The Importance of Building a Strong Team of Advisors
Buying a dental practice is typically a one-time event and the largest purchase a dentist will make in his or her lifetime. While McLerran & Associates usually represents the selling dentist in our transitions, our goal is to put together a win-win transaction for all parties involved. In addition to guiding the buyer through the process of buying a dental practice, we focus on helping the buying dentist build a strong team of advisors to obtain professional guidance on each aspect of the purchase (due diligence, contract review, transition, etc.). Here is a list of advisors that we recommend a buying dentist have on their team:
- Dental Attorney – It is imperative to utilize an attorney who is experienced in handling practice transitions and understands the nuances involved with buying a dental practice. The attorney should represent the buyer’s interest in reviewing the asset purchase agreement, real estate contract, office lease or lease assignment, and any other documentation involved in the purchase. After consulting with the buyer’s accountant, the attorney should also assist the buyer with setting up the corporate entity that will be purchasing the practice. An attorney should be a deal maker, not a deal breaker, and work to protect the buying dentist’s interests without damaging the goodwill between the buyer and seller during the process.
- Dental Accountant – Hiring an account who is experienced in working with dental clients will also help to ensure a doctor’s success when buying a dental practice. A knowledgeable accountant should be able to assist the buyer in evaluating the practice financials, cash flow, and purchase price of the practice. They should also understand and advise the buyer regarding the tax consequences associated with the allocation of the practice purchase price and offer guidance on what type of corporate entity the buying doctor should establish to serve as the owner of the practice. The accountant’s role is not finished once the sale is complete, as they can continue working with the new owner to properly set up their financial books and put systems in place to monitor overhead and collections as well as prevent fraud and theft.
- Dental Consultant – A dental practice management consultant can help the buying dentist get “under the hood” of the practice by assisting with a chart audit and evaluating practice management systems, collection policies, treatment planning, patient base and new patient flow, marketing, etc.This analysis can allow the buyer to assess the health of the practice, identify strengths and weaknesses, and determine if the office is a good fit for them. A practice management consultant can also provide ongoing consulting during and following the transition to ensure the practice is operating efficiently.
- Dental Lender – Buying a dental practice is typically contingent on the buyer’s ability to secure financing for the amount of the purchase price. Working with a lender that understands how to evaluate dental practices and has experience in financing practice acquisitions can help to ensure a smooth and timely transition.
When the time comes for you to take the step towards buying a dental practice, be sure to surround yourself with advisors who have the experience and knowledge to protect your interests throughout the transition process.
