Considerations in Purchasing a Dental Practice

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.

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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.

Choosing the Best Location

Where would you like to live? Being a practice owner is a big commitment, and being a part of the local community is a big part of that. Establishing a connection with the locals will help your business succeed. And ensuring a shorter commute could also pay off. No one wants to face a long round-trip commute year after year.

What sort of community is the right fit for you and your family? Do you like the suburbs, or do you want to live in more of a rural community? Consider where your competition is. This is a major indicator of your likelihood of running a successful dental practice. 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? Do you prefer a long client list with a five-day-a-week-schedule? Or do you want a smaller practice, with a slower pace, that will allow you to work fewer hours? Naturally, these decisions will affect your finances and may dictate your level of day-to-day stress too.

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.

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. 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 tax accountant who has experience advising dental care practices and other small businesses on reducing tax burdens and remaining tax compliant. You will want an accountant who does more than tax returns. Seek a certified public accountant to advise you on how to structure your business entity (S-Corp, C-Corp, LLC, PLLC, Sole Proprietorship).
• A Bookkeeper that is already well-versed in a bookkeeping system such as Quickbooks. A certified Quickbooks ProAdvisor means they are certified by Quickbooks as knowledgeable with the accounting program.
• An attorney to protect your interests and review documents.
• A consultant for your new dental practice would likely prove valuable in the long run, helping you keep on schedule and achieve goals.
• Establish a relationship with a bank early on. Getting prequalified, and ready to finance, will help you gain a handle on how much you can afford when putting in an offer.
• An insurance agent will evaluate risk and assess the value of the business to see exactly how much coverage you’ll need.
• It is smart to seek the counsel of a mentor that has experienced similar circumstance to those you’ll face.
• A marketing expert-preferably someone with knowledge of internet marketing.

Build a team. Do your research. Trial and error is not a reasonable strategy.

Tax CPA John Huddleston is the author of the Self-employment Tax Guide which is a free resource for small business owners and the self employed for tax saving strategies and tax filing requirements. Mr. 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 the profile tab. Seattle CPA John Huddleston is a frequent publisher of tax saving ideas.