Purchasing a Dental Practice
By Dr. Richard M. Uttard Jr.
So, you made it through dental school and the gauntlet called NERB. You can now focus on your career and acquiring a practice. There are two options at this point: establish a new practice or buy an existing one.
For the first option, you need to find a location, set up an operatory and begin your practice. The benefit of starting a practice is you can mold your practice to your vision, whereas the benefits of purchasing an existing practice are a supply of patients and cash flow. Also, depending on office size and staffing, your overhead could be low if you establish a new practice. The drawback to this can be patient flow, not to mention that your student loan payments are beginning and you have this nasty habit called eating.
In this article, I will discuss my experience of buying an existing practice.
I began as an associate to the practice. While working as an associate, I gained valuable practice management experience. I bought the practice three years later when the owner retired. The transition went smoothly because of our planning.
The first step in the process is deciding where you would like to live and practice. This will allow you to begin your search. Some resources available to you are as follows:
- Pennsylvania Dental Association (PDA) Placement Service lists are available for associateships and practices for sale.
- Attendance at local dental meetings in the area to meet local dentists can bring about valuable leads.
- Dental supply companies also offer listings.
After finding several practices, you can begin the interview process. You will need to evaluate the practice type to see if it will fit your philosophy and style. You will have to discuss timelines for the associateship, buy-in, buy-out and retirement of the senior dentist. You also will need a practice appraisal. This will help determine the purchase price of the practice. There is still room for negotiation depending on terms and conditions. There are several companies that can help you with an appraisal. You will need an attorney to review all the documents for association and purchase. The appraisal and attorney are worth the expense to protect yourself.
This is a brief overview of the process. If you have any questions, please feel free to call me at my office (610) 826-3288. PDA has resources available to you; all you need to do is call (717) 234-5941.