Questions to Ask Before Purchasing a Dental Practice

As a dentist, purchasing a dental practice is one of the biggest financial decisions of your life. It requires collecting important information about the practice with the same attention to detail that you give your patients. Much of this information can be obtained by simply asking the right questions. Below, our dental practice purchase attorney outlines some of the most important questions to ask before making an offer.

How Many Active Patients Does the Practice Have?

There is no clear definition for an “active patient,” but most dentists consider any returning patient for the past 24 months as active. Confirming the number of active patients can be done fairly easily through their practice management software. However, the software can only provide you with an accurate number if the information has been entered correctly. You can also ask to view the patient charts, which can give you an idea of how many active patients the practice currently has.

Is it a Buyer’s Market? 

There are many ways to determine if a practice is in a buyer’s market. Consider if practices are listed for longer periods of time, if there are fewer competing bidders at the asking price, and if dentists are willing to make concessions on the transition, such as including the accounts receivable in the purchase price or staying on to assist a buyer for a lower to no percentage of collections. A buyer’s market will give you more leverage over contract terms and valuations.

Where is the Practice Located?

Visibility for your practice will make a huge difference, so it is critical that you consider the location of the practice. If you are not purchasing real estate along with the practice, review the lease very carefully to determine if there are options to renew that match your loan terms. The location should also fit the patient demographic you are looking for and if there are many other competitors in the area.

Is the Seller Planning to Stay On?

It is also important to talk to the seller about their long-term plans and whether they plan on staying on for some time after the sale. This is typically only possible when there are many patients to keep both dentists busy.

Will the Seller Establish an Escrow Account for Warranty Work or Agree to Reimburse for Defective Treatment?

When purchasing a dental practice, you should only be responsible for the work you perform. If a patient has an issue with work done previously by the seller, the seller should be responsible for paying for that work, including lab fees. This can be done by including provisions in your purchase agreement to protect you, which may also include setting up an escrow account that you can withdraw from to be reimbursed for the work.

Our Dental Practice Purchase Attorney Can Ensure You Ask the Right Questions

When purchasing a dental practice, you will have many questions. At AGS Law, our dental practice purchase attorney can ensure that you ask the right questions that will provide you with the answers and information you need to make the best decision possible. Call us today at 801-477-6144 or fill out our online form to schedule a consultation and to learn more about how we can help.