Whether you’re coming out of a dental school residency, a corporate environment, or just want to move, the process of merging or buying a dental or medical practice is an intricate one. Buying a dental practice is no mean feat. As such, here are some of the most crucial considerations that you, as the purchaser, should take into account. Let's say practice "A" has a profit of $241,000, practice "B" has a profit of $192,000, and practice "C" has a profit of $164,000. Click here to find out more about why dentists want their own practices. It will also be necessary to arrange dental-specific due diligence, to determine the state of the business you are purchasing – from the practice’s goodwill, to the number of employees and associates on the books, and whether they have thorough agreements in place. When buying a dental practice (especially if it’s for the first time), you need the competent hands of qualified professionals. Click here to watch our webinar on whether you should buy or start a dental practice. The seller will present the buyer with a few key facts about the dental practice such as: Turnover It’s important to chart the potential profit of your new dental practice. What marketing is working the best for the practice and which marketing avenues are exhausted? When a lender assesses your loan application they will be looking at a variety of factors. We’ve bought, grown and sold our own dental practices for 25+ years. If the premises has not been a dental practice in the past, it will be necessary for you to apply for planning permission to practise there. Checklist for Buying a Dental Practice September 5, 2017 / in Corporate Dentistry , Profitability / by Kevin Coughlin Whether you are newly out of dental school or have been running your own practice for years, buying a dental practice is a huge commitment. Make sure to ask the seller about the marketing relationships they’ve forged during their time at the practice. It can be a complicated and often stressful process and there are many important steps that any purchaser must take to ensure the investment is viable – in both the short and long term. It is mandatory to procure user consent prior to running these cookies on your website. Practice transition consultant or broker — Dental practices can be sold directly by the owner or through a business broker, who may have multiple buyers waiting for the right practice to come along. We’ve been helping the UK’s dentists start their own dental practices for nearly 20 years and, as dental practice owners ourselves, we’ve learned a thing or two about buying dental practices. Buy-Out Buy-In Merger Roll-Up Affiliation Associateship Associate To Buy-In; You can learn more about the details of each of these transitions in our ebook. Click here to find out more about patient retention. Where do you want to take their practice after they’re gone? An asset sale involves a buyer acquiring from the company selected assets which make up the dental practice, for example, the premises, the NHS Contract, goodwill, staff and stock in trade. Key Performance Indicators (KPIs) like these reveal the day-to-day work being done to maximize the practice’s earning potential. Exchange and completion. As the buyer, you are expected to make the initial offer on the practice, with negotiations to follow. Pre-Contract. You can hear about all our upcoming webinars here. How much of an opportunity for growth do you see? If you are buying a dental practice for the first time, you will suddenly be exposed to a variety of business and legal issues that go along with owning a practice and being your own employer. In essence, they make sure all of the t’s are crossed and i’s are dotted, so you don’t have to. Looking to buy a dental practice?. What’s the level of new patients received from direct referrals? Buying a dental practice can be exciting, but you want to make sure you start your business off on the right foot. It is also important to employ the services of a dental specific solicitor if you want to complete with as few issues as possible. 1. It is possible to release restrictive covenants in some cases, or to make variations that will allow you to conduct your dental business in a beneficial manner – but if this is not an option, it would be wise to reconsider the acquisition. John Grant, joint founding director at Goodman Grant, sets out the most important considerations when purchasing a new dental practice… Buying a dental practice … We receive numerous new instructions of practices coming to the market week on week, allowing us to offer an abundance of dental businesses to suit any buyer. A Dental Practice Buyer’s Checklist Use this checklist to help you start the process of buying a dental practice. If there currently is no marketing in place, that might be a point for contract negotiations further down the road. As a starting point, our Moving in checklist contains some key aspects to prepare ahead of sale completion, and things to do on day one of ownership. It is undoubtedly one of the most vital steps since it will help you identify any potential problems early on and give you the time to decide how best to deal with them before you have made ay legal commitment to the purchase. Here is a checklist to keep you on track when buying a dental practice. Necessary cookies are absolutely essential for the website to function properly. This survey helps our Transition Advisors start to build your team of Certified Financial Planners, legal professionals, and trusted dental lenders to help you understand your situation and create a plan to move forward. After all, if the seller doesn’t like your proposal, they will simply move on to the next buyer – there is no prize for second place. If the seller is a member of a local business referral group or association, follow up with other members. As you prepare to buy a practice, you can take our no-obligation Buyer Survey. Each state and territory has slightly different requirements for buying a dental practice. The process of evaluating a dental practice acquisition opportunity is often referred to as “due diligence”. For more information, contact your state dental society. You will also want to check any equipment logs and maintenance certificates, to ensure everything is in good working order. Your Southern California Dental Practice transitions experts at First Choice Practice Sales have developed a 20 step dental practice buying guide! Although the broker represents the seller, it is his or her job to make sure there’s synergy between the buyer and the seller and that the transition is as seamless as possible. There are four key stages in buying or selling a Dental Practice. How many new patients have they generated in the last 12 months? Even if you are purchasing an established practice it may be worth your while to check the permissions anyway – it is not that uncommon to find that planning permission was never obtained and, while this rarely results in a purchase falling through, it is an issue that must be addressed. Not only have we been helping the UK’s dentists to buy, start and sell dental practices for nearly 20 years, we are dental practice owners ourselves! Buying a dental practice is a huge commitment, so if you are looking to become a principal, there are a few things you will need to consider. Some banks can be quite pedantic when it comes to conducting their own checks and valuations – something that might delay proceedings for some time. Buying or selling a dental practice will probably be one of the biggest financial transactions you will ever be involved in.. And whilst your years at Dental School will have trained you to provide an excellent clinical service for your patients, no one ever teaches you how to buy or sell a dental business. Your current living situation i.e. Let us know what you’re looking for and we’ll get to work finding your perfect match from our extensive list of dental practices for sale in the UK. You must take the time to learn every facet of the dental practice for sale. Ask the seller for a short (3-5 examples) list of their most outstanding treatments to gauge the effectiveness of their follow up system. It is important you find a legal advisor who has dental market expertise so they understand the nuances of a dental practice, employee contracts, what warranties and covenants will be of use in the contract and any considerations for your regulatory body. Like any important transaction, buying a dental practice hinges on whether or not the buyer and seller can agree upon a price and contract terms. Do your own homework and employ your own valuer to ascertain if the dental practice for sale is really worth what the sellers wants to sell it for! Rent or buy your perfect dental property on BDJ Marketplace, or advertise to sell or rent your dental property in a few simple clicks. All have annual collections of $550,000. This checklist and related resources can be used as a starting point to address many of the issues dentists encounter when opening new practices. What is the patient retention rate? However, there are many tasks that you, or a representative like Samera Business Advisors, must perform in order to make sure that your transaction is legal and your resources are secure. If you place an offer for a practice and do not have available funds (or a finance agreement in place) you risk being unable to buy a practice whilst losing credibility with a seller. As part of the due diligence process, your solicitor must request the seller to guarantee that the supplied information is correct in order to protect against any loss caused by misrepresentation. When buying a dental practice, how do you know what to do after signing the letter of intent? A good solicitor will carry out due diligence, negotiate the property aspect of the deal and look at the NHS contract with you. Ultimately, due diligence will tell you whether the investment you are making is worthwhile and sustainable for the future. You also have the option to opt-out of these cookies. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. The ADA sells a booklet called "Valuing a Dental Practice." This website uses cookies to improve your experience while you navigate through the website. Always remember, the valuation from the seller needs independent assessing. Find the perfect dental practice for you, across the UK. Your management experience and number of years you have from leaving Dental School, Your ability to repay the loan with a comfortable margin of error if interest rates rise. It should be part of your practice purchase planning. © FMC, Hertford House, Farm Close, Shenley, Herts, WD7 9AB. It is important to check what their online presence is at the moment. Then give us a call and we can help you get the ball rolling. FREE consultation – NO obligation – EXPERT advice. The benefits that you enjoy afterward will be substantially greater if you seek the advice of an experienced dental attorney when negotiating the deal and before signing the purchase agreement. Do they all have the same value? Too early, and the CQC will simply reject you; too late and you will not be able to complete the purchase on time. Copyright © Samera International Ltd. All rights reserved. There are many reasons that a dentist would consider buying an already established practice. It is important to research the right solicitor for your transaction. Raising the Finance to Purchase a Dental Practice, Check the Ratios and Find the Potential Profit, Further Information on Buying a Dental Practice, Click here to find out more about registering with CQC, Click here to watch our free webinar and find out more about financing your first dental practice, Click here to find out more about property finance, 10 Mistakes to Avoid When Buying or Setting Up a Practice, Buying Multiple Dental Practices – What to Consider, The process of due diligence when Buying a Dental Practice, 10 Essential Cyber Security Steps for Dentists, Fees and Cost of Buying a Dental Practice, Top 10 Mistakes to Avoid When Running a Dental Practice, 5 Quick Tips when Buying a Dental Practice, Profit growth with the Samera Scale System, Why Now May be the Best Time to Refinance, Your earning history as an Associate Dentist. do you own your own house or rent? Out of those active patients, what are the ratios between check-ups versus treatments? That will give you a birds-eye-view of the type of work and, therefore, cash flow you are inheriting. Click here to find out more about what to look for in a dental accountant. However, with the right dental practice sales agent like Samera, you will be able to purchase your dental practice in less time. For further information relating to the legal aspects of a practice purchase, contact John Grant on 0113 834 3705 or visit www.goodmangrant.co.uk. This guide contains an overview of the considerations you need to make in order to successfully complete your purchase. However, this isn’t the best form of transition for everyone. The practice purchase checklist. But opting out of some of these cookies may affect your browsing experience. Due-diligence 3. Gain a clear understanding of the health of the practice. Years of your practice purchase, contact your state dental society in England and Wales 10711620 their own.. 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