There are many benefits associated with purchasing an existing dental practice rather than starting one from scratch. If you’re looking to purchase a dental business, you may be looking at current dental office listings. While there are times when you cannot tell that there are red flags until you dig deeper, there are some things that you can tell just from the listing itself. Here are three red flags in current dental office listings.
1. The Price
One of the biggest red flags to be on the lookout for in current dental office listings is the price. As a general rule of thumb, According to Moneywise, a business that earns $100,000 per year should sell for about double or triple that amount, or $200,000 to $300,000. If a business is priced too low, it may indicate that there is a problem with the business that isn’t being disclosed just yet. If the price is too high, you may have owners valuing it way too high or not really sure about selling the business.
2. The Location Is Problematic
Another red flag that you may be able to identify in just the listing of the business for sale is whether the location is problematic. If a listing catches your eye, do some research on the location. If a business is located next to a mall, pay attention to whether that mall or its main anchor tenants are closing in the near future. That can affect business. Also, look to see if any road construction projects are planned in the area. Business owners may try to sell their business before upcoming changes in the area affect the business.
3. Not Being Transparent With Their Dental Team
Lastly, be wary about listings that state not to call the dental office and inquire about the sale or not to talk to their employees about the transaction. A great dental practice keeps their employees in the loop, instead of keeping them in the dark.
If you’re looking to purchase a dental business, you may be perusing current dental office listings to find opportunities for your purchase. Unfortunately, though, it can be challenging to take on this task on your own. This is where a professional who helps with buying and selling dental practices can come in handy. Our team is here to help you with either the buying or selling process, including helping buyers identify red flags in dental office listings. Reach out to our team at Professional Practice Sales today to learn more.
