There are some critically important steps you need to take before you buy a dental practice.
California is a great place to live and own a business, but there are a lot of decisions to make before you actually begin your search.
This page will help you sort through some of those decisions and organize your search criteria.
Consider Practice Location
Begin by considering the type of area where you would like to live. This matters so you can plan a reasonable drive from your home to your office. The more areas you find that are compatible with your lifestyle, the greater the range of opportunities you’ll have to investigate.
Consider the nature of a suitable community that meets your preferences. For example, do you prefer a metropolitan, suburban, semi-urban or rural setting? If urban, would you be more comfortable in a mature/no-growth community, a slow-growth community or one located in the path of projected growth?
Consider Your Needs and Preferences
How should factors such as the following affect your search criteria?
- Raising children, if applicable
- Schools and churches
- Lifestyle/cultural needs
- Proximity to transportation arteries and hubs
- Commute time and traffic patterns
- Proximity to specialists (or GP’s if you are a specialist)
- Affordability index of a community as it pertains to your current designs/needs
- Community infrastructure
- The patient demographic you wish to treat
Determine the Profile of a Practice that Best Matches Your Goals
All practices are not alike. So, here’s a key consideration before you buy: dental practice profile. What do we mean by this?
Profile refers to a variety of characteristics that make a business unique: its age, earnings, nature of the patients, staff, infrastructure, physical space, etc. There is no “best” or “worst” when it comes to practice profile. It’s simply a matter of difference and which best fits you.
For example, long-established practices typically have older delivery systems and less efficient office designs. Yet they are often rich in patients, reputation and staffing. A key benefit is that they can enable you to acquire that desired patient base and experienced staff while still letting you focus on building the physical plant you envision.
Younger practices typically have newer delivery systems, technology, more attractive decors and better designed suites. However, the patients may be economically restricted and the staffing more transient in nature. A newer business provides the facility and delivery systems you want while giving you the opportunity to better shape the practice’s future.
And then there are those well-established practices that have redesigned suites and upgraded delivery and management systems. And the well-established practice with everything in place allows you the ability to practice at your optimum level immediately.
Think about Your Goals, Practice Profile and Desired Investment
Determine your goals. Do you want a practice that is extremely productive, generates healthy profits and is strongly entrenched in its community? Are you willing to pay the price that such a practice commands?
Or, do you have the luxury of buying a practice with excellent upside potential that you can develop over time? Is your goal to minimize your investment?
What is your threshold for monthly production goals along with your tolerance for debt and risk? Think this out carefully. It is very important that you never purchase more practice than you can chew, swallow and digest.
As you investigate a specific practice, develop a model of exactly what is required on your part to make this acquisition work.
Besides selling and delivering dentistry, be mindful of the time required to manage the practice.
Don’t acquire a business you are not properly prepared to manage and operate at this point in your career. Remember, it took your seller many years to ramp the practice to its current performance level.
You need to ask yourself if you can jump on the established treadmill without tripping and falling. This is a very important question you need to answer. There are no refunds for the acquired practice that is now performing at 70% of its pre-purchase levels.
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