Top 5 Things to Know When Buying a Dental Practice
Needless to say, buying a dental practice is complicated. Next Level Consultants is passionate about making the process as easy as possible for dentists. We do this by providing access to a network of experts who have also worked with hundreds of dentists to successfully purchase countless practices. While there is certainly a lot to consider. Let’s get right into it – here are 5 of The Most Important Things to know when buying a dental practice.
1. Time is the Enemy
A common saying in business circles is that “time kills deals.” This is true even if you’re just thinking about buying a practice. Waiting and doing tons of research sounds great on paper, but taking too long can allow various things to change, from prices to availability and so on. Once you get the urge to buy a practice, it’s in your best interest to start taking action right away in order to set yourself up for the best outcome.
2. Cash Flow is Most Important
When looking at an existing practice, a prime thing to consider before purchasing is its cash flow. A practice with one dentist taking in over $2 million in production is very different from one making the same amount that has several doctors and accepts Medicaid. Evaluating cash flow will not only show you what you may be taking home at the end of the day, but how hard you’ll have to work for it as well!
3. Don’t Sweat the Small Stuff
If a practice has a great cash flow, a healthy number of active patients, and is in a desirable area, don’t worry if the price is slightly out of your ideal range. Paying a little more for a practice that is guaranteed to make you money in the future should be considered an investment, and being flexible with the seller will also make your life easier and better preserve the relationship throughout the negotiation process.
4. Fire Bad Employees
No one likes to do it, but if the existing team at the practice isn’t up to standards, meaning they are dragging the business down, unwilling or incapable of improving, then it’s in everyone’s best interest to let them go. Bad, unhappy employees can really hinder the growth and success of a dental practice. A team’s morale and outlook is essential when taking on new ownership.
Many times docs here “Don’t change anything!” Keeping the practice the same to keep revenue consistent is a really important point. Consider working with a practice management consultant to determine best practices when hiring and firing employees. You want to make your life as easy as possible when assuming responsibility of a practice. Remove any obstacles that make obtaining your goal more difficult and challenging, or make your practice less profitable.
5. Don’t Do It By Yourself
It’s tempting for a dentist to think they can handle buying a practice all on their own. If they weren’t intelligent, they wouldn’t be a dentist, right? However, there are many factors to consider along with potential pitfalls, plus the time needed for proper due diligence is extensive.
It’s much easier to work with a team, which should, at minimum, include a broker, an accountant, and a lawyer. They will ensure that the practices you’re looking at are actually worth your time while guaranteeing that every “t” is crossed and “i” is dotted, making the experience much less stressful.
About Next Level Consultants
Our mission is to help dentists buy dental practices without breaking the bank or losing their sanity along the way! Led by Mike Dinsio, a former banker who has personally helped hundreds of dentists purchase practices, and Paula Quinn, an active hygienist and practice owner, they are eager to help you take your career to the next level in the most intelligent and reliable way possible. To learn more about how they and their team could help you, contact us today.