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So, youâ€™re thinking of going into business for yourself? We get it, the appeal of owning your own practice and being your own boss is strong. But before you begin shopping around, there are some important things you need to know. Here are 9 tips that will help ensure your practice acquisition goes smoothly.
If being a practice owner is something you want for yourself, here are nine tips to ensure that the process goes smoothly for you and the seller.
Purchasing a dental practice is a major decision in the career of any dentist. And it’s one that shouldn’t be entered lightly. Before you proceed, it helps to know what you may be getting yourself into. If you are considering acquiring a dental practice, keep in mind the following thoughts and suggestions as you proceed.
1. Practice in an area where you can make a good living. Make a logical decision that is economically sound, not emotionally driven. Sometimes it’s better to practice in one area, live in a second area and play in a third area.
2. Don’t worry about how old the dental equipment is right now. You are not buying dental equipment, you are buying a business opportunity (the practice is a business). If the practice is profitable, you will soon be making enough money to buy all the new equipment that you could possibly want, and you will be able to afford it!
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3. Don’t worry if you think the seller’s clinical procedures are not up to par with yours. If you are a more thorough clinician than the seller, that will create more production income for you when you take over the practice. The best practice "deals" are those where the seller has been running a maintenance practice and not doing all the latest "sophisticated" procedures. Un-diagnosed treatment means more opportunity, a diamond in the rough, so to speak.
4. A “good deal” is one that is fair to both parties, so beware of a deal that seems weighed heavily in your favor. This might mean something is wrong with the practice you are considering acquiring. You should consult with your Practice Transition Consultant, who has the expertise to properly evaluate the situation objectively.
5. Don’t negotiate with the seller, talk to an expert if you have a problem with the practice. Sellers are understandably sensitive about the operation and value of their practice. If you try to negotiate a deal, the seller will resent you and even if you conclude the transaction, the seller may try to get even later, and you will lose in the end.
Click to the next page for tips six through nine.
6. Don’t be short-sighted. Purchasing a practice is not a $500,000 or $1,000,000 decision. It is a multi-million dollar decision. If a practice is grossing $1,000,000 per year and you expect to practice approximately 35 years, then, without adjusting for inflation, it’s a $35,000,000 decision. Don’t lose millions by getting hung up on nickels and dimes and end up upsetting the seller. The seller is the primary factor that will determine the success or failure of this practice acquisition.
7. Compliment the seller! Show respect for the seller and his/her practice. Yes, the seller may not use all the latest tools and/or methods, nor have they kept up like you think he or she should, but don’t be too hard in judging the seller. Think about how you might be viewed by a potential purchaser 30 years from now when you are ready to sell. A seller who thinks that the purchaser is great will give a lot more support in the long run than the purchaser who comes across as a know-it-all.
8. Respect the seller’s time. If you make an appointment, be on time.
9. Call your consultant with your feelings about the practice and the seller once you’ve paid a visit to the office. The only way we can serve you best is to have your input and reactions. This helps us get you the practice you want.