To buy or not to buy – Paul Harris of Goodman Grant SolicitorsFeatured Products Promotional Features
Posted by: The Probe 14th July 2019
The decision to purchase your first dental practice is always a tough one. There are a whole host of questions that will be circulating in your head, with the ultimate question being, “Am I ready?” In the hope that I can help you come to your own conclusions on whether you are ready or not, I’ve set out a number of considerations to take into account before making the jump from associateship to dental practice owner.
You would be surprised by how many purchasing clients look to start the legal process without even establishing whether they can get the necessary finance in place. This is fundamental to any practice purchase and I would suggest that it was one of the first tasks you undertake to see whether you have the personal finances available, or if a lender will lend you enough money for the practice purchase. If applicable, it is also important to consider whether the terms and – more specifically – the monthly repayments provided by the lenders would make the acquisition financially viable for you.
Any business owner will tell you that to be successful requires a lot of hard work and dedication. The following adjectives are often used to describe some of the world’s most successful business owners: confident, brave, competitive, creative, passionate, disciplined, resourceful, adaptable, decisive… The list goes on.
The point I am trying to make is that you have to be ready to change your mind-set from an associate to an entrepreneur. You won’t just be coming into a practice to treat patients. You will be expected to make important decisions about what, when and how something must be done in order for the dental practice to be sustainable and, hopefully, grow.
Another point to take in to account is that as an associate, you have your set working hours. You go to the practice, do your job and go home at the end of the working day. As an entrepreneur, whilst you might not be chained to your dental chair or office, you will always be thinking about your practice, what it’s currently doing well at and what should be done to help it improve. It is important that you are ready and willing to take on this commitment and weigh this up against any other commitments you may have that require your attention – a young family, for example.
It is important that you are clear on what type of practice you want. Is it mixed or a purely private practice? Do you want to acquire the freehold property rather than sign up to a 10 to 20 year lease? Do you want a small single-hander practice or a large multiple surgery practice? Is setting up a squat practice an attractive option? There’s numerous other questions I could note down here, but it is important to appreciate your budget, establish what is available on the market and decide what aspects you may be willing to concede on in order to become a dental practice owner.
A final point to consider here is whether the practice principal(s) who you currently work for may consider selling to you. Dependant on how long you have been working at the practice, you are likely to be familiar with the staff and know the ins and outs of how the practice operates, so the stress of running the business for yourself would ultimately be reduced if you were to take it over. Subject to someone running the numbers on the financial viability, this is certainly an avenue worth exploring.
More often than not, the decision to buy a practice is driven by its financial rewards. Yet, in eagerness to get on the dental practice ladder, many potential purchasers neglect a vital step in the acquisition process: financial forecasting.It is important to appreciate that just reviewing the bottom line figure in the practice accounts will not in itself provide a view of your potential earnings. I always strongly urge anyone who is considering buying a practice to engage a dental specialist accountant/financial advisor and ask for a full cash flow forecast to be carried out.
As many experienced dentists will tell you, purchasing your first dental practice is a significant investment. That’s why it’s always in your best interests to seek professional support from trusted dento-legal solicitors like Goodman Grant, who can help guide you through the complexities of dental practice sales and acquisitions.
Paul Harris of Goodman Grant Solicitors – contact at firstname.lastname@example.org
For more information, visit www.goodmangrant.co.ukor contact your nearest office:
London: 0203 114 2133
Leeds: 0113 834 3705
Liverpool: 0151 707 0090
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