7 Tips for Purchasing a Dental Practice

Buying an established dental practice is a huge life and career decision. Before making this investment, it's smart to do your research and due diligence to make sure you're successful! Below are some tips on dental practice purchases.

7 Tips for Purchasing a Dental Practice

• Tip 1 – Verify that you have an accurate count of active patients. The numbers can sometimes be inflated to look more attractive to buyers. Inaccurate counts are less of an issue now than in the past, thanks to practice management software, but it's still important to do your due diligence.
• Tip 2 – If extensive dentistry has already been done on most patients, then much of the future production from active patients will be in hygiene. In short, the more complete dentistry that has been done, the less ROI.
• Tip 3 – Accounts receivables can be incorrect if the practice hasn't been running day sheets, generating statements each month, tracking insurance claims, or closing out their month- or year-end reports.
• Tip 4 – A dentist to patient ratio of 1:2,000 is the lowest you should consider going. A ratio of 1:3,000 would indicate success, and a ratio of 1:4,000 would be lucrative. Keep in mind that these numbers may be lower in rural areas.
• Tip 5 – Always review the seller's insurance agreements. It can be dangerous to assume that everything you're being told is accurate.
• Tip 6 – After purchase, avoid pushing procedures or treatments on the existing mature patients. Make sure to gain the trust of the older, established patients before making changes or pushing treatments.
• Tip 7 – Lastly, request that the selling doctor sends out a letter on the office's current letterhead. Where appropriate, include a personal note and the patient's first name. A few months after taking over the practice, the buyer can send out their own introductory letter or pamphlet.

For assistance with selling or purchasing a dental practice, don't hesitate to contact CTC Associates to talk about dental acquisitions and sales!