You want to buy a dental practice. It’s a big step, but you feel ready. Still, since it’s not only significant investment financially but also in your future, you want to go about it the right way. So, here’s a guide to help you navigate your impending purchase.
Advantages of buying a dental practice
Probably one of the biggest reasons dentists purchase an existing practice as opposed to starting their own is because they acquire a patient base. But you also get a competent, trained dental staff who are familiar with the day-to-day operations of the practice. Plus, if you feel like you lacking in business training, acquiring an existing practice gives you access to business systems that can help relieve some initial pressure in regards to the business side of things.
As we said, this is an investment. That’s why you need to first and foremost decide where you want your practice to be located. That means considering personal things like where your family wants to live, local schools for your kids, your spouse’s career, etc., to make sure you’re setting yourself up to find the right fit.
When looking at location, also consider doing a demographic survey to learn valuable information, such as the dentist to population ratio. This and other details about an area will help determine whether there’s a sustainable patient base for long-term success.
Contact useful sources and advisors
Finding your dream practice is not a lone effort. Look to dental practice brokers, dental supply companies, and postings at dental schools closest to your desired area. These sources, as well as trade journals, may be able to provide listings.
You’ll also need assistance from specialized professionals, which could include:
Transition consultant: This is typically someone involved as a dental practice broker but with more services and knowledge than matching a buyer and seller. Ideally, they would help you locate a practice, analyze the practice, determine the correct price to offer, secure financing, and provide the necessary services to close the sale.
Dual agent: Make sure the listing broker represents not just the seller but also you, the buyer.
Accountant: They should be specialized in healthcare practices to help with the analysis of the dental practice.
Attorney: They should review the sale documents.
Dental practice visits
After you’ve found practices that could be potentially good fits, your dental practice broker or transition consultant should arrange visits. This will give you the opportunity to meet the current owner, get a feel for the atmosphere, and see how the practice functions. This is also an opportunity for you and the current owner to exchange questions so that both parties can determine if a sale feels right.
While you’re visiting practices, it’s also essential to do practice analyses, which will help you learn financial information about each practice.
Making an offer and designing a transition plan
If you find a practice that feels like a good fit, it’s time to make an offer. If the seller accepts your offer, then creating an effective transition plan is next. This should include responsibilities of everyone involved in the transition so that the sale proceeds as it should. The timeline should be strategic so that all items are executable in a timely manner.
Once an offer is accepted, this is also the time to secure financing if you haven’t already. Find an experienced bank to work with for lending. Keep in mind, getting into business with the least amount of debt will serve you better in the long run.
Completing the purchase
At this point, necessary contracts will be drawn up and reviewed by your attorney. If there are any concerns from either party, they will be addressed during the drafting process.
Once the contracts are reviewed and signed, now it’s time to look to the future. How will you help your patients and team adjust to a new dentist? What are your practice goals? Congrats, you’re calling the shots because you own a dental practice.