According to a Henry Schein article on dental practice transitions, the fee for an attorney to look over the Practice Sale Agreement should not exceed $1, 000. I couldn't agree more, especially when you're looking at purchasing a practice that has a pretty strong track record, some good revenues. I'd be willing to bet good money that you, yes you (and your student loans), can get a practice loan. Similarly, Dr. Adrian Vande Merwe, DDS PC, who has a cosmetic and family dentistry practice in Bountiful, Utah, tells us the following: "It's true that you can be successful anywhere. You must be strategic about accomplishing your ultimate goal of practice ownership. Third, don't negotiate directly with the seller; you may be damaging the very thing you are buying, the seller's goodwill, trust, and cooperation. Thus, buying a dental practice may seem like the obvious choice, but it does have its drawbacks that must be considered before taking the next step. If there are some specialty cases, the mentor likely needs to handle those for a while until the new owner is trained properly to take them over. Dr. Thornock explains how he learned this lesson the hard way: "A practice broker may hand you a portfolio with facts and figures about the practice, which may or may not be very deceiving. Find someone who is actively engaged in making you fiscally sound. If you want to own a practice right away after graduation, purchasing a practice from an established dentist (who often wants to retire) can be the best way to do that. Positioning Yourself Financially to Purchase Your First (or Next) Practice. That's why Sarah counsels her clients to give themselves ample runway, starting the savings process anywhere from six months to a year in advance of the purchase. Today, one year after the purchase of my own practice, I stand proud as the owner-dentist of my dental clinic in Beaverton, Oregon. You want to talk to your accountant about these important financial implications of acquiring an existing dental practice.
Patients who hesitate to accept the new doctor generally take the risk of coming back if they can identify with the original staff members. Sometimes those ideas match reality; often, they do not. Of course, this checklist is just a start. Once the buy-in is accomplished, there is a partnership or an operating agreement that governs the relationship. If you don't know how to read financials, then we strongly recommend that you work with an attorney or accountant who does. When acquiring a dental practice, you will, of course, receive information about the practice from the selling party. Having an experienced professional on your team will ensure you're getting a fair deal. Therefore, it is particularly important that you, as the purchaser, regardless of the practice, conduct a patient chart audit. Buying a dental practice right out of school now. We talked to several dentists who have purchased dental practices and asked them what they wish someone had told them before the purchase. Whether you're wondering how to sell a dental practice or how to buy a dental office, you need the proper guidance to help make the process as smooth and successful as possible. As the Italian philosopher Pareto once said, "Eighty percent of your results come from twenty percent of your activities. " In this article, we will review the benefits and drawbacks of buying a dental practice, but we invite you to explore those of starting a dental practice. Avoid patient acquisition and intake.
But what I will tell you is even with all that student loan debt… let's say you've been out for a year or two… you can afford to buy a practice. But wait, if you subtract the loan amount from the profit you have left from the business, you have $253, 815 – $53, 815 more than you would have as an employee. What are the lease terms? We call these arrangements ambiguity-ships, because of the ill-defined parameters that govern these relationships, as well as the lack of an equity investment. Why You Should Buy a Dental Practice BEFORE Your Student Loans are Paid Off. To find practices for sale, seek the help of a dental practice broker. Before Closing, keep in mind that they are the seller's staff treat the seller and staff with the utmost respect.
How can I pay the least amount of money for a practice, and at the same time be fair to the seller? Fourth, show respect to the seller by being on time and by not being judgmental on the way the practice looks and how it's run. Realize the quickest way for you to pay down your student loans is to own a good dental practice as soon as possible. Buying a dental practice right out of school for a. Too short of a transition period may result in lost patients and other problems, but if you take too long, the seller may reconsider their plans to sell. In which case, it is more difficult for the seller to keep the money–or for the purchaser to complete the sale–if one or more of the contingent items are not acceptable to either party.
After graduating dental school, most dentists opt to become associates in the various private, corporate or public service practice settings. Where should I look for practice opportunities? What You Need to Know About Buying a Dental Practice | Panacea. Obviously, a practice should not be purchased without first studying sufficient data. Others are more inclined to move faster and make moves toward ownership right after graduation. "Dentistry is more fun when you are a good leader.
Actually, banks can and frequently do lend to newer dentists with large student loan balances. It is no mystery that a well-managed practice with an excellent staff and high patient satisfaction is worth more to you as a purchaser. Most skills that we learn post-graduation must be acquired via CE courses. Buying a dental practice right out of school in virginia. Concurrent with the Practice Sale Agreement, you need to also arrange the lease for the dental office which may or may not include an option to buy. It can also potentially work against you because people may worry (or even assume) that you won't live up to the same standard. This method has proved best for middle-aged dentists who are still experiencing excellent growth and who could use another set of committed hands in the practice. Find your niche and refer what you don't like to do out to a specialist. This can create security in knowing the practice's historical performance and growth potential. "You won't fully know what you have bought until you get the practice but getting as good of a true picture beforehand will allow you to plan accordingly, with fewer surprises in the future.
All too often, unrealistic ego-inflated appraisals and poorly structured transactions have caused much heartache instead of creating what could have been an excellent practice opportunity. Originally Published September 10, 2016. Currently, buyers of general practices are paying 46 to 70 percent of the most recent 12 months collections. We suggest the following four-part system in developing a win-win transaction with another doctor. In this transaction, one of the parties moves their practice to the other party's facility. How much you want to spend.