Buying a Dental practice is one of the major financial decisions and a turning point in a dentist’s career. It can be quite overwhelming with a lot of factors to consider before acquiring your own dental practice. So, here we have come up with a curated list that needs to be followed for a perfect deal. Before diving into the checklist let’s check out how advantageous it is in opening your own dental practice.
Why should you buy a dental practice?
While working as a dentist provides more time off, being a practice owner provides you a better experience and also to run at your own time with extra pay. Running your own business provides better challenges while holding a lot of responsibilities too. With the right kind of patients coming in and with skilled employees to help you run the show, there are few checklists to be considered for better business.
1) Submit a LOI to the seller
The first and foremost step towards buying a dental practice is the letter of intent (LOI). For a successful transaction, it is important to set up clear and detailed expectations. The letter of intent makes sure the buyer and the seller agree to certain terms addressing the dental practice purchase.
- Purchase price
- Included and Excluded assets
- Lease agreement
- Access and due diligence
- Accounts Receivable
- Closing date
After discussing each term, submit a signed letter of intent to the seller to proceed further.
2) Build a team of expert dental advisors
Purchasing a dental practice is quite a challenging process. No matter how planned you are, it is recommended to set up a team of expert dental advisors to succeed. Even a highly skilled attorney or accountant may not be familiar with the dental industry. So, assembling a team of skilled dental advisors will help you in a smooth dental practice transition. Set up a team of professionals with the dental advisor team roles like Dental CPA, Dental attorney, Dental Consultant, Dental brokers and Dental Tech advisor.
3) Choose a Bank and apply for a practice purchase loan
Another key factor is to finalize the financing to buy a dental practice. Here, your Dental CPA/attorney will suggest you the best lenders. Compare the financing option and evaluate at least a minimum of two different loan offers with your dental attorney to find the best available option. Apart from that, it is also necessary to start the pre-qualification process early to have a clear understanding of your budget and the chances of your loan approval.
4) Plan your Buyer’s practice visit
Before buying a dental office, it is essential to make a due diligence trip. You can fully examine the practice and evaluate the location, equipment, accounts receivable, signage, decor, etc. This helps you envision whether the practice is suitable for you to attain your goals. Moreover, you can clear any queries regarding the practice information with the Seller.
5) Get secure insurance policies
Obtaining insurance for your dental practice is a must as it helps in securing certain types of coverages for your new office. So, ensure you have all the following policies
- Disability insurance
- Life insurance
- General liability coverage
- Business property coverage
- Malpractice insurance
Still choosing the right policy is not an easy task. So, you and your advisory team can discuss and pick the right policy which fits your business. Also, it is advised to review your coverage on a regular basis to reflect your practice’s current growth
6) Ensure Merchant Services account is set up
Setting up merchant services to provide ease of payment to the patients is one point of being in business. Having a credit card reader to accept the debit and credit card payments helps the customers to get the payment done without any delay. Check with your accountant on the dental-specific merchant service and get your setup done quickly for the betterment of the patients as well as for business.
7) Review Dental practice purchase agreement
Review the practice purchase agreement with your Dental attorney and CPA. Check each section and verify the purchase price, restrictive covenant clauses, and other details that are addressed in the agreement. So, it is important to have a clear understanding as the purchase document will officially transfer the ownership of the dental practice.
Have questions about buying or selling your dental practice ?
Email info@DDRDental.com or call 800.930.8017