Buying a dental practice can be an exhilarating experience that can enhance your career. You will have the opportunity to make decisions that will have a direct impact on your practice and be able to benefit monetarily from those decisions. But it is of utmost importance to follow certain guidelines that will help you find and acquire the practice of your dreams.
You might want to purchase a practice that is close to home since you may have lived in that city for most of your life. At first glance, that would be the best bet since you probably have worked as an associate in a dental office and have nurtured many solid relationships. But there are so many other variables to consider when purchasing a practice.
Size of the practice
Whie it might be tempting to go all out and buy a large practice with strong revenues, you should keep in mind that there might be a lot of overhead as well. Although chances are the business will be very profitable, it may come at a price if it is your first acquisition. If you don't have the managerial experience, it might be difficult to run a practice with several associates, multiple hygienists, and administrative staff. It might be in your best interest to start small in order to get your feet wet. Lower volume, less overhead practices sometimes generate more income to the owner than their flashy, high revenue counterparts. In addition, lower overhead practices are more able to withstand the devastating effects of a recession like we're in right now.
Demographics
Is the practice you're considering located in an area in which a lot of elderly people reside? If so, does the practice offer implants and other services that are tailored toward senior citizens? If you specialize in pediatric dentistry, this practice may not be the one for you. You should also evaluate other demographic trends in the area such as median income, employment statistics, and the rate of home ownership. All of these factors can be indicators of the practice's future success.
Advertising and Marketing
You should evaluate the current owner's marketing strategy and budget. How much is being spent on Yellow Pages advertising, direct mail, television, and radio ads? Does the practice have a website and if so, how many visitors come to the site each month? Has the current owner developed ways to evaluate the effectiveness of each marketing campaign? These are important questions that must be asked during the due diligence process.
Condition of the equipment and facilities
Obviously, you should have the right to inspect dental equipment to make sure it is working properly. But going beyond that, you should determine if the equipment is advanced enough to grow the practice. Even with insurance, dentistry is a very costly outlay for customers and they expect to be treated with state-of-the-art equipment. In addition, you should pay particular attention to the adequacy of the waiting room, both in terms of size and appearance. Providing a soothing atmosphere helps bring patients back.
Will the seller of the practice stay for a period of time?
Even if you are buying the practice you've been employed with, you should consider asking the seller to stay with the practice for three to six months. This usually results in a smooth transition so patients won't be concerned about future care.
These are just a few of the items to consider when you're buying your first dental practice. You should also work with trusted professionals like Certified Public Accountants and Attorneys who will steer you straight with sound financial and legal advice. These professionals may charge high rates, but can save you much more in the long run.
