Buying a dental practice rather than starting one from scratch saves many new dentists a lot of stress and frustration. The decision to buy a dental practice is also great for dentists who need to expand or move. However, not every dental practice purchase ends happily. In order to choose the right practice, you need to follow a number of critical steps, most of which involve simple planning and evaluation.
First and foremost, make sure your investment is sound. You need to do a lot more than simply schedule a visit. A clean office isn’t conclusive proof of a well-run business. Even if the office has a great location with access to your preferred clientele, you need to dig much deeper. Ask for several years’ worth of tax documents and a thorough review of finances. A trained accountant will be invaluable for this step.
You should also evaluate the number and type of patients coming through the door of the practice. Make sure you ask about the number of regular patients that visit the office. You want to know how many have insurance and what demographics the office serves most. If you specialize in dentures, buying a practice with a high number of students from the local college probably won’t be the best fit.
Determining Immediate Needs
When you’re investigating the value of a potential purchase, look at how well it will suit your current budget, space, and partner needs. Obviously, you’ll need to ask about lease arrangements, but you should also inquire about local taxes, licensing fees, and even average utility costs. If possible, discuss prior marketing strategies and costs with the previous owner as well. Advertising costs change dramatically between neighborhoods.
Of course, you need space for not only equipment but also patients. Make sure you provide enough parking and waiting room space for your expected volume of patients. Storage space is invaluable, too. If you plan to buy a dental practice with a partner, you’ll need to address everything we’ve discussed with them. Space is a particularly important part of multi-partner purchases.
Determining Future Needs
When you’re looking at space, analyze how much you can grow your customer base before you expand beyond the practice’s capacity. Can you add parking behind the building? Is street parking available? Will there be enough space for your patients to sit and wait? Most importantly, will there be enough room to bring on board a new associate or partner? An extra office can be used for storage in the short term, and there’s always a use for an extra exam room. Although these may seem like unnecessary expenses, they allow you to get a much better return on your initial investment in the long term. If you outgrow your new practice, you’ll have to start the process, and the investment, all over again.
A sound investment is all about good planning and thorough investigation. Buying a dental practice is no different. Your most valuable asset in this process is a well-trained accountant. Look at immediate needs and long-term considerations. Double check everything, and make sure the established customer-base matches your expertise. Talk things through with your partner(s), line up your financing, and ask lots of questions before you buy a dental practice.