Buying A Dental Practice
Why is buying an existing dental practice a popular way to get started in private practice? There are a number of distinct advantages to purchasing an existing dental practice including, but not limited to:
The most obvious is the immediate cash flow generated by an ongoing profitable practice. Many purchasers have high student loan debt to pay off and established doctors have a lifestyle to which they are accustomed. This immediate cash flow can satisfy their monetary concerns! We have found that many, if not most, associate positions will not generate enough income to pay off student loans and provide for an adequate lifestyle.
In recent years, the strength of the dental market has instilled in lenders the confidence to finance 100% of purchases. This means a doctor can buy the practice with nothing down and get additional working capital. We will help you locate the lenders, complete the applications, and supply the practice financial pro-formas that the lender requires. We have long and extensive experience in dealing with the lenders and we will guide you through this process.
Established patient base: It takes many years of frustrating work, referrals, advertising, and networking to build a solid core of patients. When the transition is handled correctly a practice purchase gives you an immediate patient base that may have potential for expansion. Through our transition and management team we can help you expand the practice.
Existing office space: In recent years the booming economy has led to booming prices in the cost of finish out of a dental space. In most cases Landlords will contribute only a small percentage of the total cost leading to a substantial investment by the doctor in the landlord’s building! When you purchase a practice you save that $60,000 to $150,000 finish out cost.
Established location: Patients, like all humans, are creatures of habit and like to deal with “knowns”. If the practice is well located and is easily accessible, patients will not want to change.
Established phone number: Imagine how many families have the practice number in the home directory.
Established Staff: Frequently, purchasers have very little management experience. A well-trained, knowledgeable staff is vital to the health of the practice and invaluable in the transition. We recommend and provide a transition service to help the doctor and staff get off to a productive start.
Other Advantages include, but are not limited to: established marketing plans, established referral base, active recall system, all fee-for-service patient base, in-place equipment, and a hard to obtain physical location.
When you do decide to purchase a dental practice, there are a number of ways to structure the transaction:
The Seller may leave after a short transition.
The parties may agree that the seller will stay for some specified time as the associate.
There may be some kind of "earn" in for all or a part of the purchase price.
If we are representing the seller, the purchaser pays us no fee. When we do represent the Seller it is our belief that the transaction should be fair and equitable to all concerned. We strive for a win-win situation for both the purchaser and seller.
With practices listed by the seller or other brokers, we can represent the purchaser and assist in negotiating a fair price, financing, lease negotiation, and the transition of the practice.
In many cases we have acted as a facilitator to help the purchaser and seller complete the transaction, This usually occurs when the purchaser and seller have already “found” each other and do not know how to proceed. A facilitator technically represents neither party but assists in establishing a price, documentation, financing, closing the transaction, and transition.
We are affiliated with brokers nationwide and can assist in locating a practice in any state.
CONTACT US for a free consultation to determine your needs!
