Ask the Expert: What should I consider before making a large technology purchase?

Dear Diana: I acquired my practice four years ago, and currently I am thinking of upgrading my dental clinic with a few large technology purchases. The thought of buying a new piece of equipment is exciting, but making a large purchase can also be intimidating. What are the main things I should keep in mind before making the leap? 
— Cautiously Curious

Dear Cautiously Curious: Certainly, keeping up with technology in your practice can help attract and retain patients, but be mindful about what sort of equipment you are planning to purchase and how it will help improve your services. You might want to consider a few things:

1. Your present financial situation: I am certain that you are aware of how much money you have in your bank account. Unless you are planning to take a loan from a financial institution, look at the whole picture. Are you paying any existing loans? Are you still paying for equipment that you purchased a while ago? How is the cash flow in your practice? Once you prioritize everything and still believe that you have enough money to spare to buy new equipment, consider this one last thing: What if the new equipment breaks down and the repair isn’t covered by the warranty? If this seems too much on paper, then it will be difficult to address in reality. If you are interested in taking out a loan, you can contact BMO or work with another loan provider to get capital financing to help make these big purchases possible.  

2. Reasons for buying large technology: Really do the math and make sure that you believe that this purchase will boost your productivity and increase your earnings, not just because it would be fun to use or nice to have. Consider how the new equipment will help your practice and how much time your staff would need to learn this new technology. You might be able to save some money by just upgrading existing equipment. Speak to the company as they might be able to guide you through what an upgrade process would look like.

3. Research your options: If you have made the decision to purchase an expensive piece of equipment or system, then your next task is to make sure you’re working with a dental dealer who has a solid reputation for professionalism and quality service. Don’t just focus on getting a good deal, focus on a good dealer. Thoroughly explore your options with your chosen dealer. Do they offer to lease the equipment you’re interested in purchasing? If cash flow feels tight, leasing might be the right move.

Making a large technology purchase can be overwhelming, but if you plan it out properly, then you can make a more informed decision. Analyze your needs and how the investment will benefit you in the long term. Always consider important factors before making a large or new technology purchase.

Ms. Talpa works with privately held companies to consistently deliver innovative, industry-specific financing and cash management solutions to meet their diverse needs. As a vice president in commercial banking at BMO, she leverages her background in business valuations, financial analysis and commercial credit underwriting to add value, foster long-lasting relationships and — above all — help dentists realize their vision for practice success.