It can be an overwhelming and exciting experience buying a dental practice for the first time. There are many factors that you need to weigh, such as growth potential, the dental practice valuation, and the practice’s potential net income. Ultimately, the dental practice must be financially-sound and you need to do the following during the purchasing process:
6 Things To Do When Buying A Dental Practice
- Reconsider Asking Price- the initial asking price may not reflect the true value of the dental practice. You need to closely assess revenue, expenses, and net profit over the past two years. Be aware if the dental service often lost money at certain months of the year. This could indicate that the business is unstable financially.
- Choose Financing Options- before applying for a loan, you need a certified appraiser to provide a dental practice valuation. A lender may require tax return documents, a net worth statement, and copies of dental practice certifications.
- Check Suppliers And Consultants- make sure the dental service is working with reliable suppliers and consultants. Suppliers are crucial in ensuring that your dental service will operate smoothly.
- Make A Budget- your initial budget should include the total acquisition costs and operational costs for the first year of operation. Include a conservative projection of revenue to realistically know when you will reach break-even point and start making real profit.
- Assess Existing Staff- staff is a crucial component of any business. Their knowledge, experience, and skill are invaluable for the long-term success of your dental practice. Make sure that the transition will be easy for the staff and they will remain productive the day you officially acquire the business. It is important to interview them and listen to their concerns.
- Make Final Examinations- before signing the documents, you’ve got to see the business for yourself. A first-hand look allows you to see any issue that must be addressed before you finalise the purchase. Try to get a sense if the dental practice is well-managed and properly staffed.
Contact Pluto Partners
To learn more reasons why dentists might want to get a dental practice valuation and sell their practices, contact Pluto Partners today and speak with a Healthcare Business Advisor who can answer any questions you might have.
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