9 Questions Purchase Dental Practice | Dental Practice | PMA

So you are ready to take the big leap and purchase a dental practice. Congratulations! You even have a practice in mind. But now what? Ask yourself the following questions to help determine your next steps. Your answers will greatly impact your future as you get ready to make one of the most important decisions of your professional career.

  1. What is the prospective dental practice really worth?  It’s simple, it’s worth what a buyer is willing to pay for it.  One thing you have to keep in mind is that price is what you pay and value is what you receive so ask yourself, do I see the value in the practice I am looking to purchase for the price the seller is asking for, if so then the price is right.  Too many buyers focus on the price instead of focusing on value the practice will bring to them.
  2. Can you afford the deal? Talk to someone who specializes in dental practice transitions to calculate future cash flows based on the price of the practice, the financing terms and your projected salary amongst other things.
  3. Is the seller willing to be a resource for you? The seller has probably been with the practice for a long time and would be happy to share information and advice with you. He or she also has a patient base that will be left behind, and no one wants to let them down. Make sure the seller is willing to help you get adjusted and start this new venture as a success.
  4. Are you going to purchase the building the practice is in or rent it out? The seller may own the building and not want to include that in the deal. If that’s the case, be sure you have a lease agreement in place so you can continue to use the building as a dental practice space.
  5. What are you going to do for financing? There are a lot of banks and financing options out there. Be sure to compare interest rates and terms to get the best option available to you. Also keep in mind that it’s important to use a bank that you are comfortable with and know you will receive stellar service. If you want to get really creative, consider asking the seller if his or her practice could finance the deal. The advantage to this option is that the seller will have a vested interest in your success.
  6. What will the purchasing terms be? Again, you have a lot of options. Are you going to purchase 100 percent of the practice in the first year, or are you going to buy a smaller percentage each year over time. These important factors need to be negotiated. Dental practice transition specialists can walk you through your options and explain what the implications could be on you and your new dental practice.
  7. Is the current dentist going to stay onboard?  As part of the deal, you want to define the length of time the former owner is going to stay on to help with the transition. The last thing you want is a dentist that sells the practice and is out the door the next day. However, you wouldn’t want a dentist who sells their practice and then sticks around too long. Find a balance and agree to it. Your patients will be better off, and so will you.
  8. What is the alternative? If you don’t purchase a dental practice from this existing owner, what are your other options? Is there another practice that interests you? Would you consider starting a practice from scratch? Similarly, look at the seller’s options. Are you the only prospective buyer, or does he or she have other options? The more options you have, the more negotiating power you have.
  9. How is the deal going to be structured to maximize tax savings? How much of the sales price will be allocated toward goodwill and how much will be allocated toward assets? This question will greatly impact your tax liabilities. Talk to a dental practice transition firm with a CPA in order have the right people on your team to assist you in the negotiations.

You have made the initial decision to purchase your own dental practice, before moving forward, ensure that you can answer these nine questions … and that you are happy with the answers.

Purchasing a dental practice is a big decision, don’t go at it alone. Contact PMA Practice Transitions, we can assist you throughout every step of purchasing a dental practice.


Matt Scherer | PMA Practice Transitions | Ohio | Pennsylvania Published by Matt Scherer
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