Purchasing a dental practice can be a complicated endeavor but we are here for you every step of the way! By considering the steps we have lined out below, you will be on your way to a rewarding career as a practice owner.
Before you start the process, you should consider a number of factors while also asking yourself some questions below:
So after many considerations, you have sights set on purchasing your ideal practice. The next step in the process is to consider locations while also conducting a demographics report.
When you are ready to purchase a practice, one of the most significant aspect of your new business is the location of where you'll practice. You will want a location that is easy for your patients to find and ideally, a location that will do some of your advertising for you.
Key attributes to consider:
If you would like to continue learning about the tips to selecting the ideal location for your dental practice, read our blog on How to Find and Select the Ideal Location for Your New Dental Practice. Next, we will explore the importance of demographics in aiding your ideal location.
Another important aspect not to be overlooked is the demographics of the area you are interested in. By putting together a comprehensive demographics report, you can gain a better understanding of your targeted area and the patients your office would be looking to treat.
Elements to consider:
For an in-depth look at what to consider while conducting your demographics report, read our blog, How Demographics Impact Your Dental Practice Location.
After analyzing locations and conducting a demographics report, your next step is to hire your advising team.
Purchasing a dental practice can be a lengthy process and you will want a team of advisors that will help you through every step of the process. They will also help guide you in making wise financial and legal decisions to help protect you from potential roadblocks and compliance issues.
Who do we suggest you hire?
To learn more about the team of advisors we advise hiring, continue reading our in-depth article on Selecting Your Advising Team When Buying a Dental Practice.
Your next step in the practice purchase process is your letter of intent.
The letter of intent is one of the first documents you will be need in order to start the process of purchasing a dental practice, as it details your interest in buying the practice and sets out some of the basic business and economic terms.
Items to consider in your letter of intent:
For more of an in-depth read on the importance of a letter of intent, continue reading our blog on Key Things to Consider When Drafting a Letter of Intent.
After submitting your letter of intent, your next step is to do your due diligence. Conducting your due diligence is important to confirm that the expectations of the proposed purchase are in line with what is actually being sold.
Upon acceptance of your letter of intent, it is your responsibility to make sure that you are reviewing every aspect of the practice before you purchase it.
The three types of due diligence are:
Another important aspect of the due diligence process is to set up an in-person visit with the seller to discuss any questions or concerns you might have regarding the practice.
Additionally, you should take into consideration whether the practice you are interested in purchasing is the right practice for you. As you identify a particular practice you should also look out for red flags.
To continue reading about due diligence and what it entails, read our blog on Due Diligence When Purchasing a Dental Practice.
Also, if you're planning an in-person visit with the seller, read Questions Buyers Should Ask Sellers During the In-Person Visit.
Upon reviewing your due diligence evaluation, your next step is to draft and submit a purchase agreement.
After submitting a letter of intent and doing your due diligence, the next step to finalizing your purchase is to submit a purchase agreement. A purchase agreement is important because it ensures what both parties agreed to is included in the agreement.
Other items to consider that wasn't mentioned in the letter of intent:
For further reading, consider reading our blog, Purchase Agreements: More than Meets the Eye.
Upon submitting the purchase agreement, you should have a good idea on whether you're assuming the seller's lease or purchasing their property outright. With that in mind, we dive into leasing and real estate.
With any tough decision, there are advantages and disadvantages to every option. The same can be said when determining whether you should buy or lease commercial space for your dental practice. Other factors to keep in mind is whether the seller owns their space and if they do, are they willing to sell their space along with the practice itself. If you can purchase the commercial real estate for your practice then go for it, but if you are not able to, leasing space is a great option as well.
Securing a lease with beneficial terms is critical. The 5 tips to a successful lease negotiation are:
To continue reading about the lease negotiation process, read our article on The 5 Tips to a Successful Lease Negotiation.
If you are considering purchasing commercial real estate instead of leasing, read our section on real estate below. If not, you can skip to the next section which is corporate formation.
Purchasing real estate has more advantages than disadvantages but here are few things to consider:
To learn more about purchasing real estate, read our article here.
Your next step in the process is incorporation. Incorporating will help separate yourself from your practice.
Correctly setting up the legal structure of your practice can help protect you by separating yourself from your dental practice. Also, incorporating can affect your tax structure.
Things to consider when setting up your legal entity:
For more of an in-depth read on corporate formation, read our article on The Legal Requirements of Starting Your Dental Practice.
After setting up your legal entity, your next step is to obtain insurance for your dental practice.
Before opening your dental practice, you need obtain several types of insurance to safeguard you and your practice.
Below you will find the types of coverage you will need:
To learn more about the types of insurance coverage you will need, continue reading our blog, Obtaining Insurance for Your New Dental Practice.
Now that you have been covered for an insurance standpoint, your next step is dental credentialing.
Before you start seeing patients, you need to start your dental credentialing by enrolling with dental insurance companies.
What are the steps to enroll?
Upon getting certified by dental insurance companies, you should now hire your team members.
Depending on the situation you are in, you may choose to hire the existing team members of a practice you are purchasing or you many want to completely hire your own.
In most aspects, it is in your best interest to hire on the team members of the practice you are purchasing for a number of reasons, such as to ensure a smooth transition, familiarity with the processes, and the bond shared with patients. However, it is possible not all team members might be a good fit. To gain a better understanding of evaluating team members, you can view the 7 Tips to Successfully Transitioning Team Members After a Dental Practice Purchase. In addition, we've listed a couple of the tips below:
To assemble a winning team for your practice, consider these tips:
For more of an in-depth read on assembling a winning team for your practice, read our blog.
Upon hiring your team, it is wise to implement your own employee handbook. The handbook should identify any new changes to office guidelines and practices, as it's important to note if anything has changed for the current team members and to have new hires be aware of what's expected of them.
Don't let employment law impede on your future success. The time is now to implement an employee handbook which can protect your practice from employment related disputes. The handbook should also contain clear guidelines as to workplace rules and regulations, disciplinary measures, state and federal laws, among other items. It should also be noted to revise the handbook yearly and to have each team member sign the handbook every year.
Among the top 5 policies that every employee handbook should have include:
Learn more about employee handbooks and how it can protect you from lawsuits by reading our article, Employee Handbooks: First Line of Defense to Avoid a Lawsuit.
After hiring your team members, your next step is to communicate the transition to your new patients.
Upon purchasing a practice, you will inherit the seller's patient base. However, chances are not all of the patients will carry over and see you. That is why it is up to you to make a good first impression by introducing yourself whether by email, mail or in person. While you can't assume the selling dentist notified his or her patients ahead or after the closing date, it's in your best interest to communicate any logistics during the transition.
What to communicate with the patients:
To learn more about how to communicate the transition to team members and patients, read our article Communicating Dental Practice Transitions to Your Team and Patients.
After communicating the transition to your patients, all of you have to do is take care of a few final closing tasks.
Before opening your dental practice, there a few final tasks you need to complete.