Ultimate Guide On How to Start A Successful Dental Practice
Locating a medical and dental practice for sale is a complex procedure. It should fit the needs, career goals, and budget. Selling a medical, dental or any other health sector is not easy as it involves knowledge of valuation, legal, tax, and accounting.
A practice holder’s business is his/her most valuable asset. The valuations analyst must understand the idiosyncrasies of each type of practice. He/she must spend an adequate amount of time in the area because of its vast magnitude.
Nowadays, there are many points of categorical sales when it comes to medical/dental practices. These are the following approaches that medical/dental practitioner should keep in mind before opting for any practice for sale:
- Talk to other doctors:
The person should be constantly connected with doctors for a better analysis.
Keep checking out the classified section of the local journal for doctors.
Brokers are good contact because he/she can be indispensable. Here are the following things to be considered while contacting a broker:
A broker takes a fee out of sale prices, the selling doctor should be beware when agreeing to the broker’s terms and conditions for representation. Pay special attention to the sliding scale fee and review the contract carefully. On the other hand, the buyer should be beware too as the selling doctor may increase the prices to cover brokers’ fees.
- Non-disclosure agreement:
A buyer needs to sign a non-disclosure agreement to protect selling doctors’ confidential information.
Most small businesses usually take around 3 months. One month for negotiations to get the letter of intent, three weeks for due assiduity, and then one month to close.
- Letter of intent:
After identifying a targeted practice area and agreeing to all terms and conditions, the next step is a letter of intent. The letter of intent should not be a binding agreement. It only confirms the basic deal terms and constrains the selling doctor to cooperate with the buying doctor.
- Due diligence:
An orderly, organized, and professional due diligence benefits both the buyer and seller. The buying doctor performs the due diligence to comprehend the practice.
A due diligence review for practice should focus on the following aspects:
- Goodwill and patient base
- Employee base
- Financial review of a buyer
- Assets, leases: A buying doctor should inspect all equipment and be sure that the practice’s trade name can be protected and relocated. All leases should be reviewed. An asset purchase agreement has its own Non-Competition and Non-Solicitation provisions that protect the buyer as a part of the sale transaction.
- Liabilities: A buyer should check for liens, unpaid back taxes, lawsuits, and unpaid vacation liability.
- Purchase price: Take taxes into account because it is an after-tax purchase price that counts. A buyer has three choices including cash up front, a promissory note, or an earn-out.
The employment agreement should set forth the term of employment, the compensation for the work that is being performed. It includes business expenses and fringe benefits. Non- solicitations and confidentiality provisions are an important part of the contract. A big query in these arrangements is malpractice insurance provided by the buyer.
Medical and dental real estate:
There are certain aspects as proposed by Heath pro realty group:
- Team consultation: Meet the HPRG team of experts to discuss the goals.
- Sales and marketing
Starting a medical practice:
For a health care resident who is thinking of buying an office, especially if the person is starting from scratch, HPRG is a good place to start. HPRG is the best brokerage company for optometry and dental startups. Demographics, site selection are all included at no charge. Their unique understanding of local market knowledge and the medical landscape makes them the most reliable lease negotiators. It is better to find medical practice for sale in Virginia or any other city and state after carefully looking into all the options.
Choosing the best medical office space for practice:
These are the following criteria to find a medical practice for sale:
- Population characteristics:
Population size matters when looking for a medical office space. The more populous the area, the more the patients can gather. Another factor related to the population is that the area with low- income residents will likely have more Medicaid patients that may result in a low refund.
Older medical practice offices have deep-rooted ties with patients that are harder to break. Newer medical practitioners are harder to trust on.
The office should be in a highly visible location on the main road. This will help in marketing and profit.
The external appearance of the medical practice should be well-maintained and good to attract patients. Any worn-out or dingy building will make the patients doubtful. The interior should be well maintained too.
- Ancillary services:
This includes sleep labs, MRI, and imaging centers. Hospitals have these types of setups usually but doctors have been looking for offices with extra spaces for additional services.
Starting up a dental practice:
When opting for a new dental practice, there is a lot of work to do in making it successful. Here are a few things that need to be considered:
- An existing practice offers instant cash flow
- A network of trusted advisers
- Consider the term of practice loan
- Determine practice value
- Do your diligence
The Bottom Line
A doctor can face many problems when choosing a good medical practice. Even the best practitioners sometimes fail because of their wrong choices. There should be a checklist of things to be considered before finalizing a medical practice. These include a good location, a populous area, and an area with a lesser number of medical offices. Doctors must do a lot of research before establishing a business. Only experts in the business should be trusted as selling a medical practice and finding one is a difficult thing. Finding a medical office space is not tricky if the person has the proper knowledge and is aware of the locality.