With the issues of patient access to dentistry showing no signs of resolving themselves, could now be the time to consider opening a squat practice? Is it a realistic option for dentists to own their own practice? Mike Blenkharn of UNW, and dental business coach, Chris Barrow, discussed this topic during a session recently at the British Dental Conference and Dentistry Show, hosted by Practice Plan Sales and Marketing Director, Nigel Jones.
Nigel Jones: Reports of dental deserts and DIY dentistry continue to appear in the media. What would be your advice to someone who's looking to build a squat and who has a vision to try and get all the pieces into place before you open? With some of the corporates looking to sell some of their practices, is it better to buy an existing practice instead?
Chris Barrow: Go for a squat. I have a client who opened a squat practice which is now turning over £1m after a very short time of trading. I started working with him about nine months before they opened the door and he's now about 10 months in and it's doing brilliantly.
The same client contacted me recently and asked if he should buy one of the BUPA practices that’s up for sale near him. The practice was losing £30,000 a year but was for sale at a low price, only £120,000. My response was: “Why would you buy a failure off BUPA when you can spend the money on building either a squat or expanding your existing practice?” It’s not a good idea.
NJ: Squat practices really seem to be gaining in popularity. I was chatting to someone recently who's opened three squats this year and they're all flying. And I was also talking to a dentist in Scotland a month or so ago who feels trapped where he is. And he was saying if I were a bit younger, I'd go and open a private squat. Well, actually the way it’s looking, he is young enough to open up a private squat and do well. What are your thoughts, Chris?
CB: The smart thing to do in these circumstances is to recruit a young dentist a couple of years out of foundation training, and you take them on a salaried basis four days a week in their own surgery, and one day a week shadowing you. You run things like that for two or three years and then say to them: “If you want to buy a squat, why don't I co-own it with you?” So that you set up a satellite funded by you both where you split the equity between you. That way, you’re building a micro corporate with somebody else in all the satellites who's got skin in the game. It’s a great model.
This is the best moment in history for independently owned private dental practices that I've seen in a quarter of a century. Don't miss the boat.
Mike Blenkharn: Squats really are gaining popularity. One of the best things about a squat is you're not paying for goodwill; you're generating your own goodwill. So, you don't have the debt that goes alongside it. But to echo what Chris has said, I had a meeting with a client this week and they’re in their second year of a squat practice in Newcastle. And they're reducing their days because they've just had an explosion of activity. From about month two onwards though, it was profit making, that's how quick it was. And a final point as well on that, in the last 18 months, I've never had more enquiries about squat practices in the last 15 years. It's incredible the number of people interested in opening a squat.
CB: It stands to reason because young dentists who want to go into ownership can't afford to buy a £1.5m practice. So, if we want these young dentists to come into ownership, then opening their own practice is exactly the right thing to be doing.
NJ: It's one of the things that I'm really enjoying watching at the moment because, pre pandemic, I was wondering what the picture for practice ownership was going to shape up to be over the next decade. It's moving in a really positive direction. I've been contacted over the last couple of weekends by two people that I never thought would think about owning their own practice, who now are really enthusiastic about it.
I’ll be interested to see how things pan out. Thank you for your contributions.
If you’d like to work with a membership plan provider who thinks about your needs and supports your business, helping you to find solutions to the things that matter in practice, why not have a chat with Practice Plan on 01691 684165 or visit practiceplan.co.uk to find out how easy it is to join the Practice Plan family.
About Nigel
Nigel Jones is Sales and Marketing Director at Practice Plan and has been working in the dental sector for over 30 years. He has a special interest in the development and future of NHS dentistry in the UK.
His knowledge and passion for dentistry has led him to become a trusted voice, offer invaluable advice on how to strategically and successfully run a practice and be named in The Dentistry Top 50 of influential people within the profession.
About Mike
Mike Blenkharn is a Chartered Certified Accountant and Head of Dental at UNW LLP and has over ten years’ experience in working with dental professionals. He has overall responsibility for more than 300 practice clients and is actively involved in advising clients in respect of accounts, practice purchases/sales and restructuring.
About Chris
Chris Barrow has been a trainer, consultant, coach and mentor to the UK dental profession for over 25 years. He combines a wealth of knowledge with the originality and independence needed to resolve the thorniest of problems.