Dental Practice Purchase -Before you buy

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.

Do Your research

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

Think about where you might like to live. You’ll want to be a big part of this community, so you’ll need to make sure it’s a good fit. Participating in local activities and mingling with neighbors will help your business grow. And ensuring a shorter commute could also pay off. Trading off time spent in commute with time spend amongst family and friends is not a bad deal.

Establish yourself amongst people you can relate to and people you can enjoy. Your practice and your interpersonal life will reap the benefit. Intercity or rural–what’s best for your family? Let the location of your competition inform your decision. 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?

Deciding on 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. Will you be establishing a specialized or generalized dental practice. Can you establish relationships with other practices in the community that can give you referrals? Do you prefer a long client list with a five-day-a-week-schedule? Or maybe you’d prefer a smaller practice that allowed for more time off. 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 is going to give you a leg up in negotiating your purchase.

Round-up the Troops

Trying to save money by being completely self-sufficient is a poor decision when you plan on purchasing a dental practice. In the long-run, investing in advisors will save you a lot of trouble. Here are a few people you’ll need:

• A CPA who has experience guiding dental practices and other small businesses on how to stay compliant and reduce their tax burden. You will need an accountant who can help you develop tax-saving strategies. You’ll want an accountant to advise you on the best entity structure for your small business (LLC, PLLC, Sole Proprietorship, S-Corp, C-Crop).
• A Bookkeeper who is experienced in a bookkeeping system like Quickbooks. A certified Quickbooks ProAdvisor means they are certified by the makers of Quickbooks as skilled with the accounting software.
• An attorney at law to protect your interests and review documents.
• A consultant for your new dental practice will prove invaluable in helping you navigate toward success.
• Establish a relationship with a bank early on. Getting prequalified, and ready to finance, helps you keep perspective on how much you can afford and how to put in a good offer.
• An insurance representative will assess the value of your business and evaluate risk to see how much coverage you will have to have.
• It never hurts 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 pro that knows online marketing.

Purchasing your first dentistry practice is a huge step in the career of any DDS. Be prepared for success.

ax 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 CPA John Huddleston is a frequent publisher of tax saving ideas.