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Acquiring a dental practice is a major responsibility that will require you to shell out a significant amount of money. Hence, making the right choice will depend on various factors that you should take into account before the deal is sealed.
Considering the area of the dental practice
Consider the area for the practice as this will determine where you will work and where you will live. If you have a family, you will need to take into account the facilities available in the area. Think about how your family would take to the area for their schooling and shopping needs.
From a professional standpoint, find out the number of dentists with existing practices in the area who will be your competitors. It is best to choose an area that offers the right amenities for your family and with lesser competition.
Choosing the right practice to buy
Once you have chosen your area, the next step is to find the practice you want purchase. In this aspect, you may need to hire the services of a broker. Although, it is possible to do the leg work yourself. Look into advertisements posted at local dental schools as well as trade journals for practices on sale.
You can also make a personal inquiry if you are acquainted with some of the local dentists. A retiring dentist may want to sell their practice or one may want to take on a partner for the business.
Evaluate the profitability of the practice
You have already established the area and also pinpointed the practice you want to acquire. At this point, you need to assess the profitability of the business to make sure you can recoup your investment.
Review its financial records for cash flow and overhead expenses to know what you can expect to earn and spend, respectively. Look into how many patients the existing practice has and how they pay for their services. Find out which dental procedures are frequently required and also which services generate the most income for the practice.
Check out financing options
After settling on a practice to purchase and doing the necessary negotiations, you need to study dental practice acquisition loans. Look and compare interest rates to find the best loan for your needs. Read the fine print and make sure you understand the terms of the loan completely.
Bear in mind that your own financial situation will be checked in addition to the viability of the practice you want to purchase. When applying for dental practice loans, you also need to prepare the following information.
- Personal credit history. Your credit score as well as your ability to pay will be reviewed.
- Personal balance sheet. Your assets and liabilities will be checked to determine if you are financially capable of handling dental practice loans.
- Personal history and budget. Your educational background and your ability to manage money will be examined, given the amount of money to be loaned.
- Personal insurance. Your insurance coverage should include assets relevant and essential to the dental practice. In addition, it should provide for disability and life in case something unfortunate happens to you.
Ownership of a dental practice means putting in more time at the clinic, paying staff expenses, and managing the business. However, with hard work and strength of character you can eventually expect a huge payoff.