What You Must Know if You are Purchasing a Dental Practice | Baltimore Dental Brokerage
Dental Practice Sales & Transitions
You want to own a dental practice to change the lives of patients, of course, but not at a financial loss. To ensure a profitable investment, you must consider all aspects of what you are buying. Here are a few factors to consider before purchasing a practice.
Determine Practice Value
After narrowing down a budget, the most important task when looking at dental practices for sale is determining the value of the ones in which you are interested. This is an enormous task that encompasses many factors: Location, value of equipment, cash flow, profit and loss, salaries, active patients, goodwill, and mortgage debt, for example. A dental practice broker can compile this information for you relatively quickly.
Never accept information without independently verifying it. While it’s a logical point, it is easy to become blinded by enthusiasm. Once you’ve begun dealing with the seller, rely on your senses and logic to get the facts:
- Visit the location at different times of the day or week
- Verify patient count through practice management software or by viewing sample charts
- Determine the fair market value of existing equipment through depreciation, a figure available on the seller’s business tax returns
- If you are not buying the physical property, review the lease and your renewal options in the event the practice is not what you expected
An experienced dental broker can help you determine a practice’s value and whether it is worth the investment.
Study Both Location and Demographic
How visible is the building, and does that matter to your type of practice? Is the property on a one-way street? How easy is it to park? Is there any planned road work that could make the building less accessible? Is the practice near the demographic you want to reach?
In addition to helping you answer these questions, a qualified dental broker can also help you evaluate your competition.
The Value of the Seller’s Team
Talented team members are vital to the success of a practice, but would the seller’s hygienists, assistants, and front desk team be the best fit for you? Loyalty and longevity can be a plus, providing valuable continuity for existing patients and smoothing your entry into the practice However, if the current team chooses to stay on, are they up to fulfilling your goals? If you plan to introduce a wealth of new technology, for example, not all team members will be up to the challenge — or want to learn. If so, are you willing to invest money in training them, or in hiring new team members?
There are many facets involved in buying a dental practice. An experienced dental broker can make the many steps involved much smoother. Call our Best Maryland Dental Brokerage office today and request a complimentary initial consultation.