10 Things To Do Before You Buy a Practice
Follow these steps to be ready when the time is right for you to buy a practice.
1. Get Your Calendar Out
We’d all like things to go smoothly and quickly, but buying a practice doesn’t happen overnight. A broker needs to get to know you to find the best possible match. So pull out your calendar and set a realistic time frame with your broker. In the meantime you’ll be working to improve and expand your skills and experience.
2. Review Present and Prior Contracts
Make sure you have copies of your current and past employment contracts, and take a close look at the non-compete clauses they may contain. Understand those details as they could determine where you can and can’t practice dentistry for a specified amount of time.
3. What’s Your Style? Stick To It.
It might be tempting to get caught up in a potential practice match because you’re ready right now, but be clear on your practice style going into the process and don’t settle for anything less. Make a list and check it twice before buying.
4. Your Credit Makes You Credible
You’re preparing to make a major purchase and bankers will be reviewing your financials. Be proactive and pull your credit report. Now is the time to investigate where your credit stands, to protect your credit and to address any blemishes on your credit report. Investigate, analyze and act.
5. Prove You Can Produce
Keep good records of your production. Keep track by retrieving day sheets from your associateships that show that you can produce. Now is also the time to update your CV, keeping track of all professional experiences, speaking engagements, professional associations and volunteer work.
6. Stay Fresh
Now is the time to expand your knowledge. Take Continuing Education in specialities in which you need improvement. For instance, most practices currently aren’t doing endo or oral surgery. This could be a gold mine for a new owner to treat patients within the practice.
7. It’s Your Call
Start meeting with multiple brokers to get a good feel for what services they offer, how they work and the depth of their contacts. Don’t sign any agreement with a broker that limits you exclusively to them. Make sure you sign a confidentiality agreement to protect you and your information.
8. Assemble a Team of Professionals:
Your expertise is dentistry, not accounting, banking, practice management or law. Begin to assemble your professional support team by asking for referrals from trusted sources. Not only can these professionals help you navigate the purchase of a practice, they can also assist you in achieving your short and r long-term practice and retirement goals.
9. Facts and Figures
As you consider potential matches, demand to see the facts and figures of the practice. Ideally, there will be a third party valuation and/or full appraisal to give you the most complete practice picture possible.
10. The Practice Transition
It’s time to acquire your transition style. You have many choices: a turn-key is when the doctor leaves the day after the sale; a short-term transition is less than 6 months and long-term is more. Or do you need to be an associate first? Buy-in over 5 years? Consider your personality and how well you play with others when considering your options.