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The Importance of Investing in Equipment Upgrades

By: Greg Owens

Today's references to equipment "hardware" typically bring to mind computer systems and the various forms of computers available. But when it comes to your dental practice, hardware can have a much broader meaning. It encompasses not only your office computer systems, but all the digital and manual tools and technology you use in service to your patients. Dental hardware can even refer to the specialized, outfitted physical space of the practice itself, such as your operatories and in-office laboratory.

Why upgrade equipment?

Continuing to invest in your equipment, technology and physical space may be an important part of building a robust and viable business. Incorporating the right technology at the right time may help support practice growth through greater efficiency, better diagnoses, and enhanced communications with patients. Indeed, replacing your outdated equipment with state-of-the-art tools and technology is one way to show your patients that you care about their comfort and well-being.

At the same time, an investment in new equipment may help you grow your business by becoming more efficient and providing better treatment options.

For example:

  • A CAD/CAM system, which was previously located at an offsite lab but can be kept within your practice, could possibly save your patients time and money.
  • Conebeam technology may help enable doctors to diagnose more patients who might be in need of specialized treatment.
  • Intraoral cameras may help with case acceptance - instead of explaining to patients why they need a certain procedure, you can show them directly with intraoral images.

Virtually any combination of productive new technology may help enhance internal operations while also positioning your practice for meaningful growth through expanded services.

Some dentists purchase equipment based on recommendations from their distributor, an excellent source for information when you are seeking to fill a specific need. But also important is the process of systematically updating your practice with newer, more advanced equipment and technology to maximize the level of care you can provide to your patients.

Expanding your space to maximize productivity

If your practice is "bursting at the seams" or you are booked months in advance, investing in an office expansion may be what's needed to reach your patient care goals. Expanding your facility by bringing specialty services in-house and adding state-of-the-art equipment may also result in a more patient-friendly environment. You may find it easier to attract experienced associates and qualified dental employees, as well as a broader range of patients.

In addition, a practice expansion may provide an opportunity to accommodate more patients. By our definition, a well-designed practice incorporates state-of-the-art equipment, proper zoning for convenient vehicle parking and foot traffic, attention to practice aesthetics, and a focus on the overall quality of the patient experience.

However, bear in mind that to be successful, a practice expansion requires a good deal of planning. You may need to work with a contractor, architect, interior designer, accountant, equipment vendor and lender to fully define your project plan, specify your practice design, obtain funding, and undertake construction of your expanded office. Industry professionals (such as an industry specific lender) may be able to connect you with other industry resources that may help you make your expansion dream a reality.

Working with an industry specific lender

Your lender is a key player in making your equipment upgrade or practice expansion a reality, and understanding the distinction between different types of lenders is important.

  • Collateral-based lenders typically use the value of your personal assets - such as your home, money market accounts and vehicles - as collateral when making credit decisions.
  • Cash-flow lenders, on the other hand, typically make credit decisions based on projected revenue and cash flow, using the practice itself as collateral, not personal assets. Cash-flow lenders tend to be specialty lenders focused on a specific business or industry.

The value of using a lender that specializes in financing dental practices (cash flow lender) is that they tend to understand your specific circumstances and needs and may have greater flexibility in offering favorable terms. For example, some dental industry-specific lenders may offer equipment financing options with terms up to 10 years, which is unique to practice lenders. A 10-year term may give you greater control over your cash flow, which may allow you to fund a major equipment purchase or practice expansion.

In addition, industry-specific lenders may view your practice as an asset. As the value of your practice goes up and the amount of your debt declines over time, the practice gains equity. Some healthcare industry lenders like, Wells Fargo Practice Finance, may allow you to access this equity to fund additions to the practice to help it grow and thrive.

About the Author

Greg Owens is the Regional Director East for Wells Fargo Practice Finance. As an experienced consultant and finance professional, he speaks nationally to healthcare professionals advising in practice planning strategies for emerging and established practitioners. His industry background offers practitioners a unique perspective as they approach some of the most important decisions in their professional lives. With more than 30 years of healthcare financing experience, Wells Fargo Practice Finance specializes in helping healthcare professionals acquire, start and expand their practices with various financing options and a signature Practice Success Program. He can be reached at 1-800-407-4737 or greg.owens@wellsfargo.com

View all articles by Greg Owens

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All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.