Tips for Buying your First Dental Practice

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Enlist the help of a practice broker. Finding a practice to purchase on your own can be very difficult. Because the process of selling a practice has to remain completely confidential, most sellers are not going to advertise that they are selling their practice. A practice broker is a third party that helps connect buyers and sellers while maintaining confidentiality for all parties involved. They help guide you through the process and make sure things run smoothly.

Get pre-qualified by a bank. Banks love lending money to dentists. But not all dentists and practices qualify. Have a conversation with a dental specific lender early on in the process so that you will be prepared to pull the trigger when you find the right opportunity. You will typically need a minimum credit score, a certain amount of liquidity, and a proven track record of being able to produce. There are many dental specific lenders out there and interest rates on conventional loans are very competitive.

Find an accountant to work with. Most likely, you will want to use an accountant to help you set up your books, provide you with financial statements, and handle your tax filings. A dental specific accountant can give you specific guidance about dental practices that can give you an edge. They will have an idea about what your expenses should be, the best way to categorize your expenses, and other dental specific best practices. If you make a mistake with your financials in the beginning it can be difficult and expensive to correct.

Apply for insurance. When you purchase a practice, you will need additional insurance that you didn’t necessarily need when you worked as an associate. If your employer was providing malpractice insurance, be prepared to get your own policy. If you are getting financing to buy a practice, you will probably need to get life insurance. If you are purchasing commercial real estate, you will need to insure that as well. Navigating all of this can be confusing, so work with someone who has your best interest in mind and focuses on dentists. Your dental association can be a great place to start.

Be patient. It can take years to find the right practice and it pays to wait. Start looking before you are so unhappy in your job that you jump ship at the first practice you see. However, it is a seller’s market, and the best practices will sell quickly, so be prepared. Buying a practice is something that most dentists will only do once, so make sure you do it right. Talk to everyone and work with the team you feel is most aligned with your vision. Being able to own your own business is one of the great things about being a dentist!