Once you’ve graduated from dental school and worked for a few years, you may feel like it’s the right time to invest in your future by buying a dental practice. This process can seem daunting at first, especially if you’re new to an area and don’t know where to start looking. It’s not as if dentists put up “For Sale” signs in their windows when they’re thinking about retiring. At ddsmatch Four States, we make the dental practice transition easier. On our website, you can view available practices and see which practices might fit your criteria. Though we typically represent sellers, we also have a lot of helpful resources that can benefit potential buyers.
When you’re searching for the right practice, our search function allows you to search by associateships, partnerships, practices available for merger, or dental practices for sale. You can specify where the practice is located and how big or small you want it to be. Using a personal profile, you’ll be able to see location, revenue, number of operatories, staff size, if they have digital radiography, if they have cone beam imaging, information on the local area, and other information to help you know whether a particular practice meets your needs.
You can trust the expertise of ddsmach Four States to lead you in the right direction. If you’re just beginning your search and are unsure how to get started, our tips below can help you find the practice that will match your qualifications and your lifestyle.
What Type of Practice are You Searching For?
In order to narrow down your options, you should figure out who you want to be in the practice. Are you interested in being the individual buyer, or do you want to buy into a partnership? Maybe becoming an associate sounds like the right path for you.
Whatever your ideal situation may be, ddsmatch Four States can help you find the perfect fit in the Kansas, Western Missouri, Arkansas, and Oklahoma areas. Keep in mind these other factors as you browse different dental offices.
- Insurance. Are you willing to see patients that only have insurance, or are you happy to provide services to those without? Whether you process payments as a fee for service, PPO, HMO, or Medicaid, your business model is important and could determine who your clients are. Patients won’t be happy if you buy a practice and decide to only accept half the insurance plans the previous dentist accepted before. You’ll probably lose a lot of business that way.
- Atmosphere. What kind of environment do you want to cultivate in your practice? Are you satisfied with the atmosphere the previous dentist and their staff created, or do you want to affect positive change? Some patients won’t come back if they feel unwelcome or have a negative experience in your office, so think a lot about the type of atmosphere you want.
Don’t spend as much time worrying about the real estate aspect of buying a dental practice. In a recent interview with Dr. Howard Farran, founder of Dentaltown, Thad Miller, the founder and president of ddsmatch, explained why real estate might not matter as much as you think. “In Indiana and Louisville . . . there’s a lot of dentists who own their own building . . . Whereas maybe [in] Los Angeles, Chicago, some of the bigger cities, Atlanta, they may not own their building as much and . . . you’ve got to weigh what does that real estate do for you?”
When you own the real estate, you can take advantage of certain tax benefits, but you’ll also be paying more upfront at the time of transition. And even if a selling doctor decides to transition their practice, they may want to hold onto their real estate and have you continue to pay rent to them. Discuss with your advisors the advantages and disadvantages owning or leasing the office.
Buying a Dental Practice: Location, Location, Location
Why buy a dental office in a town or city you don’t like? Before you buy, you should narrow down your search based on the following criteria:
- Your Commute: Think about how far you’re willing to drive to get to work. If you already own a home, are you ok with an hour long drive to and from work each day? Or (if you’re renting), is the dental practice located in an ideal area that you’d want to live close to?
- Lifestyle: The town or city you live in can greatly influence your personal happiness. Are you into trying new restaurants and going to the gym every day? Is it important to you to have family-friendly amenities located nearby? Buying a dental practice is an investment that considers careful planning. If you can, check out the area before you buy.
- Expansion Opportunity: Are you satisfied with owning one practice, or do you hope to eventually open up additional locations? If the practice you buy is in a small, rural town you may be limited in your expansion capabilities, so consider your future plans for the business.
Thad Miller explains that where a doctor wants to practice needs “to be a match for how they want to practice, too.” There are significant differences between urban, suburban, and rural practices, in terms of overhead costs, potential patient base, and profitability. He elaborates that “there are more profitable practices in rural parts of the States because it’s a percentage of dentists per patient, correct? So with these DSOs not setting up in these rural areas, there’s less competition.”
Miller advises young doctors to consider what their ideal schedule would be and how they want to run the practice before they buy it. “. . . If they want to go from 6:30 in the morning until 3:00, two days a week and they’re home by 5:00, they can do that. You own your business. You can make those changes. If you want to see your son’s tee-ball practice on Wednesdays, don’t work Wednesdays. Work Fridays or just go from, like I said, 6:00 A.M. to noon. That’s what’s great about dentistry, you can do it a little differently than other people and still be very profitable. You just got to weigh how many patients you’re working on.”
How Much Financing Do You Qualify For?
You may browse the list of available practices and be wowed by an office with a large staff and even bigger office. But just remember that you are limited by financing when you buy a dental practice. Before you set your sights on a certain practice, figure out how much you can afford to spend. Wondering how dental practices are valued? Dental Economics has an excellent blog post explaining the basics of practice valuation that can help you crunch your numbers.
Our team at ddsmatch Four States offers trusted dental practice valuations conducted by a top-rated, third-party accounting firm. In addition to this practice valuation, we also offer a clinical appraisal through Dr. Charles Blair’s Clinical Treatment Analyzer that helps identify opportunities to increase revenue that the selling doctor may not be currently maximizing. To perform your due diligence as a buyer, you should carefully review all of this information.
Though we may not represent buyers, we have extensive references we can give you for trustworthy dental practice lenders. Miller explains that ddsmatch brokers “have relationships in every area . . . so they’re going to actually work with these individual buyers and banks. If it’s national banks, if it’s regional banks, or if it’s local banks, we do a lot of that in our process.”
Most knowledgeable lenders are willing to loan dentists the finances they need. It’s regarded as a favorable investment because of extraordinarily low default rates. Even so, banks will want to be reassured that you can keep up with the production schedule necessary to cover the costs of the practice and service the loan. Dr. Howard Farran of Dentaltown, observes that “the big banks are telling the graduates who just walked out of school . . . that you needed at least a year’s experience before they’ll even talk to you.” Miller explained that the banks are “not as concerned about the debt as they are with the speed of the dentist keeping up with the practice, being able to do the procedures that the selling dentist has. If they work for a year, that usually gets them over the hump to where they can keep up with the hygiene schedule. They can do the restorative and be able to keep up with the schedule. That’s their biggest concern. It’s not necessarily the debt as much as it is the speed.”
When you begin the process of buying a dental practice, one thing to keep in mind is how you will transition into your new role. Do you want the doctor who is retiring to stay on for a few weeks after you take over for a smoother transition process? Is the former owner willing to help you, or would they rather take off as soon as the deal’s finished? If you’re just starting out as a dentist, you may want that extra assistance in the first few weeks, or you may feel able and ready to do everything on your own. Think about the pros and cons of the different types of transitions before you buy. Clear communication from the get-go can make or break a dental practice transition.
Buying a Dental Practice is Easier With Help from the Experts
Most people who buy a house work with a realtor because they have the experience and knowledge to help make the process easier. Buying a practice may not be exactly the same as buying a house, but without the help of a transition representative, it can quickly feel overwhelming and complicated. Thad Miller says that “the buyer needs a representative” just as one would have in a legal or real estate transaction. He explains:
“It’s important to build your team. And most of the people that I encourage them to work with, they’ll sit down with [the potential buyer] in advance and they won’t charge them to talk about how they do things. They don’t need them until there’s an opportunity . . . Even if they’re not ready to buy right now, they need to build their team.
“I had a great practice that was in high demand, we had six or seven people that wanted to buy this practice. And the dentist who took my advice—that had a team—he sat down with the selling dentist who needed to sell. He was actually ill, he had cancer and he needed to sell, but he had a great practice and he wanted it to go to the right person.
“The person who sat down and said, “I’ve got an attorney in place, I’ve got an accountant in place, and I’ve got my bank financing in place. I would love to buy your practice,” that’s what sold my seller . . . Because they were ready. Because he knew he could move quickly, he knew he wasn’t just kicking tires, he knew he was ready.”
Buying a dental practice can be a complex transaction, and having the right kind of support is exactly why ddsmatch Four States clients enjoy such a positive process. An experienced specialist can help you navigate all the myriad financial and legal aspects that come along with the sale. You may not be able to identify potential problems and opportunities, but a transition specialist will. Their guidance and advice can help you avoid costly oversights and errors.
ddsmatch Four States Has Available Practices Right Now
At ddsmatch Four States, we help dentists and even dental students stay informed of available opportunities and industry conditions in their desired areas so that when the time comes to buy a dental practice, they have all the information they need to make it possible.
Though we only represent selling doctors, we want everyone involved in the dental transition to leave satisfied with the results of the deal. We’re only happy when our client is happy and the buying doctor is thriving in their practice.
Keep in mind that when you purchase a practice, you’re not just buying office space, equipment, and files. You’re taking over a legacy that the selling doctor has built over a lifetime. Most of our clients want their practices to continue to be an important part of their community, and even to grow beyond what they built themselves.
We believe that we achieve success through our fair and transparent processes and straightforward communication. Our goal is to find compatible matches for both the buyer and the seller. At ddsmatch Four States, our clients continue to trust us because we provide them with the information and resources they need to make successful transitions. We’d love to help you, too.