Purchasing a Dental Practice: The Mandatory Background Research

Deciding where to buy, how to do it, and what kind of dental practice to purchase is a crucially important step in the career of a dentist. There are many essential decisions to make and key factors to examine as you search for the perfect dental practice that meets all of your needs.

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

Where is it that you would 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? These choices will dictate how many competitors will be in close proximity. 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

Are you pursuing a specialized dental practice or a generalized dental practice? Who is your competition? Will you be able to gain referrals from local practices (and likewise return the favor)? Who is your competition and is there room for your particular niche? What is your working schedule? Create a thorough business plan.

Seek a Valuation

Get a CPA or CVA to perform a business appraisal on the proposed business purchase. They can find out how much other dentists have paid for similar practices. This will help ensure you are within the means of your projected income.

Enlist Support

Just as your business cannot operate without the support of patrons, you’ll never realize your full-potential without the aid of experienced professionals. You’ll have to rely on the expertise of others as your patrons will have to rely on you. Trusted advisors can save you plenty of trouble. Here are a few people you’ll need:

• A CPA with a history of guiding dental care practices and other small businesses on remaining tax compliant and reducing tax burdens. You will need a Certified public accountant who can help you develop tax-saving strategies. You will want a cpa to advise you on how to structure your small business (S corporation, C corporation, limited liability company (LLC), professional limited liability company (PLLC), sole proprietor).
• A Bookkeeper who is versed in a small business accounting system like Quickbooks. A certified Quickbooks Advisor means they are certified by Quickbooks as proficient with the bookkeeping platform.
• A legal professional to review all documents related to the sale and to legally protect your interests in the future.
• A consultant for your new dental practice will likely prove valuable in helping you meet goals.
• At the start you should establish a relationship with a bank. Getting prequalified, and ready to finance, helps you keep perspective on how much you can afford and how to put in a good offer.
• Your insurance needs will increase ten-fold once you’re a business owner. An insurance representative will evaluate risk and assess the value of your business to see exactly how much coverage you’ll have to have.
• It is wise to seek the help of a mentor or business confidant of some kind, perhaps a veteran dentist who once went through the same process you’re going through now.
• A marketing expert-preferably someone with knowledge of internet marketing.

Build a team. 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. Profile information on CPA John Huddleston and the CPAs employed by Huddleston Tax CPAs is available at CPA Tax Accountant Profile.
Seattle Bellevue Tax CPA John Huddleston is a frequent publisher of tax saving ideas.