• Wed, Apr 19, 2023
  • What Questions Should I Ask When Buying a Dental Practice?
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  • When buying a dental practice, it is important to ask a variety of questions to ensure you have a clear understanding of the practice's financials, operations, and other relevant aspects. Here are some questions you may want to consider asking:

    1. What is the practice's financial history? Ask for detailed financial statements, including profit and loss statements, balance sheets, and tax returns, for the past few years. Inquire about revenue, expenses, and any outstanding debts or liabilities.

    2. What is the patient demographic and retention rate? Understanding the patient base of the practice is crucial. Ask about the demographics of the patients, their retention rate, and any marketing strategies employed to attract new patients.

    3. What is the condition of the practice's physical assets and equipment? Inquire about the age, condition, and maintenance history of the dental equipment, chairs, and other physical assets to assess their value and potential replacement costs.

    4. What is the staff structure and what are their roles? Ask about the number of staff members, their roles, and their compensation/benefits. Inquire about any existing employment contracts, non-compete clauses, right of first refusal clauses, and staff turnover rates.

    5. What is the practice's reputation and goodwill? Inquire about the practice's reputation in the community, patient reviews, and any pending or past legal or ethical issues that could impact its goodwill and patient base.

    6. What is the lease agreement or real estate ownership status? If the practice is located in a leased space, ask about the terms of the lease, including rent, lease duration, and any renewal options. If the practice owns the real estate, ask about the property's value, condition, and any associated costs or liabilities.

    7. What is the transition plan and support offered by the seller? Inquire about the seller's willingness to provide transitional support, such as training, mentoring, or introductions to patients and referring doctors, after the sale. Ask about any potential restrictions on competing with the practice.

    8. How well prepared is the seller for due diligence? Ask about the steps and timeline for conducting due diligence, including reviewing legal documents, financial records, and any regulatory or compliance issues.

    9. Are there any pending or potential legal, regulatory, or compliance issues? Inquire about any pending or potential legal or regulatory issues, such as malpractice claims, audits, or violations, and their potential impact on the practice.

    10. What are the future growth prospects and opportunities for the practice? Ask about the practice's growth prospects, potential for expanding services or patient base, and any plans for marketing, technology upgrades, or practice improvements.

    It is essential to consult with experienced professionals, such as dental brokers, business attorneys, accountants, and dental practice consultants, to ensure a thorough evaluation of the practice and a smooth buying process. Remember to review all relevant documents, contracts, and financial records carefully, and seek legal and financial advice before making any decisions.

    If you are considering selling or acquiring a dental practice, contact:
    Eric J. Gall
    [email protected]

    Source: Conversation with ChatGPT on April 18, 2023