As much as no one likes going to the dentist, it is an absolute necessity for good health. One of the key strengths to owning and operating a dental practice is that these businesses are always able to generate high gross margins from their services. Additionally, given the substantial educational requirements and licensing requirements – dental practices enjoy very high barriers to entry. The startup costs associated with this type of business is moderate and usually most practices have a startup cost ranging anywhere from $150,000 to $500,000 depending on the location and the number of dentists that will be employed by the practice at the onset of operations. Almost all financial institutions are willing to provide nearly 100% of the capital needed in order to establish a new dental office or acquire an existing practice. One of the other important strengths for this business is that they are able to generate income from private insurance as well as publicly funded healthcare systems.
For weaknesses, dental practices do have a substantial amount of competition in any given market. There are a number of solo practitioners that usually maintain small practices as well as large group practices at have a number of specialists on the payroll. The ongoing operating expenses of these businesses are relatively high especially as it relates to personnel expenses and malpractice insurance. A dental practice must continually implement new marketing campaigns in order to drive new patients to the practice.
For opportunities, dental practices can expand by hiring additional staff including dental hygienists in order to render a larger amount. Many dental practices will also work with independently contracted specialists including oral surgeons, periodontist, and orthodontist so that a greater degree of services can be rendered to the patient base.
Additionally, some dental practitioners will acquire existing practices in order to have their businesses expand through non-organic means. Again, almost all financial institutions are willing to provide a business loan for the acquisition of an operational and profitable dental practice.
As a relates of threats, beyond competition the other threats faced by the business are downward pressure in regards to insurance reimbursements from both private entities as well as publicly funded healthcare systems. Additionally, issues pertaining to malpractice can always be an issue for a dental practice. As such, comprehensive coverage for these issues should be maintained at all times. Beyond these operating arrests, there are very few threats faced by dental practice given that this is a healthcare related business.