Purchasing a dental practice is a life-changing choice for a dentist. This is a decision that takes time and requires due diligence. It can feel risky to shift from employee to owner, but the risk can be well worth the reward. When done correctly, buying a dental practice provides greater control over one’s career, the satisfaction of owning and operating a business, and financial security. One study shows that a dentist can earn an additional $14,000,000 (that’s right – million!) over the life of their career by owning an office rather than working as an employee.
Types of dental practice acquisitions
Each dental practice acquisition opportunity is unique and practice sales and transition can be very complicated. But there are different types of acquisitions beyond the standard practice for sale that can be considered. These include:
- Purchasing a practice – as you can guess, this is simply purchasing an existing practice and taking over as owner.
- Practice for Merger – involves one dentist buying or merging one office with another, usually involves a dentist close to transitioning merging with another dentist with a strong or thriving practice.
- Partnership – involves bringing another dentist onboard and sharing all practice responsibilities.
- Associateship – similar to a partnership, but involves a group of dentists.
- Facility for Sale – quite simply a building or location for the practice of dentistry, but doesn’t necessarily include a list of patients.
- Real Estate – property where a dental practice can be established.
Steps for buying a practice
If you’re considering purchasing a practice, the first step is to ask yourself the following questions:
- Do you have the desire and commitment to be a practice owner?
- Have you maintained your personal credit and built up your personal savings?
- Have you identified the criteria (location, size, practice philosophy, etc.) for your ideal practice?
If you answered yes to the above questions, you might be ready to buy a dental practice.
Step #2 is to consult a dental broker. Enlisting the help of a trained specialist in buying and selling dental practices can provide valuable insight into what’s available in your desired area and other information that can help you find the best practice to fit your needs.
Step #3 is to prepare a budget, taking into account your expenses, potential earnings, loan payments and more, in order to help determine what size practice you should look for to purchase.
Step #4 is to look at the actual practice and consider its condition, existing patients and the current support staff.
Step #5 is to have your dental broker conduct a practice valuation and compare it to the seller’s asking price. Then investigate the possible reasons for any discrepancies between the asking price and valuation.
Step #6 is to make an offer based on the practice valuation and any other considerations that your dental broker has worked to identify. In many cases, making an offer to purchase is best handled through your dental broker.
Learn more about what factors to take into consideration when buying a practice by getting in touch with a dental broker to help guide you from initial research to final transaction.