Purchasing a dental practice is a huge step that can reap benefits quickly if you carefully consider your options. Make sure you’re thinking of the important questions to ask before taking steps towards a purchase. We’ve put together 4 questions you need answered before buying a dental practice!
1. What is the cash flow of the practice and is it reliable?
Knowing the information that surrounds the cash flow of the practice will give you insight into the solvency and profitability of the practice at large. The cash that flows into and out of the business goes far beyond what you see on the surface. The practice’s cash flow impacts all areas of the practice including staffing, equipment, and office culture and moral. Diving into the cash flow of a practice before making a purchase can save you from a long uphill climb in the future.
2. Does the practice have an effective transition plan?
An effective transition plan should be detailed and documented so that it’s easy to implement after the sale. Having a detailed plan will save you from unnecessary hassles and expenses that can find their way into a transition. Do you know your staff, present and future? Has the practice followed a plan to keep new patient numbers up or have they dropped the ball? Has the practice gradually prepared patients or will the flip be abrupt? Make sure an effective transition plan is in place before taking the leap and diving into a new practice! Consider contacting an expert to help walk you through the practice transition and ensure your taken care of every step of the way!
3. What is the history of the practice?
Ask questions about the history of the practice. Do you know why the owner is choosing to leave? Diving in deeper to the history of the practice can help shed light on some pretty significant hurdles that may be hard to overcome, as well as potential opportunities. Preexisting issues can cause a lot of headache for the new practice owner if they are unaware of what is expected. Educate yourself on the current owner, the practice’s history (financially and relationally), and reasons for the sale. Knowing the answers to these questions will put your feet on solid ground as you being navigating the transition and moving towards purchasing the practice.
4. Who are the patients?
Knowing the current patients and where they are from will help you identify strengths and weaknesses within the patient population. Patient behavior is especially significant when determining short and long term goals for your practice. Is the ratio of new patients to returning patients significantly unbalanced? Is there a large influx of new patients but retention numbers seem to be lacking? Knowing your patient’s’ typical behaviors and patterns will prepare you for the practice transition!