Dental Practice Purchase: Before you buy

It is a very important that you give yourself due consideration in deciding where to buy, how to go about it, and what kind of practice to purchase.

Do Not Rush into This

Dentists must not rush into a purchase, and need to manage their expectations, understanding that the process will take some time. There is no need to hurry through important steps and be impatient. Buying the right dental practice for you matters more than closing a deal quickly when the first opportunity presents itself.

Location Location Location

Think on where you’d like to live. You’ll end up being a big part of this community, so you’ll want to make sure it’s a good fit. Establishing a connection with the locals will help your business succeed. And shortening your community wouldn’t hurt either. Avoid a long commute and you’ll have the opportunity to spend that time with friends and family. That’s not a bad trade off.

Establish yourself amongst people you can relate to and people you can enjoy. Your practice and your interpersonal life will reap the benefit. Suburbs? Intercity? Rural? Let the location of your competition inform your decision. Will your spouse be able to find work? Will your kids end up in a school district that will nurture them and grant you piece of mind?

Determine the Ideal Practice for You

Lay out a working business plan. What size of dental practice do you anticipate? And do be careful to leave room for growth. Do you want to practice general dentistry or do you prefer an expensive practice that focuses on cosmetic dentistry? Does working a full five-day schedule with a large list of clients appeal to you? Or do you want a smaller practice, with a slower pace, that will allow you to work fewer hours? These decisions affect your finances and stress levels–what can you reasonably make work?

Seek a Valuation

Seek the counsel of a certified public accountant prior to purchase. Then you’ll have an informed point of view going into things. This will help ensure you are within the means of your projected income.

Establish a Support Net

Just as your business cannot operate without the support of patrons, you’ll never realize your full-potential without the aid of experienced professionals. There are many areas where you’ll need and benefit greatly from the expertise of others. In the long-run, investing in advisors will save you a lot of trouble. Here are some people you might want to have on your side:

• A CPA who has experience guiding dentistry practices and other small businesses on reducing tax burdens and remaining tax compliant. You want an accountant who can help you establish tax-saving strategies. You will need an accountant that can advise you on the best entity structure for your small business (S corporation, C corporation, limited liability company (LLC), professional limited liability company (PLLC), sole proprietor).
• A Bookkeeper who has familiarity in an accounting software system such as Quickbooks. A certified Quickbooks ProAdvisor is a level of distinction in which a bookkeeper certified by by Intuit as knowledgeable with the bookkeeping software.
• An attorney to protect your interests and review documents.
• A consultant for your new dental practice will prove invaluable in helping you save money and avoid headaches.
• Right at the beginning, you should establish a relationship with a bank. Getting prequalified, and ready to finance, will help you gain a handle on how to put in a good offer and how much you can afford.
• An insurance agent will assess the value of your business and evaluate risk to see just how much coverage you will have to have.
• It is intelligent to seek the aid of a mentor that has experienced similar circumstance to those you’ll face.
• A marketing pro that knows online marketing.

Prepare. Be a researcher. Trial and error is not a reasonable strategy.

Tax CPA John Huddleston has a law degree and masters in tax law from the University of Washington School of Law. He has been a guest tax expert on the radio. He advises small businesses in the Seattle Bellevue Tacoma & Everett area on various tax and accounting issues. His firm, Huddleston Tax CPAs, also provides tax preparation service, quickbooks consulting, business valuation, general accounting and bookkeeping service.