Are you ready to buy your first dental practice? Do you know everything you need to know and then some? Or maybe you’re moving, or you want to increase your patient base, or you want to improve your existing practice.7 Whatever the case, the first step to buying a dental practice is always research.
In your research, you are going to come up against roadblocks. As always, they are a part of any big decision you make, and it’s the discovery of these roadblocks that is just as important in the buying process as overcoming them. Below are four you might come up against, moving forward.
1. The previous owner isn’t ready to let go
Some owners are just too emotionally invested in their practice to let it go, or they are not ready to retire. Either way, it does not bode well for you and could cause you unnecessary heartache. In some cases, the owner wants to be employed for an indefinite amount of time. If the owner sticks around for a few months, that’s fine and actually helps to smooth the transition.1 But when that few months starts to stretch into a few years or even longer, it is unreasonable and frankly unfair to you. Always ask the seller questions to make sure that they and you are on the same page.
2. The professionals are not professional
It is a good idea to get professionals involved in the purchase. Perhaps you need an accountant to help you figure out your finances.5 Or maybe you could use a lawyer or another kind of specialist to help you make the right decision. But by “specialist,” I don’t mean someone who says they’re a “specialist” but have no credentials or are just a friend you can’t turn down. Make sure your professionals are professional with expertise in the field. Too many things can go wrong without a specialist on board, including non-specialists dragging the issues out longer and costing you more.
3. Finances aren’t ready
Being prepared to take this step what will help you clear each hurdle quickly and easily. Consider your own debt first, such as your car loan, mortgage, or school loan. There are a lot of decisions to make in regards to borrowing; however, getting your finances in order is the first step as well as understanding how much you can borrow when that time comes. Remember that your own finance preparation is essential to a successful purchase.5
4. Practice is “under construction”
One of the worst mistakes anyone can make before buying anything is neglecting to do the research involved. What are you buying exactly? Have you taken a good long look at the practice? Factor in everything when buying the practice from purchasing new equipment and redecorating to rebranding. If you don’t do the research, who knows what you’re really getting and how much money you will lose in the process of bringing it up to your standards?
Important Questions to Ask When Buying a Practice?
These four roadblocks can be avoided by simply asking the right questions and making sure you get the answers that satisfy you. Below is a list of questions to ask the seller before moving forward to avoid any unnecessary surprises.1
- What are your plans after the sale?
- Do you want to continue to practice dentistry? If yes, in what capacity?
- Why do you want to retire?
- Have you talked with your financial advisor or CPA about whether or not you can afford to retire?
- Have you had associates or partners in the past? Why haven’t they stayed?
- If there was a way for us both to have incentives to make the deal work, would you be willing to delay the partnership sale slightly to ensure that our works styles and skills are a good fit?
- Which firms have you engaged to help with this transition? How are they paid?
- How can we be sure to protect ourselves and our interests, and ensure a smooth transition for patients and staff?
- Will you have any issues if I engage my own CPA and lawyer to advise me through this deal?
And finally, these are questions to ask yourself about the practice you’re buying and what you are expecting from it:
- Do you know what you’re actually buying?
- Do the patients actually exist? How many are active?
- What equipment is staying and what equipment isn’t?
- What is the reputation of the clinic?
- What software are they using?
For more information and advice for those preparing to buy a practice, please enjoy the many resources below: