So, it’s almost a year already and you still haven’t reached a decision. Are you ready to buy a dental practice? Or will it be a move you’ll forever hate yourself for?
Well, good thing you’re here! There’s no need for self-loathing. We’ll gladly guide you every step of the way!
First things first, ask yourself these important questions:
Once you have all your answers, don’t dive into a decision yet. There are still upsides and downsides to talk about. It’s really crucial to know what you’re in for before committing.
Here are some of the best benefits to expect when you purchase an existing practice:
While these perks sure sound exciting, you’d want to learn about the potential downfalls of buying a dental practice, too. Here are the most common ones:
If none of those disadvantages bother you at all, and your mind’s 100% fixed on purchasing a dental practice, you may now proceed to the most important part of this article: Your checklist.
If this isn’t your first time opening a new practice, you might already be familiar with some of the steps mentioned below, while others might sound a bit different.
To guarantee a successful sale and transition, be sure to take each step on this checklist seriously. Then again, we already know you will.
The location of your dental business is one of the most significant aspects of your decision-making process. Ideally, you’ll want a place that’s easy for your patients to find, as well as one where you’ll enjoy working.
Here are four attributes to consider:
Knowing how many dentists you’re up against in the area makes it easier for you to identify the level of market saturation. You can obtain this information from the local Chamber of Commerce.
After you’ve settled on a location, you may now commence your search for the best dental practice in that area.
Although it’s not necessary to hire a broker, doing so can lessen your burdens. You’ll no longer stress yourself out with all the research work. They’ll gladly do it for you.
Or, if you happen to know any dentists in your target location, you can ask if they know of any dental professional who’s planning to retire.
Another option is to visit dental schools and find listings of dental practices in postings or trade journals.
A dental practice broker isn’t the only professional who will assist you in the appraisal and purchase process. You’ll need a few other people in your team, such as:
Inheriting the dental practice means inheriting their existing patients and procedures.
By performing an in-depth assessment, you can decide whether you want to continue serving them as they’re used to. And, you’ll have a better idea of how much revenue you’ll be getting from the patient base.
Aside from patient demographics, here’s what you should analyze:
Before you buy a dental practice, it’s imperative to know why they’re selling it in the first place. If their reason is anything other than retirement, you’ll need to dig a little deeper.
For instance, they might be leaving due to demographic or profitability problems, which should be your cue to start developing strategies to solve them as early as you can.
Research about the dentist’s treatment philosophy as well. Find out why patients keep coming back to them. We’re not suggesting that you should follow every step of their routine - just take note of their strong points.
Lastly, look into their cash flow and financial information, including:
As with buying a new house, you need to do a site inspection.
Check if the space is appropriate and see if there’s room for expansion in the adjacent space. Learn about the lease terms and possible options to buy the property.
You’ll also need to have an independent vendor performing an equipment evaluation.
You’ve completed all your due diligence. You’re super confident that this dental practice is meant for you. What’s next?
Make the offer to buy it.
Or hold on just yet.
Your accountant and transition consultant should discuss first. As soon as both parties agree on a price, that’s the time you can finally give your offer.
Your transition consultant will help you secure financing, so you’re in good hands. Also, if you’re working with an accountant who’s had many years of experience, they can refer you to a local bank that offers financing.
Now, here’s the moment you’ve been waiting for: The signing of the Practice Sale Agreement.
Although the agreement’s not a complicated document, you’ll need your attorney to review it thoroughly in case there are surprises.
Additionally, you will be asked to arrange the lease for the dental practice which may or may not include an option to buy.
Keep in mind that the amount of time it takes for the offer to close will depend on the deal. If the buyer, seller, and lender are living in different states, then it’s going to take longer, for sure.
Once the selling dentist receives the money, you may now consider yourself an owner of a new dental practice.
At the time of closing, you’ll be required to complete some tasks, such as the following:
We hope this post has cemented your decision to buy a dental practice.
We also hope that you choose Digital Resource to promote your new business once it’s up and running.
Call us at 561-429-2585 or speak to one of our specialists here to learn more.