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It can be greatly beneficial to partner with experts in order to properly assess the practice and give you the guidance and knowledge you need to make this purchase successfully. Buying a dental practice can be complicated and stressful at times, this is why it is important to be well-informed and supported by experts that are also skilled and experienced in dental practice accounting. Before you buy your first dental practice, it is important to have a fair estimate of how much dental practices sell for as well as if it is worth it to purchase one rather than opening a new one yourself. In addition to this, it is vital to be prepared on how exactly to go about buying a dental practice.
There are a variety of factors to consider when evaluating the price you should pay for a particular dental practice. These include different approaches such as the asset approach, the income approach, and the market approach.
The asset approach looks to value a practice based on the assets they have whilst the income approach bases its value on the practice’s income stream. Lastly, the market approach looks at similar transactions for similar companies within the market to see how they were valued.
This process is often complex and includes negotiations and technical details that can be incredibly confusing and stressful to go through alone. Partnering with an expert in dental practice accounting can help make this process a lot easier for you.
Making the decision to buy a dental practice can be a great opportunity but should not be taken lightly. Depending on the state of the practice when you buy it, this can be a great way to speed up the process toward having and running a profitable business. This is another reason to ensure your pre-purchase assessments are all accurate and you are ready for the commitment ahead.
One of the major benefits of buying a dental practice is that it comes with an established presence and patients. This means that you can turn a profit from day one rather than waiting to build a client base from scratch at a new practice. You also have the possibility of inheriting equipment, systems, and experienced staff to help make the transition as seamless as possible.
With that being said, if purchasing the dental practice vastly exceeds the amount of money you would need to build a new practice to that scale, then it may not make as much financial sense to buy it.
Another thing to note when buying a dental practice is the underlying costs of upgrading, updating, and rebranding the practice as well as the number of patients the practice may lose due to the new ownership. All these factors should be taken into consideration when deciding to buy a dental practice.
With the right knowledge and guidance, buying a dental practice can be made simple and easy. Here are a few key steps to take when buying a dental practice:
1
The first step is to decide on where you want your practice to be. Consider the amenities around the area for you and your family to have the quality of life that you want.
2
Once you have decided on where you want to buy a practice, you can start to look for available practices that are for sale online or via a dental practice broker.
3
Partnering with experienced professionals can help make the entire purchasing process easier for you. Hiring consultants or accountants that are experts in dental practice accounting is essential to help with the due diligence of the purchase.
4
As mentioned above, experienced professionals can help you do extensive research on the practice and its track record to see exactly what you are getting yourself into. This includes evaluating and analyzing various financial statements such as the recent profit and loss statement, recent balance sheets, and the income tax returns of the practice. Evaluating and breaking down these financial statements are the best way to determine whether the practice is profitable and worth its valuation.
5
Another step to help evaluate the practice for yourself is to take stock and appraise the practice and all its facilities. This includes the property, equipment, systems, and staff that you would inherit when you purchase the practice from its previous owner.
6
The next step is to put together an accurate offer based on all the information and advice that you have received so far.
7
One of the final steps in purchasing a dental practice is to secure the finances needed to make the purchase possible. Decide on your means of payment and discuss the transaction details with the seller in order to confirm the purchase.
8
The final step is to sign the Practice Sale Agreement and complete the closing tasks in order to finalize the purchase of your new dental practice.
The new year is the best opportunity to make new business moves to start fresh or start something new. If you ever feel overwhelmed or think you cannot do it, always remember that our expert team is ready and waiting to help you with whatever your challenge may be. Our team is skilled and experienced to help increase your morale, increase your profit, and help you run your practice as efficiently as possible. We have done it for many other dental practices across the country and are ready and eager to help you as well. All you have to do is reach out and ask!
With the help of our expert team and wide variety of business services, we are experienced in dental practice accounting and can help you and your practice every step of the way. To find the best solutions to your business challenges, contact our dental practice accounting team today!
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Take the first step towards a more prosperous practice. This tool will help you evaluate and enhance various financial aspects of your business in just a few clicks.
