Before purchasing a dental practice, first put your team in place. This important step should occur even before you begin your search in earnest.
Why? Because you need to be in a position to act and respond immediately when you contact a buyer.
Remember, there are usually other dentists seeking opportunities like the one you found!
It’s often a “seller’s market,” as they say in real estate, which can even mean that the sale price goes higher than the original asking price.
At the very least, most sellers are committed to finding a suitable replacement—not just a buyer—to take over their practice. They spent years working on the business, and want to leave their patients in good hands.
So, you should be prepared to move quickly. That means having a qualified team in place to support you as you move through the acquisition process. These players include an accountant, attorney, insurance agent and lender.
However, before you pick up the phone to dial your usual providers, consider this. Engaging your fraternity brother/sorority sister, your dad’s CPA, your best friend or that accountant who has been preparing your 1040 over the years is not the wisest decision.
Why it’s Important to Hire Dental Practice Specialists
It takes time to learn about the dental industry. General knowledge is not sufficient when it comes to analyzing financials, reviewing legal documents, configuring insurance and structuring a loan for a dental business.
So start interviewing providers who specialize in the dental profession before you contact a buyer. Align yourself with a dental accountant who can be your practice and financial advisor long after the purchase.
You should also align yourself with an attorney and an insurance agent who specialize in the dental profession. Hopefully these will be relationships you maintain for a long time.
What to Consider about Lenders when Purchasing a Dental Practice
It is never too early to start talking to lenders who specialize in making loans for practice acquisitions. Terms and conditions vary. Available loans are from 7-to-15 years in duration at fixed interest rates. All lenders require life insurance policies. Some require disability policies.
If your lender does not require a disability policy, you should still obtain one for you own financial security.
In addition, you need to understand if there are pre-payment conditions in a loan you may be considering.
As an experienced dental practice broker, we can help by making referrals to qualified lenders whose expertise in the dental industry has already been vetted.
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