"Hubris, thy name is multiple locations."

For better or worse, much of dentistry is infatuated with scooping up as many practice locations as possible, seeing that as the model of “scaling the business.” 

Might there be a better way?

There is nothing at all wrong with expanding to more and more practice locations. However, there is something wrong with picking up what we call “junk dots on a map.” Having a lot of locations just to have a lot of locations is a fool’s game. 

Here’s what tends to happen:

1. Doctor runs successful practice with high collections
2. Doctor thinks they have gotten what they can out of their 1 location
3. Doctor purchases/starts multiple new practices 
4. Doctor barely makes any more money and has far more mess to deal with
5. Doctor gets angry. 

So where did it all go wrong? 

Let’s consult our New Location Checklist: 

• Make sure your first location is profitable before you scoop up another one.
• Install systems in your first practice that can scale and replicate in another location.
• Marketing, hiring and training should all be repeatable processes so each new location can be as successful as the first. 
• Get an associate. As a general rule, it’s wise to have a minimum of N + 1 associate doctors where N is the number of practice locations you have.
• It makes no sense to be a single-doctor with multiple locations. It guarantees that neither practice is producing at its full capacity. And by having more associate doctors than you have locations, you ensure that even if something were to happen with one of your associates, each practice can still continue producing at a high level. 
• Keep Your Entities Separate. Separate EIN numbers, separate reporting, separate bank accounts.
• If your entities are combined under 1 legal entity, each practice is exposed to the risk of the other. It also becomes nearly impossible to break them up when the time comes to potentially sell one of them.
• You also need to have entirely separate financial and practice management reporting for each practice. You need to be able to prove, or troubleshoot, the revenue and profitability of each practice. Don’t be one of those doctors with one central practice that generates all the profit while the satellite locations struggle.
• The same applies for bank accounts. Any of the multiple bank accounts you have for your original practice should be replicated for all others. 

These are best practices for opening new practices. If you're going to start expanding, do it the right way.