I’m Ready to Be an Owner! Congratulations, you’re ready to embrace dental practice ownership! Becoming a practice owner comes with more responsibility, but can be far more lucrative than working as an associate and allows for greater control over your work environment and how you practice dentistry. Be prepared for a few lean years initially as you pay down your bank loan. However, rest assured you’re investing in yourself and building your personal net worth, and years down the road, with proper planning, you can sell the practice in a tax-advantaged fashion to fund a welldeserved retirement. This resource is intended to provide information on how to conduct a preliminary assessment of a purchase opportunity to determine whether it’s a good fit for you personally and financially and whether it has the elements necessary to set you up for success.
What Advisors do I Need? Before considering a practice purchase, it’s important to have the right team of advisors in place. Unlike the sale of a house, whereby both parties to the transaction are normally represented by a brokerage, with the sale of a dental practice, dental practice brokers only act as agents for the seller and strictly provide customer service to the buyer.
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A buyer’s team of advisors typically consists of an accountant and a lawyer. The sale of a dental practice differs in many ways to the sale of other businesses, so it is important that both these professionals have significant experience with dental practice sales to ensure they have the necessary expertise to advise you appropriately throughout the process. It’s also a good idea to establish yourself with a lender in a bank’s healthcare group who can provide guidance, in advance of submitting an offer, on what financing would be available. Keep in mind that a dental practice appraisal arrives at a value based on an estimate of the financial performance an “average” buyer is likely to able to achieve. Your accountant and banker will run financial forecasts specific to you, taking into account your personal scope of practice, productivity, and potential to grow the practice, to determine the level of financing the practice would be able to support in your hands. This ultimately plays into the purchase price you’re able to offer for a practice. Once you have your team of advisors in place, remember they work for you. Don’t hesitate to ask any questions so you’re fully informed each step of the way.
Dental Practice Buyer’s Guide & Workbook | 3
