Why buy should I buy this practice?
Every Principal needs to make certain the practice they are looking to buy, is the correct fit to their skill set, current staff, patient base they like to treat, and within budget these few points will path the way for a long and successful ownership of the practice.
How do I buy a practice?
To purchase a practice takes a team of specialists including Accountant, Solicitor, Finance agent, and practice broker, depending on the purchase type. there are number of considerations to take into account.
Is the current owner staying on if so under what terms and payments options, are you buying in a trust, PTY LTD company, or a partnership,
what would be the settlement terms of the deal and consider the lease also as this is very important especially if finance is involved. there are many people involved and fees need to e kept in check along the way also.
Should I keep the current owner in the practice?
The answer is not necessarily, but it is a good idea to keep them for at least 6 – 12 months it helps to “DE-Risk” the patients in other words they still see their face and you can be introduced personally which helps to calm the patient, it also depends on the terms the dentist wants and whether the practice can sustain them as well.
What is the normal time frame for transition last?
It all depends on the deal and whether the current staff are retained, what is involved in the transition how big the deal is, finance approval, and so on but in normal circumstances 30 – 60 days sees most deals completed
How are Dental practices valued?
How do you determine a figure? It is extremely difficult to make an assessment based on limited, inaccurate, or incomplete data; we have a number of benchmarks to help us in determining a value, for example:
• Ebitda is based around multiplying the before tax profit by a multiple used mainly by financial institutions for loan purposes.
• Another is by valuing the last 3 years revenue then using a calculation to determine a percentage which includes risk factor.
• It is always worth getting a second opinion from an expert, we use an expert with over 40yrs in the dental industry
How do I finance this purchase?
Most practices are financed through specialist lending institutions set up just for Medical, Dental, Allied health purchases. very few are bought using cash
We use a number of known lenders and offer personal introductions to them when required.
Are there Tax issues in the transition?
You should always consult with your specialists before making any decisions of this nature, but in general it depends on the structure of your business and how you wish to purchase it w
Why Should I use an accountant and solicitor?
You can not complete these types of deals without specialist help and advise both parties need to use their specialists to make sure the deal is completed and to step you through the minefield of legal and accounting problems that can arise in these transitions
Accountants are necessary to help you though the due diligence period as well as to review the breakdown of purchase price for tax purposes. Solicitors generally are employed to write the purchase contract and review leases finance instructions and the like.
What other fees and charges expenses that are part of the practice sale?
Normally there are Broker, Lawyer, and Accountant fees, oftentimes the finance company will impose a fee for setting the loan but it usually included within the loan. In addition there will be la gal fees for the lease security deposits, you may use outside consultants for the transition which would amount to further costs.
Who looks after the lease?
Depending on whether there is a new lease or transfer the buyer would initiate the new lease or transfer along with the current owner of the lease
If the real estate is part of the deal your legal and finance team would be involved.