Buying the wrong dental practice may create a lot of hassle for you in ways that you probably can’t even imagine. Therefore, you must consider a lot of important factors before buying one. The purchase decision should be made with a team of dentist, accountants and lawyers because believe us, you’ll need it.
The financials will include a lot of things. The most common documents that need to be evaluated by the purchaser are valuation report, profit and loss statement, detailed balance sheet, income tax, returns, overall expenses and some other relevant financials based on your needs. Along with that, your team and the seller need to decide on a payment plan; basically how the EMI plan or contract details are going to be.
Legal obligations are not generic rather they are specific to each dental practice. For instance, for a dentist in Chicago, the restrictive covenants are quite different from rest of the United States. As a purchaser, you should keenly check non-solicitation agreement (if any), contract details, liabilities, leasing financing options and lien financing options to name a few. In short, you would need your lawyer and accountant to keep their eyes and ears open throughout the time.
The location is important to assess for two major reasons. One, to evaluate the lease or lien of the area and two, to understand the availability and demand of the patients. For example, if you are a dentist in Chicago and planning to purchase a dental practice there, make sure that you look into the demographics carefully. This includes their housing cost, purchasing power, tendency for check-ups, overall business situation etc.
It is of utmost importance to understand the perception and behavior of patients in the particular locality. What is their main priority for dental services? Is it the expensive equipment, customer service, dentists’ behavior or something else?
A dental practice is not just a mere combination of equipment, land and offices. Carefully assess if the place has a good-will or not and how will the payment negotiation occur based on the good-will and overall quality of the dental practice.