Preparing to purchase a dental practice is a big decision with a lot of things to consider. So where do you start? We’ve broken down 5 important things to avoid when looking to purchase a dental practice. Take time to read through these common mistakes made by Buyers and learn more about how to effectively prepare for the purchase of your new practice.
A Seller That Isn’t Ready to Sell
A dental practice is often a Sellers most valuable asset. Years of hard work and dedication have grown the practice into what it is today, and the idea of selling is often both exciting and terrifying for most practice owners. Avoid making deals with practice owners that seems to hang on a little too tight. These are common signs that a practice owner isn’t quite as ready to sell as they might think
- Sellers that want to be kept under contract in the practice for a minimum number of years
- Steep practice costs with a continuing income from the practice
- An unusual string of demands that prolong the transition process
- No transition plan has been prepared or in place
Skipping a Formalized Agreement
Although it may be tempting to avoid the costs of preparing a formalized agreement within the transition process, it is imperative for both the Buyer and Seller to take this necessary step. You may save on upfront costs initially, however the cost of a last minute “change of heart” could cost you more than a formal document ever would. Formalized documents help to keep agreements and conversations clear. Without one, both parties could come back remembering particular key conversations differently and ultimately leading to much more confusion and frustration in the long run.
Not Considering Comfort
In the busyness of a transition it’s common to find a Buyer forgetting to think through the practicalities of a potential practice. Is the practice close to home and is the commute something I want to do everyday? How manageable are the current clients and is the community one that I feel comfortable working with? These and other questions are ones that should not be overlooked when making the decision to purchase a practice. Comfort plays just as important a role as the many formal details that surround a practice transition. Find a professional transition expert that can help you think through and ask the necessary questions!
Poor Due Diligence of Client Files
Understanding what patients will generate certain income is key to having a firm grasp of the value of the practice. While some patients may come in once a year for a routine cleaning, others may come in for large cases and thus generate more income at one time. Knowing what patients are classified as within a practice will give you greater insight into the cash flow of the practice, the future decisions you will make as the Practice Owner regarding patients, and the overall practice strategy.
Doing it Alone
Having a team of professionals on your side throughout a practice transition is crucial to the success of a smooth purchase. Transition experts handle everything from the professional, legal, and financial aspects of a transition. Important items that can often be easily overlooked are prioritized to ensure that a Buyer is getting the most from the practice. Don’t walk through purchasing a dental practice alone, and instead connect with an experienced team of professionals you can trust.
If you’re ready to take the next step in purchasing a practice, connect with our team of trusted transition experts!