How to Buy Your First Dental Practice?
Thinking you’re in the market for your first dental practice? Buying an existing dental practice has a lot of advantages. From having established cash flow to acquire a staff that is trained and familiar with the layout, you really can’t go wrong with buying what someone else has made.
But purchasing a dental practice is not without its nuances and complications. Many questions like how to evaluate a dental clinic or should I hire a dental practice broker to surround the process. Here is a simple guide on how to purchase your first dental clinic.
Part of the early process is finding assistance in people who have handled dental practice sales before. You can trust these professionals to steer you in the right direction by providing sound advice and warning you of pitfalls.
A dental practice attorney is necessary as they draw up all documents accurately and take the time to explain the finer points. An accountant specializing in dental practices is another requirement. There are suppliers, bankers with experience in dental practice loans and office designers too. You can always hire a dental broker to handle the search for all of these experts too.
Financial planning is a significant step because you won’t know how big of a loan you can take out before you account for every expenditure in your life. Having a good idea of what your goals are for the practice helps keep you focused and conferring with a financial advisor is good practice.
Once You Have A Place In Mind
After you’ve found your ideal dental practice in a great location and your finances are in order, it’s time to make your move. Before signing any document tying yourself to a place, see it first. A picture is worth a thousand words, but seeing something with your own eyes could fill volumes.
Get a feel for the place, see it in action, watch the patient flow and observe the staff working. Ask the seller how many patients they’ve seen over the last two years, bring in your dental broker to do an equipment valuation and make sure you do it confidentially.
If you like what you’ve seen, it is time to negotiate an offer. Once the back and forth is over and both sides are content, your attorney will draft a Letter of Intent. This non-binding document expresses your interest in buying the practice, states the price the two parties agreed on and other vital terms of the agreement. Both parties sign and then you’re off to get a loan.
Your accountant, financial advisor and you will cover the terms of the loan to purchase the practice. They’ll explain the different kinds of debt, interest rates, the terms of repayment and discuss with you the ins and outs of your case. Putting this step in motion earlier in the process is good practice if you want to avoid unwanted surprises when it comes to financing.
As The Ink Dries
Both parties will get copies of all the final documents. The hard part is over, but you shouldn’t demand the keys right there and then. It’s important to allow the former owner the time he or she needs to transition out of the ownership, alert staff and patients to the sale and other arrangements, especially if they are not staying on as an associate. You can take this time to get the permits you’ll need in your state, make a marketing plan and envision changes you’d like to make.
Once you do get those keys, keep in mind that the staff you keep on and your patients may feel nervous with the change of ownership. It is highly advisable to learn the system the previous owner had in place and to implement changes slowly.