4 Things You Should Never Say When Buying a Dental Practice

Dental school is necessary for aspiring dentists because they must complete an accredited dental program to become licensed and eligible for practice. Most new dentists look for another practice to work for or start their own. On the other hand, some new dentists try to own an existing practice. While it may seem like a huge undertaking, it can be done.

At its core, owning a dental practice is much like buying another business. However, a dental practice provides specialized services and requires unique skills and knowledge. Because of this, negotiations tend to be more complex than those of other businesses. Furthermore, there are certain things you must refrain from saying during negotiations because they could hurt your chances of success. These include:

#1 – How Much of Your Financing Was Approved

When buying a dental practice, you should only reveal the amount of financing you have been approved for once you have signed a purchase agreement. This is because you do not want the seller to know how much you can afford and may be willing to pay. This can lead to the seller raising their asking price, which could lead to a breakdown in negotiations. This will ensure that the seller cannot use the financing information to their advantage during negotiations.

#2 – The Minimum Non-Compete Mileage

The minimum non-compete mileage is the minimum distance you must stay away from the seller’s practice to avoid competing for the same patients. This distance is typically determined by the state where the practice is located, so you should check with your local governing body to see the specific requirements.

Generally, the minimum non-compete mileage will range from 10 to 25 miles. This means you must purchase a practice within 10 to 25 miles of an existing practice to open a competing practice within that distance. This is to protect the seller’s practice from unfair competition.

Your best approach for this would be to give a vague approach and consult with a local attorney or governing body to get an exact answer for your particular situation. Every state has different regulations and requirements, so you must understand the rules and regulations before making any decisions.

#3 – Your Current Job Status

Buying a dental practice is a big commitment, and you must be in a position to take on such a responsibility. Before you purchase a practice, you should ensure that you are stable financially and in employment. This means that you should have a good job, a steady income, and be able to take on the added responsibility of owning a dental practice.

You should also have enough savings to cover the costs associated with purchasing and running a practice, including the cost of the practice itself, any renovations or upgrades that may be necessary, and any additional staff or equipment. This also means managing the practice’s day-to-day operations, such as patient scheduling, billing, and marketing.

#4 – Your Timeframe for Closing the Deal

You should never say your timeframe for closing the deal when buying a dental practice because the seller may take this as a sign that you are desperate and try to take advantage of your urgency. You should also be aware that buying a dental practice can take several weeks or even months and that you should be prepared to be patient and stick to your budget.

For this reason, you must work with the seller, their lawyer, and other professionals to ensure everything is in order before closing the deal. You should also ensure that you have the funds to cover the purchase price and any closing costs that may arise.

Conclusion

Buying a dental practice is a huge responsibility, but it can also be an excellent opportunity for you to invest in a business and build a successful career. A dental practice is a long-term investment, so you must take your time and do your research before committing to the purchase. When you do, your new practice can thrive and be successful.

If you’re looking to buy a dental practice, Ash Dental CPA can help you! We understand the financial aspects of dentistry, so we will ensure everything is done correctly and legally. Call (508) 458-6789 today for a consultation!