How Do You Buy A Dental Practice? Here’s How
Buying a dental practice is actually very challenging, however, a lot of investors do it mainly because of the profit potential. How do you buy a dental practice? The first step in the process requires due diligence (with emphasis on diligence).
You need to make sure you know what you’re getting into before deciding to buy a practice and make an offer to the owner.
We recently talked to different companies that have purchased dental practices and questioned them the things they wish someone shared with them about taking over an established dental practice.
To have a sense if a practice is valuable enough to be worth it, a prospective buyer needs to consider the patient charts, which could include one chart as a preview and a random sample of charts to have an idea of patient demographics and how often they visit. There’s also the matter of finding out if sufferers pay with cash upfront or with insurance.
Getting a good picture of the patients and how the practice earns its money allows investors to plan accordingly, with less surprise in the future. If you’re interested in buying a dental practice though, you should know that you won’t fully know what you have bought until you get it.
But patient information aside, the more important figure to consider is the cash flow. If you have a practice with a great cash flow, then you do NOT need to haggle over small price differences . When the owner asks for $650,000 but you only want to spend $600,000, you’ll be missing out on a great opportunity if you insist on your price. If the cash flow is good, suck it up and just pay more.
To ascertain the cash flow, you’ll need to pay close attention to monetary information and data, for example, d which treatments are attracting by far the most earnings, and if you will be capable of carry on supplying these treatments.
Another thing you need to find out when buying a practice is the reputation of the dentists associated with the practice. Remember that a dental practice is only as good as the reputation of its dentists, and if it’s bad, you’ll be inheriting the problems associated with it.
When you’ve done all your research and you still want to buy a dental practice, go ahead and make an offer.