In talking to young dentists all over the country, we get this question a lot: How can a New Dentists Find a Practice to Buy? Fortunately, the majority of dentists still understand the benefits of owning their own practice (far greater income and control/freedom over life and how you practice) and are courageous enough to take the plunge.
But how to find the right practice? And what if you can’t find the right practice quickly? Several of your friends from dental school had connections or family that helped them get started. Some of your other friends have mentors they’ve found that have helped. But for whatever reason, you’re coming up dry. Or you don’t know where to start. What to do?
Unfortunately there isn’t one easy answer. Finding a practice to buy is a lot like finding a spouse – you look and look and look, and then rely a little on luck. But the trick is that in order to find some luck, you have to look, and look hard.
To cut to the chase, here are some of the most common ways we’ve seen doctors successfully find practices to buy.
Dental Practice Transition Brokers – Most practices today are still sold through brokers. The process to buy a practice sold by these brokers is to 1) see the listing, perhaps on the broker’s website; 2) contact the broker; 3) perform due diligence on the practice (with the help of your financial team and attorney); 4) get a loan from the bank and buy the practice.
So the first thing to do here is to find several practice transition brokers who work in the region of the country you’re interested in and to contact them. To do that, we recommend a simple Google search, for example: “dental practice transition brokers texas.” Don’t forget to expand the geography of your web search beyond just a city to a state or region. And there’s no reason why you can’t be working with several brokers at a time.
Even if these brokers don’t have a practice listed that interests you, we still recommend you contact them and get on their mailing list for future opportunities. And finally, remember that brokers get paid by the seller. As friendly and as effective as many of them are, they ultimately work for the seller.
Dental Supply/Equipment Reps – If you know the state, or better yet city, you want to live in, dental equipment reps can be a great resource. Call around and ask who the Patterson/Schein/Burkhart reps are and then call them directly. These folks have their ear to the ground and regularly talk with a lot of dentists in your target area. Take them to coffee and ask for their opinion on the area, demographics, different PPO providers, etc. They know a lot, and you could be one of their next clients. Show them that you’re serious about buying, and they may know of opportunities for sale before anyone else.
Dental Society Websites – We’ve had several clients find practices that were not listed elsewhere on the classified section for state and city dental associations. Some dentists are interested in shopping their practice themselves before involving brokers, and you just may find something here that you wouldn’t find other places.
Pounding the pavement – This is the most difficult way to find a practice, but there is no better way to get a feel for an area than from the dentists who already work there. Imagine yourself as a successful veteran of an area, and a new dental grad offers to take you to lunch to ask questions and gain some of your vast wisdom. You’d feel flattered! So will the dentists in the area where you’re looking. Plus, they may know of a doctor (or themselves!) who are thinking about selling. A sharp, promising young dentist looking to buy could be just the nudge they need…
The most important point to remember is to cast your net wide. Don’t just work with one broker. Don’t just look at one practice. Keep your options open, and talk to everyone!
Additionally, when you think you’ve found the one, keep your eyes open. We’ve seen many young doctors put all their eggs in one seller’s basket, only to have the seller sell to someone else at the last minute. There are a lot of “runaway brides” in the dental practice transition world.
And when you think you’ve found that perfect practice, come talk to us. In addition to helping you manage the very big project of buying a practice, we’ll do a full practice analysis and help you answer the three biggest questions of every practice transition:
- Should I buy this practice?
- If yes, how much should I pay for it?
- If I pay that much, how much can I expect to make?