The Simple Guide to Buying a Dental Practice & Getting a Great Deal

By Manfred Purtzki

Have you been thinking about buying your own dental practice, but are worried about getting a great deal?

For the entrepreneurial dentists who are planning this career move, The Simple Guide to Buying a Dental Practice & Getting a Great Deal is here to guide you to success. Purchasing your own den

• Language: English
• Publisher: Blue Beetle Books Inc.
• Release date: Apr 18, 2022
• ISBN: 9781777828738

Book preview

CHAPTER 1

I

Planning the Practice Purchase

Have you thought about purchasing your own dental practice? Perhaps you graduated a year or two ago and have been working as an associate so you can pay down your student loans. You are committed to your profession and are determined to succeed—to make a difference. Working as an associate is a great way to begin your career, but it can also be limiting. You are probably handling patients with less complex care needs that are less interesting and less financially beneficial. If you are ambitious, you will want to stretch yourself professionally and as a businessperson. Buying a dental practice may be exciting and help you do that, but it can also be risky. You are not alone; most graduating dentists and associates dream of owning a dental practice one day and building it into a success beyond their expectations.

Purchasing a dental practice is a significant commitment, one you should not take lightly. The golden key is to find a clinic that is right for you—and to do it the first time. There are no do-overs; with the right practice you can make lots of money and have fun along the way, but choose unwisely and it can be a career-buster. The grief and the financial consequences of getting into a bad deal can be devastating.

Now you are suitably scared and thinking, being an associate may not be so bad after all, let me assure you that I can lead you safely through the minefield of buying a practice and help you get the best deal possible. It’s what I do.

The Self-Assessment

First, you need to take a step back—way back—and make sure owning a practice is something you really want to do. That practice you’ve seen advertised is like the golden retriever pup at the shelter with big brown eyes begging you to take it home. They have a lot in common; they are long-term commitments requiring constant attention. On the other hand, they can also be incredibly rewarding. You just need to know the scope of what you are taking on—the good, the bad, and the poopy. Does owning a dental practice suit your personal goals, aspirations, and capabilities?

Answering the questions below will give you insight into whether this career path is right for you. Be honest with yourself and write your answers down—there is space at the end of the book. Be truthful—no one is looking.

Why do I want to purchase a practice? Am I looking to earn more money, be my own boss, or am I looking to challenge myself professionally? Or perhaps, if you are honest with yourself, it’s because you can’t stand the dentist you are working for, or you are envious of fellow graduates who have opened their own practices.

Do I possess an entrepreneurial drive? Am I excited by the idea of running a business? Am I willing to accept the risk of ownership and take full responsibility for the success or failure of my practice? Do I have the business acumen necessary? If not, am I willing to educate myself in what it takes to run a business?

What type of dentistry do I enjoy? What are my long-term professional goals? Will owning a practice help me achieve these goals? Are there other options that will meet my needs?

Where do I want to commit to living for the foreseeable future? Where would my spouse and children choose to live?

Am I willing to make the necessary sacrifices in terms of the time and energy required to build up the practice?

Do I have the confidence in my leadership abilities and practice management skills to be a successful business owner? Am I prepared to learn the business skills of becoming a team leader, communicating with patients, and assuming the role of CEO of my practice?

Do I want, or need, to practice with an experienced dentist for their mentorship and sharing of management responsibilities? Do I want to consider joining a group?

Am I ready and willing to make a significant financial commitment? Am I prepared to spend the next fifteen years on the treadmill, paying off a house mortgage and practice loans? How will that impact the lifestyle I want to lead?

Will I be able to mentally cope with the financial exposure that buying a dental practice necessitates?

What are my spouse’s career needs? Have I considered them?

What are my children’s education needs?

Can I count on the unwavering support of my spouse, particularly during the start-up phase of practice ownership?

Look back at your answers. Have you been honest with yourself?

The Challenges Ahead

No one said this was going to be easy. There are a bunch of hurdles that you will need to overcome if you choose to embark on this journey, so let’s get them out of the way. Don’t worry, none of them are insurmountable.

The Money Challenge

If you are an associate with ballooning student loans and a house mortgage, the idea of borrowing a million dollars to purchase a practice can be daunting. However, the extra income you can earn as an owner will be enough to pay back the purchase loan within a 7 to 10-year time frame. Practice ownership is an excellent investment.

The Self-Confidence Challenge

You may feel that you are not an entrepreneur, and that managing a practice is outside your comfort zone. The truth is you don’t need to be an Elon Musk or an Arianna Huffington to run a dental practice. What you need is a dose of common sense, a willingness to work hard, and the desire to put the needs of your patients and staff ahead of your own. If you surround yourself with a team of capable advisors, you will be on your way to making ownership a reality.

The Fear of Failure Challenge

There is a degree of risk in everything we do; no matter how thoroughly you investigate the practice you are considering purchasing, you can never guarantee that it’s a sure winner. However, many dentists overestimate the risks when buying a practice. One common misconception is the number of patients they will lose during a transition to the new ownership—it’s lower than you might think.

The Spouse Challenge

A word of warning: if your spouse doesn’t like the location of the practice you are considering purchasing, don’t buy it—you need to decide jointly. Having your spouse on your side will save you a lot of grief, not to mention the possibility of a costly future practice relocation.

The Associateship Challenge

It is common for new dentists, suffocating under a $300,000 student loan, to continue working as an associate until their student debt has been repaid. On the face of it, this sounds like a sensible plan, but if you want to pay off your loan quickly, consider becoming an owner as soon as you can. Use a short-term associateship to hone your clinical and patient communication skills, but enjoy the benefits of ownership as soon as is