You can buy a dental practice as a private investment or via a group contribution. The majority of dentists have a preference for already existing dental practices. However, a huge customer base is not the ultimate guarantee for success.
You might consider yourself an expert, but several other factors have to be put into consideration if you want to achieve your goal. The practice is deemed to help you advance your dental profession while at the same time progressing your business investment to an aimed objective.
In this article, we discuss the business part, where we have segmented eight key factors to consider before settling on buying a dental practice.
After settling on the location of the premises, you would like to consider reaching out to various specialists in your line of work. We at AFTCO recommend you engage dental brokers, health care oriented accountants, dental supply institutions and companies, and likely a business banking practitioner. All these might have leads to a retiring aging dentist who might be willing to sell out their practice.
Once you find a viable seller, it is vital to maintain confidentiality. A few confidential papers might be signed to safeguard both parties and personal info, as well as to evade patient and customer concerns about your authenticity.
Every business establishment, no matter how small, needs a budget in its starting. Lay out the content, personal expenses, how much return your practice aims to achieve, will your net income cover your loan payment, evaluate the weight of the salary, and much more. Budgetary information will advise on the size of the practice you want to buy.
By purchasing an existing practice, you acquire even its current staff with it. These include the support staff, hygienists such as dental surgeons and endodontists, the billing staff, and more.
They are well familiar with your ‘new’ practice in terms of patient’s base and systems used for the smooth running of the practice. The existing staff members can share institutional knowledge that will be valuable to your practice’s future success.
You will need a well-qualified attorney during the transition process. This ensures the negotiation process is smooth and confidential. An experienced attorney offers critical information that might come in handy in the long run. Your initial accountant also needs to be well-practiced and qualified without any conflicts of concern to ensure integrity, quality, and smooth running of professional services.
It’s crucial to always acquire a first-hand look at any dental practice you are considering buying. Every single dental practice is different from the rest, from its staff, patient flow to sales. Think of their day-to-day experiences. Their patient traffic over the last 18 months will talk a lot about the progress of the business.
Pay a visit in person and scrutinize the cash and patient flow; these will help you determine whether the practice is shrinking, stable, or advancing. If you notice a shrinking trend, then that’s not the deal-breaker you’re looking for.
Before you agree on the price and make a deal with the seller, be sure to investigate whether you’re making a profitable investment. Look for professionals well equipped with knowledge in dental practice.
Small business banking specialists can lay out the content on financing such transactions. They also have knowledge about tax returns, available competitors to your brand, and will make comparisons of the practice’s finances with national scales for the best recommendations.
You will need highly skilled staff performers in your team for peak profitability and operation. If you are buying an existing practice, you need to make necessary changes to the initial staff. This cuts out the lazy workforce and employs high performers that are all oriented towards one goal. An excellent staff is key to retaining customers and also adopting new ones for a prosperous future.
It’s risky to trust the selling dentist for the financing of your dental practice. The contract you make might be aimed more at financing their retirement or other desired results, not beneficial to you as the investor.
Once the deal is complete, ensure you find a trustable banking institution for your funding. Banks offer a more neutral option for financing. You will need to present several confidential papers such as previous years’ tax returns, your net worth statement, a resume, and your dental license for starters. More documents will also be needed from the seller. The process might be tedious but well worth the work.