You’ve dreamed of having your own dental practice for as long as you can remember. You’ve spent years pouring your blood, sweat, and tears in dental school. Now, the time is finally here – you’re ready to take the leap and buy a ready-made practice!
Congratulations!
Buying an existing dental practice is an exciting decision that brings with it many rewards, but also quite a few risks. Purchasing a practice involves more than just finding the right location, equipment, and patient base; it also requires careful planning for both short-term success and long-term sustainability.
That’s why it’s crucial to be prepared. Before making such a large investment in this venture and signing on the dotted line, there are some essential steps you should take. And, those are exactly what we at Arthur Marshall will be covering in this post of ours.
Keep reading to learn how you can buy a dental practice – particularly one that will bring you long-term success.
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1. Consider the Location
First things first, consider the area of the practice. Is it convenient for you? How long will it take for you to get there from your home? Is it easily accessible to your patients?
You might also want to know how many other dentists are situated within the territory so you can determine the level of market saturation. Of course, your best bet is to find a place where there’s not a lot of competition in sight.
Additionally, take a look at the demographics to see if your services would be a good fit. Let’s say you’re a pediatric dentist and the clinic you’re planning to purchase is located in a neighborhood where only a handful of families are residing. You’ll obviously have a hard time gaining new patients. -
2. Start Shopping for an Existing Practice
Once you have a specific area in mind, your next move is to look for a dental practice for sale. While it’s not really necessary, hiring a dental practice broker is something you should definitely consider, especially if you don’t have the time to research your options.
Or, try reaching out to your fellow dental practitioners and ask if they know of any dentists in your chosen area who are thinking of retiring or taking a partner who will eventually buy their practice. -
3. Hire a Team of Consultants
To improve your chances of a smooth-sailing transition, you need a professional team to assist you with due diligence and the ultimate purchase. This transition team usually consists of:
- A transition consultant who will help you analyze the practice, decide how much to offer, secure financing, and close the deal
- A lawyer who will review the sale documents and other agreements
- A healthcare accountant who will assess the practice and provide advice regarding tax considerations
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4. Study the Dental Practice’s Financial State
With the assistance of your transition team, you’ll need to dig deep into the seller’s financial information to determine whether the practice will be able to generate enough revenue to support itself.
Conducting an assessment can help you identify any potential issues with the practice’s finances. Knowing its financial health is critical to making an informed decision about whether or not the practice is the right fit for your needs. It gives you the reassurance that you’re investing in a business that will be successful and profitable for years to come. -
5. Evaluate Their Patient Base & Procedures
Aside from the selling practice’s financial health, you also want to dig deep into their patient base and treatment procedures.
The patient base is the lifeblood of any dental practice. Dental patients are basically what keep the business going. That’s why you need to make sure that the practice you’re buying has a solid patient base that’s profitable and has the potential to grow.
Pay attention to the procedures they offer too, as they can significantly impact your patient base. For instance, if the seller specializes in orthodontics, your prospects will be those who require braces or other orthodontic treatments. Or, if they primarily perform general dentistry procedures, you’ll need to focus on those who need routine preventive care. -
6. Appraise Their Facility
An appraisal of the practice’s office can help you determine its overall condition, including its structure, equipment, and fixtures. You’ll be able to identify any possible renovations or upgrades, which can affect the overall cost of the purchase.
Another reason to assess their facility is for you to decide whether it has the potential to expand. If you see that it’s large enough to accommodate extra operators or has unused space that can be converted to treatment rooms, then you can most certainly expect a boost in revenue and profitability. -
7. Negotiate the Sale
Once you’ve completed due diligence, it’s time to negotiate the sale. Work with your transition team to draft a purchase agreement that outlines the terms of the sale. This should include the following details:
- Buyer/seller warranties
- Identification of specific assets that are being sold
- Allocation of the sale price for tax purposes
- Patient record custodianship
- Details of Covenant-Not-to-Compete agreement
- Details of dental practice transitions
You and the seller will need to review the agreement carefully to ensure that it accurately reflects the terms of the sale. Once you’re both satisfied with the deal, your next move is to sign it so it becomes legally binding.
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8. Transfer Ownership
Next, you’ll need to transfer the practice’s ownership to you. This involves updating legal documents, transferring licenses and permits, and of course, transferring ownership of all the assets and equipment included in the sale.
Again, your transition team will guide you every step of the way. Don’t worry about drowning yourself in a sea of paperwork. They’ll see to it that everything gets done as smoothly as possible.
Aside from a transition team, you might also want to hire a digital marketing team to inform your existing patients about your dental acquisition. They’ll do this through various methods – from social media marketing and internal practice marketing to updating your website and directory listings.Here’s how the process typically works:
- Two months before the acquisition, be sure to review the practice agreement to understand ownership of practice name, logo, and online presence as well as the effectiveness of the current marketing system to establish a marketing strategy.
- Once you’ve acquired the practice, start rebranding by getting a new logo and website designed (if applicable). Begin Directory Listing Management and take over Google My Business to update practice information & keep existing reviews. Also, transfer or create social media accounts
- As soon as you’re ready to accept appointment bookings, your existing patients will be notified of the change, whereas prospective patients will be reached through digital advertising.
Unless you have all the time and resources to do it yourself, as well as a good background in marketing, partnering with an online marketing agency should be your best bet.
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9. Close the Purchase
Finally, you’re ready to wrap up the transaction.
Pay for the practice as soon as ownership has been successfully transferred. Depending on the terms included in the purchase agreement, you’ll either pay a lump sum or make payments over time.
Keep in mind, though, that after the offer is accepted, the time it takes to seal the deal can vary from one week to a few months. The duration depends on how complex the transaction is. If the buyer, seller, and lender are based in different states, for example, then there’s a massive chance that the process will take a long time to complete.
By the time the selling practice receives the money, you can finally call yourself an official dental practice owner. You made it!
What’s Next?
We can’t deny that buying a dental practice can get really daunting. However, by following these steps and working with the right professionals, it can be a rewarding and lucrative investment.
And, if you’re already wondering how to get the word out about your newly-bought practice, it’s our pleasure to introduce you to our partner, Digital Resource, a digital marketing agency with a proven track record.
By hiring them to handle all your digital marketing efforts, expect to see an increase in your online visibility and patient base. Their team of experts will tailor a customized strategy to help you stand out from your competitors and establish your practice as a go-to for dental care.
Schedule a FREE consultation with them here.
