 concepts you need to know about startup real estate before you make your decision!
1. Abundance and Economics
There’s two key pieces of information to make note of when evaluating leasing vs. owning your dental startup real estate: abundance and economics.
What do these terms really mean for your startup? Let’s break it down.
Abundance = how many leases vs. purchasing options are available for your dental practice. You’ll need to examine the area and determine which route gives you greater options. More often than not, you’ll have greater options if you go with the leasing route due to the abundance of leases available. Abundance really means availability.
You want to have the most options available to you so that when you make your choice, it’s out of preference, not default.
Economics have to be considered in leasing vs. owning your startup space. So let’s break down the math…
When you lease your real estate, you’ll most likely have to pay 1-2 months of rent upfront. If you do things the right way, you can likely be granted Tenant Improvement Allowance from your landlord. Put simply, “TI allowance” means your landlord will help subsidize your construction costs for the project, making your out of pocket expenses even more minimal.
On the other hand, when you purchase your startup real estate, you’ll likely have to put 10-20% down right away. This type of spending can impact your personal financial decisions, such as purchasing a home.
It all comes down to determining which is best for the future of your practice: leasing or owning.
Our golden rule: If you find yourself having to sacrifice elements of your dental practice dream just to say you own it, take a look into leasing!
2. Say no to Realtor.com (and other commercial real estate sites)
Listen, I bought my house using realtor.com, but commercial real estate and dental startup real estate are two totally different playing fields.
Don’t expect a site meant for commercial or residential real estate to help you choose dental practice real estate! What you need is proper representation.
While it may be tempting to have a “do-it-yourself” attitude, real estate is not the area to DIY! When you work with someone who’s negotiated business real estate for a living, you’ll hands-down get a better deal than if you went into it alone.
You need specific elements to fit and accommodate your needs, so don’t leave it up to chance, and don’t expect yourself to know everything. Find proper representation, and make sure you’re getting the best deal you can!
3. Size is a Balancing Act
When it comes to the size of your dental real estate, balance is your best friend!
I’ve seen the “tiny home” trend start to trickle over into dental practices, or “tiny practices.” I’ve just gotta say… bad idea! Getting a small practice now may seem like a cost-efficient idea, but it’ll end up costing you in the long run.
If you go too small, you’re giving yourself and your business no room for growth. What happens in the future when you want to add more assistants? More hygienists? More patients?
Make sure you choose a space that can handle the growth of your business in the future.
However, don’t go overboard with the biggest space you can find! Maximization of space is important, and there are tons of efficient ways to work with the space you have. You never want to sacrifice being able to sustain your business and your patients just to have a big space.
Like I said, balance is key! Make sure you’re not choosing a tiny practice that will challenge your growth and productivity, and don’t be “practiced poor” by choosing a huge practice that costs a fortune in rent and real estate costs!
4. Avoid Pretty Buildings & Big Signage
Don’t let the pretty buildings and big signage fool you… nice aesthetics doesn’t equal a successful startup!
Let’s think about Starbucks as a business.
When you think of Starbucks, you think of the coffee, the big, green signs and the locations that always seem to be right at the front of your mind – right off the interstate, right on the street corner, right where you need it to be!
This is a great tactic for businesses like Starbucks, but your dental practice isn’t the same. Businesses like this thrive off of instant gratification like coffee, and they need to be at the front of your mind for you to want that gratification.
A business like a dental practice, on the other hand, doesn’t need to be on street corners. You’re in a totally different industry, which means you can spend your money on bigger things than a pretty building with big signs!
Instead, find a building with the right size that fits your vision and ensures economic growth, and use your money to market your business. Good marketing means your building doesn’t have to be on display!
Is Leasing or Owning Right for You?
In the end, what’s most important is that you’re doing what’s best for you and your startup practice.
I hope these tips and concepts have helped you gain greater clarity into the basics of dental practice real estate, and I hope you feel more equipped to make the right decision.
Ready to learn more about how to successfully launch your startup dental practice?
Join me, the experts and 24 doctors at this year’s Startup Practice Blueprint. We only have a handful of seats leftCheck out our reviews at Amazon!