Buying a dental practice is your most prized investment in terms of both financial cost and personal investment. Before deciding to purchase, consider these aspects to aid in your successful transition.
Below is your guide to buying an existing dental practice for sale in California.
Choose Your Area of Practice
Your first decision lies in selecting the geographic area(s) you see as fitting your criteria. Selection is not easy as it encompasses social and economic factors and ultimately may determine where you and your family live.
Know All About The Practice’s History and Financial State
Once you have selected those areas of choice, make sure you ask your dental practice broker to provide you with available practices for sale (inventory) and also those that may come up short on the market. Curiously, not all areas are either highly sought-after or provide an active market. It is simply difficult to find options in certain areas – whether due to the size of the city or simply its popularity.
Once considering an offering, make sure you secure tax returns and profit and loss statements. After determining the probability of patient transfer (yes that’s on you), the next most important facet of your acquisition is determining overhead. Since most dental expenses are usually fixed from one month to the next (staff, rent, cost of your loan, insurances, utilities) the monthly expense calculation should be fairly easy to ascertain – and a key determinant of the risk you are taking in the purchase.
Get The Number of Patients and The Treatment Information
While many buyers focus on the number of active patients, a true savvy purchaser determines the probability of retention of patient loyalty. After all, the risk in a practice acquisition comes from patient attrition. So, my advice is to review patient records, secure practice analysis, and other computer management reports and focus your inquiries as to the services referred out — knowing this will help you in offering more services and working on things that need improvement.
Get Professional Help
Don’t try this on your own !! How many times have you heard that in all walks of life? But, in the case of acquiring a practice, frankly, you are out of your element. Hire a professional dental practice broker to walk you through the process. I’m not suggesting the broker retained by the seller to help them sell the business, I a recommending a broker (familiar with practice sales) to guide and represent your interests! This person to become part of your team including accountant, attorney, and practice management consultant.
Make A Visit To The Facility
Finally, once you have decided on this career path, chosen your cities of interest, and made arrangements to secure your team of advisors, begin the process by visiting practices, asking questions, reviewing financials and get a feel for the current market conditions – you are in a competitive environment to secure a practice, so be prepared!
Once you have found “the right practice for you”, then the heavy lifting starts. Negotiating a purchase that is respectful to the seller’s needs and yet fits within your budget. Many tasks remain — making an offer, securing financing, executing contracts, negotiating a transition with the seller, and all interim steps before taking over. Don’t let the process get in your way…keep focused on the objective…keep working toward your goals and complete your purchase!
If you need help during the process, want some help in establishing proper guidelines, need to ground yourself with realistic expectations, call dental practice broker, Lou Bermudez. Without cost nor obligation, Lou will provide you a free consultation geared toward YOUR plans, needs, and wish list. He may be reached at 818-519-8564 (Lou Bermudez, dental practice broker).