What you need to know before buying a dental practice
There is a lot that goes into buying a business and dental clinics are no exception.
This guide will provide a framework to buying your first dental clinic.
Firstly, take your time to find a dental clinic which currently operates in a way that’s close to how you want your future clinic to run.
At Steep Dental Marketing Australia we can help you with your purchasing decision with a digital pre-purchase audit!
Ensure the clinic receives the type of patients you want. It’s easier to get more of the same patients as opposed to going after a completely new market. This means if you buy a clinic that has previously not specialised in dental implants, it will be a lot of work to build the implant dentistry side of the business also when doing Dental SEO and Dental Website Design.
If you have determined that it’s time to buy a dental practice, there are a whole lot of actions that you could take that can ensure your will purchase the clinic that is right for you.
Here’s a checklist you need to think about while buying a Dental practice.
Know your ideal dental clinic location
A couple of key metrics to look at when it comes to clinic location:
- Suburb population
- How far patients travel
- How many competitors in your suburb
- Is the new clinic located on a main street?
- Is there space and good visibility for signage?
We can run this analysis for you today. Contact us.
The best first step would be to define what geographical area you are interested in.
It is sometimes a huge area, but keep in mind that bigger regions hold many different demographic groups. You want to understand if they all are for you, or in the event that you would like to concentrate on particular ones inside that area.
If you have an existing clinic, it can make sense to open another clinic in close proximity so that your dental staff can work shifts in both clinics.
Projected dental clinic revenue
We suggest that you consult with an accountant to read through the books of the prospective clinic you are looking to buy.
Of course it’s important that the clinic has sustainable revenue, but you need to dig deeper.
What were the services with the highest profit margin and how many of these services was this clinic selling on a monthly basis?
Do you have a marketing plan that can help you see more dental implant patients for example?
If you do not intend to aggressively grow the clinic, the historic revenue allows you to estimate how much income is going to probably be there for debt servicing.
In case you intend to expand right away, the gross profit enables you to understand how much you will want to invest in the growth, in addition to the buy expenses, until you see a return on your investment.
Deciding whether its lease or possessed property
Another large decision you will face is whether to purchase the office area or lease it.
Since you often won’t have an option on several listings, you might observe both choices in the industry. This is mainly about your long term goals and the way financeable you are.
If you would like to keep the office for many decades, and you will be able to manage it, then owning your property can prevent any significant landlord headaches in the future, checkout australia.gov.au when buying property.
Transferring a current office is rather pricey and to be avoided if at all possible. But if this really is a measure to something else and you’re unsure how long you will get it, then it can be a lot more economical to rent from the short term.
In certain areas, the cost of property may prohibit you from buying even if it’s a fantastic idea.
Seek for professional advise
Buying a practice may be your most important financial and skilled choice, requiring an in-depth evaluation of a wide range of issues. It is an excellent idea to select your trade lawyer prior to getting into the buy procedure.
Again, like lenders, you will discover lots out there. It’s most important to choose one which you have a fantastic working rapport with and with a lot of expertise in dental arrangements. Due to the multitude of factors you have to consider, this can be an overwhelming process.
So, after locating a practice to buy, the initial step would be to collect the following team of specialised advisers:
- Dental Attorney
- Dental CPA
- Transition Consultant (the buying dentist’s advisor )
- Professional Practice Lender
Once you discover the home-run clinic and negotiate a purchase price, you’ll want to fill out the practice of due diligence checkout . Having the ideal team constructed can make sure that you receive through the buy quickly and thoroughly without any mistakes which will prove expensive later on.
So, how ready are you? To a lot of dentists, it feels like overkill to start on these steps before finding an office. Frankly, these dentists may miss out on great practices. High-quality dental practices have high demand, and you need to act quickly to secure one as soon as you locate it.
In addition, a transition specialist will be able to assist you in finding your right office a lot more effectively in the event that you can be specific about what you are searching for. There are countless”buyers” out there which have been looking for many years and still havent found what they are searching for. This is because they have yet to have depth about the process in a market full of buyers which are serious.