December 6, 2017
6 Questions to Ask When Buying a Dental Practice
At Professional Transition Strategies, we have successfully guided hundreds of dentists through the process of selling and buying a dental practice. If you are thinking about buying a dental practice, you will naturally have several smart questions. Here are questions to ask when buying a dental practice.
What should I consider when buying a dental practice?
First, consider where you want to live. Be specific about where you want to live and how far you are willing to commute to work.
Second, think about the kind of dentistry you want to practice and the income you want to make. Consider the income that would fund your retirement and support a comfortable lifestyle. Don’t forget to factor in your expenses such as student loans, mortgage, car payments, insurances, and any other family-related expenses.
It is also important to consider the gross production of the office, collections, overhead, location, and patient charts and reports.
Will you retain the services of the current dentist?
Selling dentists are typically willing to stay on for a period of time to assist with the transition, introduce you to patients and referring doctors, and help you understand the processes of the office. However, you don’t want them to stay around for too long as their presence could interfere with you making the practice your own. We generally recommend no longer than six months.
Is it in the right location?
A key point to consider when looking to buy a dental practice is the demographic profile of the area. This includes household income, number of residents per dentist, and the number of competing dentists. All of these factors will directly impact the practice’s growth potential. Other location-based factors include visibility (pedestrian and vehicular traffic to get new patients), and the proximity to your home.
What type of dental work is performed at the practice?
From general dentistry to pediatric to endodontic to periodontic, it is important to know what type of dental work is performed at the practice you are interested in buying. Similarly, it is important to look at if the hygiene department is under-developed. Practices with underdeveloped hygiene departments give you the chance to increase profitability by shifting hygiene work to a hygienist. This allows you to focus on higher-margin dental work. Further, in practices where dentists regularly perform low-end dental work, there is a big opportunity for the incoming dentist to increase revenue by performing higher revenue-generating dental work. Of course, opportunities like this depends on your dental experience and expertise.
Do the clinic’s hours suit my needs?
It is important to consider the number hours necessary to operate the clinic. That, and whether that schedule suits your lifestyle — especially if you have younger children.
Will the sellers’ staff and patients stay in a transition?
It is very beneficial for the staff to remain in their jobs during a transition. It is equally important that the purchaser wants the staff to stay. With a proper transition, patient retention is in the mid-to-high 90% range for transitions handled by experts, such as those at Professional Transition Strategies.
Overall, buying a dental practice is an intricate process and it is very beneficial to work with an experienced transition company. If you have any unanswered questions about buying a dental practice, Professional Transition Strategies is here help! Please feel free to contact us at any time.