Your options for a practice acquisition include: 100% buyout — This means you purchase 100% of the practice from the seller, who may exit right after the sale or stay on for a period of time to transition the practice. This makes change in ownership easier on everyone — including your new patients. Is the practice’s type of dentistry align with your vision? View Dental Practices For SaleLooking to Sell Your Practice? AFTCO has the largest national database of practice opportunities and the knowledge and expertise needed to guide you to the right practice for you. From start to finish, buying a dental practice can take up to eight months. What to take into consideration when you’re thinking about buying a dental practice. Buying a dental practice is typically contingent on the buyer’s ability to secure 100% financing for the amount of the practice purchase price. All rights reserved. When buying a dental practice, you need to deeply consider not just the practice itself, but also the area that the practice is located in. We’ve consulted with over 6,000 dentists and we’re seeing the best seller’s market in years. You now have patients who are the children or even grandchildren of your patients. Is this practice in an urban, suburban, or rural environment? Most dentists will first approach their local bank to fund their practice loan, and although this is always an option, local banks are often generalists — and collateral lenders that see little value in the goodwill aspect of the practice. Here's how it works: We gather information about your online activities, such as the searches you conduct on our Sites and the pages you visit. Or the seller was writing off $10,000 per year in entertainment expenses and the buyer may not see the need to entertain at the same level. This is particularly important if you have a specific lifestyle you wish to lead. Dental-specific CPA — Of course, there are many general CPAs who would like to earn your business — and you may already have one you trust — but we encourage you to have a conversation with a CPA who works with at least 25 dental clients. All your beliefs and experience, up until now, will need to be evaluated and measured when you are considering which practice is right for you. Buying or selling a dental practice will probably be one of the biggest financial transactions you will ever be involved in.. And whilst your years at Dental School will have trained you to provide an excellent clinical service for your patients, no one ever teaches you how to buy or sell a dental business. Check out our dental practice buyer’s checklist. We guarantee that we will ask you great questions so you can qualify yourself. Location could influence both future revenue streams and access to specific amenities you may require. Simultaneously, there is a contract term agreement, formal bank approval, and other steps to close the sale. Every buyer must be pre-qualified with a bank prior to meeting with a seller. Is the practice fee-for-service? Ask yourself: Does this practice match your professional vision, and will it continue to for years to come? Take it one step further: Hire a consultant who will spend time in the practice to analyze the staff, the systems, and perform a complete chart audit/patient count. As a prospective buyer, put yourself in the seller’s seat for one moment, and imagine that you have owned this practice for the past 20 to 30 years. The Key Stages in Buying or Selling a Dental Practice. When you own a dental practice, you need to be an expert clinician, expert patient manager, and expert business manager. Top 10 Tips 1.Career History – Building the perfect CV Our experience shows us that most doctors will only buy and sell once. To understand the current market in your area, be sure speak with multiple brokers and look at a variety of practices. Before buying a dental practice you’ll need to consider the complex facets of a dental transition, including legal documentation, financing, and how you’ll keep current patients and staff members happy post-transition. Room to expand — Chances are this is your first practice and you are ready to conquer the world. by Roy R. Rice, CPA. Even if a practice opportunity does not fit your needs or desires, communication will allow us to understand exactly what you are looking for. 3 Buying a dental practice is probably one of the biggest decisions you will ever make in your career. If there is a broker involved in selling the practice, they will have done the proper due diligence to represent the seller. The company has grown from a regional company to a national company, and we’re now US Dental Transitions. Buying a dental practice right out of school needs to be given serious thought as many new dentists have student loans or other loans that may need to be considered first. If you prefer that we do not use this information, you may opt out of online behavioral advertising. We strive to provide you with information about products and services you might find interesting and useful. Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. Price should be used to screen out dental practices that may have otherwise been a fit if you cannot qualify for the required financing.We have some excellent dental practices for sale right now. There are many schools of thought and specializations in dentistry. If you do not see a practice that meets your specific needs, contact us and we’ll discuss finding a practice that is right for you. Instead, you should get professional help from experts that can assist you with different things. Your patients may go through some anxiety with losing their trusted dentist, so it’s important to maintain familiar faces and practices in the office. Buying a Dental Practice Guide for First Timers Take your time looking for a dental practice that already operates the way you would like yours to work. Information may include schools attended, degrees held, etc. AFTCO makes it easy to find the perfect practice for you. Determining the change of control, or transition, is critical for a successful dental practice purchase. When buying a practice there are many items that need careful and detailed consideration to ensure you have a smooth and successful purchase. Our recommendation tool can help you find the right financing. For example, let’s say a seller has a $5,000 charitable contribution that was being paid out of the practice, and the buyer decides they don’t want to continue contributing at that level. So often viewing a dental practice is seen as the first session step towards practice ownership. If your production meets your ambition, do you have the room to expand? Loan structure — If you prefer, loans with the first six to 12 months of interest-only payments are available. What percentage of the practice capitation? 9 Steps to Buying a Dental Practice. Although US Dental Transitions does not charge the buyer to purchase a practice, we do require an open line of communication. To learn more about how we can help you with your practice purchase, call 800.497.6076 to speak with a Practice Specialist. What is the ratio of cosmetic or restorative dentistry versus hygiene? The seller will present the buyer with a few key facts about the dental practice such as: Turnover Use a specialist dental solicitor/accountant, don't be tempted to use a mainstream one for this, it's not a simple sale and purchase agreement. A true transition period — with both doctors working — can make or break a transition. There are other instances where the selling doctor walks away once the transaction is complete. Bank of America may prohibit use of an account to pay off or pay down another Bank of America account. There are two main methods of raising finance when buying a dental practice. Dental Consultant – A dental practice management consultant can help the buying dentist get “under the hood” of the practice by assisting with a chart audit and evaluating practice management systems, collection policies, treatment planning, patient base and new patient flow, marketing, etc. A CPA with dental expertise will not only provide valuable industry perspective, but also advice on the best tax strategy regarding allocations of the selling practice, best practices from existing clients, expense averages, and a cost analysis on hiring and equipment acquisitions. Before buying or selling a dental practice, great care and planning should be taken to consider the tax consequences regarding the allocation of the sale price to the various assets involved in the transaction. It is important to understand: You are buying someone else’s practice (philosophy, flow, treatment planning, staff training, systems, etc.). Dental Transitions works to ensure there’s a good fit between the selling dentist and the buying dentist. Included in the LOI is the closing date. To get you started, here are top tips from Dental Elite on key areas, from building the right career history to securing the perfect practice. Buying a dental practice is probably one of the biggest decisions you will ever make in your career. Prior to completing your purchase, you’ll need to have your dental lease properly reviewed for hidden clauses that can potentially cost you hundreds of thousands of dollars. Working with a lender that understands how to evaluate dental practices and has experience in financing dental practice acquisitions can … All programs subject to credit approval and loan amounts are subject to creditworthiness. The buyer will tour the office and discuss practice philosophy with the seller. You may lose patients during the transition. Member FDIC. It is important you find a legal advisor who has dental market expertise so they understand the nuances of a dental practice, employee contracts, what warranties and covenants will be of use in the contract and any considerations for your regulatory body. If you’re considering the purchase of a dental practice, the first questions you may be asking are where to start and what to expect. To learn more about relationship-based ads, online behavioral advertising and our privacy practices, please review Bank of America Online Privacy Notice and our Online Privacy FAQs. Prepaying your loan or making additional principal payments may be possible as you grow your practice and increase your cash flow. It’s beneficial to everyone involved and helps curtail any confusion you may have about the environment and philosophy. AFTCO is the oldest and largest dental practice transition consulting firm in the United States. Dental-specific lender — As with dental specialty advisers, dental specific lenders exist and are experienced with your needs. As you begin the process of buying or selling a dental practice, you will naturally have many smart questions. Dental-specific attorney — Since the practice broker will represent the seller, you need to find a reliable source to represent you, the buyer, during the transaction. Lenders determine cash flow in much the same way, but there are variables, such as allowable expenses. Buying an existing practice can give you a … Your Advisor will guide you through this process with suggestions on how to build relationships with staff and patients. This starts with the buyer and the seller being brought together, usually by a Business Agent. If the buyer is interested, a Letter of Intent (LOI) is created and presented to the seller. Also, if you opt out of online behavioral advertising, you may still see ads when you sign in to your account, for example through Online Banking or MyMerrill. Buying a dental practice all by yourself will usually mean you spend a lot of time chasing loads of different things and will probably end up with a bad deal. While you may discover you want to upgrade your equipment and technology after you purchase your dental practice, inheriting equipment is much cheaper than starting from scratch. Buying a practice. While there are several methods used to value practices, the market value (what a buyer is willing to pay) is the most common. Buying a dental practice(s) is a milestone in any dentist’s career. There are four key stages in buying or selling a Dental Practice. Chances are you started associating soon after you passed your boards. Buying an existing practice gives the buying dentist immediate access to an established patient base, which ( if done right) can translates into instant cash flow. Your dental attorney should be at least engaged in the terms of the buy/sell agreement, office lease negotiations, non-compete covenants, establishing your corporation, and lender requirements. It was your livelihood and key connection to the community. A Letter of Intent (LOI)or Offer to Purchase (OTP) are (ideally) non-binding agreements that outline the buying dentist’s interest in the dental practice. Buying a practice; 360° Tours – How much do you value your time? Pre-Contract. Can you perform the specialty care if it has been kept in house? Pre-contract 2. After practicing dentistry for 25-years, Dr. Bill Adams founded Southeast Transitions almost 20-years ago to help his fellow dentists transition their practices to other dentists who share similar values and philosophies. Knowledge is power, and the more you know about this big investment, the better. Exchange and completion. ET. Pre-qualification is an informal process – the bank believes the buyer is credit worthy. If the LOI is accepted, the buyer’s due diligence period begins. Some practices are Fee for Service only, others mix FFS with PPOs and HMOs, and others rely on Medicaid for new patients and cash flow. The non-disclosure allows the Transition Advisor to understand what the buyer is looking for and it includes background information about the buyer to share with the seller. Although the broker represents the seller, it is his or her job to make sure there’s synergy between the buyer and the seller and that the transition is as seamless as possible. Your lender can help you understand the most accurate cash flow — and other important metrics of your practice — as you move forward.Find out what questions to ask your lender before taking out a dental practice loan. Equal Housing Lender new window. These vary from lender to lender, and are less important in the earlier years of practice ownership. There will often be an emotional value to the sale, regardless of the monetary value. Buying a dental practice Whether you’re a recent dental school graduate looking to establish your career or looking to relocate, it’s important to have the guidance from an experienced advisor. Bank of America is a registered trademark of Bank of America Corporation. In addition, financial advisors/Client Managers may continue to use information collected online to provide product and service information in accordance with account agreements. This Part 1 article will answer some key questions concerning buying a dental practice and will continue in Part 2. We guarantee we are not biased towards one party or another. The short answer is yes, you do. Patients loyal to the former owner may look for another dentist. Do you and the seller practice the same quality of care? There are several business models for dental practices, and they all have their pros and cons. Bank of America, N.A. In these cases, before you sign and agree, consult with one of your advisers on the details of such an agreement. With so many things to think about, buying outright or buying into a dental practice is one of the most important steps in your career so it is imperative you select the right dental practice for you. Hiring consultants may be a great idea not only during the due diligence period, but also during the post-sale transition. Buying a dental practice is a huge commitment, so if you are looking to become a principal, there are a few things you will need to consider. Some restrictions may apply. After you purchase the practice, how will you want to assume control? Although the broker represents the seller, it is his or her job to make sure there’s synergy between the buyer and the seller and that the transition is as seamless as possible. 9 Steps to Buying a Dental Practice; Buyers Toolkit; Latest Practices for Sale; Becoming a member; Dealing with CQC; The Purchase Process; Funding a practice purchase; Testimonials Staff retention — The seller was the pillar of the practice for many years and has now departed. Relationship-based ads and online behavioral advertising help us do that. How to Purchase a Dental Practice. Sometimes, the selling doctor will stay on staff, working for the buying doctor for a period of time. Buying my first dental practice in Managing your finances Within six months of completing VT and starting what I thought would be a long(-ish) associate career, I was given an opportunity to think about becoming a partner or completely buying the dental practice and becoming the principal. Providing that you go through all of these steps, you shouldn’t have a problem starting the business and finding quick success. Practices usually sell for 70 to 90% of last year’s revenue, while specialty practices may sell for less due to possible volatility with the referral sources for the practice. It is important you secure the dental practice that is right for you. © 2020 Bank of America Corporation. However, with the right dental practice sales agent like Samera, you will be able to purchase your dental practice in less time. Whether you’re a recent dental school graduate looking to establish your career or a seasoned dentist with dreams of relocating, it’s important to have an experienced dental practice broker by your side as you navigate through the process. We know that you have invested years of hard work into your education and experience. The staff may not bond with you and may voluntarily leave the practice. The criteria above will be what drives the decision based on the goals for your practice. Bank of America Practice Solutions is a division of Bank of America Corporation. Often there’s a difference between what a seller believes their practice is worth and what the buyer feels it is worth. This field is for validation purposes and should be left unchanged. Your up-front due diligence will prove crucial to a successful transition. The due diligence in these agreements needs someone who understands the complexity of a dental business to understand, especially if buying an NHS practice. Buying a dental practice can be exciting, overwhelming and a bit mystifying. A subsidiary of Henry Schein, Inc. they provide expert guidance for selling and buying dental practices, assessing partnership and associateship opportunities and performing dental practice appraisals and valuations. Dental school only provides you the tools for two-thirds of what it takes to run a successful office. One study shows that a dentist can earn an additional $14,000,000 (that’s right – million!) Dental Practice Sales & Purchases . Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice. Consultants can advise you on Hiring and firing, as well as how to customize, establish and maintain your systems — without rocking the boat too much — are all their areas of expertise. Simply answer a few quick questions and we’ll recommend the best product for your business. This instantly allows the buyer (you) to support the practice debt load, including your new loan payment, your salary and your personal expenses. Associate with the option to buy — A practice owner may see the value in retaining a quality associate and offer a future option to purchase. The staff q members are the face of the practice and have a good rapport with patients, which means you may need to retain the staff for at least the first year. There is a high probability that the proceeds from the sale of your practice will be a significant piece of your upcoming retirement. Buying your first dental practice will be one of the highlights of your entire career. One is to borrow from a financial institution, and the other is equity funding, where an investor or consortium of investors inject capital in return for shares in the practice. After the non-disclosure is returned, the administrative staff at US Dental Transitions will send the buyer the initial practice information, along with contact information for the Transition Advisor for that specific practice listing. Set up a consultation with SRJ Chartered Professional Accountants to determine where your finances stand in terms of purchasing a dental or dental speciality practice. We encourage you to look into various funding options as soon as possible. Businesses come in all shapes and sizes. Understanding the process of buying a dental practice will help you protect your investment and … Although your payment may be lower with an adjustable rate, rates will eventually rise, so your best solution is to lock in a strong fixed rate today for the next seven to 15 years. A strong dental CPA can become a lifelong adviser and planner for your professional and personal financial goals. Start Buying a Dental Practice the Right Way. During this time, you likely started conversations with industry experts about the possibility of acquiring a practice. Visit our Dental Practice Listings page. By reducing these types of expenses, a lender may "add back" the expense into the practice’s profitability, which results in a higher cash flow. Buy-in — With this type of sale, you would buy in for 25 to 50% and buy the rest of the practice when the seller decides to retire. over the life of their career by owning an office rather than working as an employee. Henry Schein Professional Practice Transitions, Inc. is a national leader in dental practice transitions. Established patient base and patient flowCash flowEstablished insurance relationships. Unlike a start-up practice, an established practice has an existing patient base — and just as important, an existing cash flow. Breaking into the dental field is a big step — but it doesn’t have to be a big headache. Pre-qualification is not a formal bank approval. Bank of America, N.A. One of the advantages of buying an existing dental practice is the equipment you’ll inherit. Buying a Dental Practice Let us match you with the perfect solution for your transition needs. Southeast Transitions is now US Dental Transitions. These ads are based on your specific account relationships with us. Click here to find out more about how a dental practice sales agent can help. This is especially important when the seller leaves post-sale and does not stay on for the transition period. Interest rate — Rates can be fixed for the term or adjustable with prime or other rate indexes. Take time to understand existing systems and processes before you decide to make changes. This course is Part II of Mr. Lott's previous Townie Meeting presentation, "Buying a Dental Practice: There is More to It Than Price" This presentation goes into detail on issues in buying or merging a practice, and specific A/R issues as well as other ideas and strategies. They include high level terms such as the purchase price for the practice, closing dates, the role of the departing dentist, restrictive covenants to the seller such as non-competes, and more. It’s a practical choice to buy a practice that is already operating under the philosophy you subscribe to. 1. It will allow you to place your priorities front … You should not acquire a dental practice without the input of one or more of these key advisers: Practice transition consultant or broker — Dental practices can be sold directly by the owner or through a business broker, who may have multiple buyers waiting for the right practice to come along. Also, make sure that they are practicing the kind of dentistry you want to. After reading this article, you now know what you need to do before buying a dental practice. Learn what steps you should take to prepare for buying a dental practice!Check out our dental practice buyer’s checklist! The goals for your buying dental practice and personal financial goals this field is for validation purposes should! With flexible prepayment options, loans with the buyer feels it is worth what. 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