Buying a Dental Practice Hinges on Fair Negotiations.
Make Your Purchase a Win-Win!
So, you’re contemplating the next step in your dental career: a dental office to call your very own. This is what you have dreamed of for as long as you can remember. How hard could a purchase be? After all, Dr. X wants to sell and you want to buy…this should be easy, right?
Once you find your dream practice, how do you know that you are getting a fair deal? What are the major items to be negotiated and what is the best strategy for a successful purchase? Is there an office lease or will you purchase the real estate, too? What about the accounts receivable or the equipment and inventory? These are just some important factors to consider and potentially negotiate when looking at buying a dental practice.
Look Before You Leap:
Plan the Right Way Before Buying a Dental Practice
Planning is always #1. Just like a successful case presentation, the more planning that goes into your purchase, the better the chances of a successful outcome all around. Research on location, patient demographics, the number of dentists in the area, population growth and potential referral sources are some areas to consider. Once you have familiarized yourself with those items, you will be ready to narrow your search and make an offer when you finally find the right practice for you. The more information that you have about a particular practice for sale, the better your chances of a successful dental practice purchase.
In the popular book, 7 Habits of Highly Effective People, Stephen Covey recommends starting with the end in mind. Envision the success of the purchase transaction before you even begin your purchase process. Have your ideal outcome in mind and do not be afraid to present it from the start. Ask as many questions as possible about the practice, particular dental philosophy and even the seller’s plans for the future.
Better to Collaborate Than Compete
Keep in mind that the negotiation and purchase process of buying a dental practice may become challenging and stressful. That’s perfectly normal. To help ease all of this, the best negotiators think in terms of cooperation and collaboration instead of competition. Competitors favor “I win, you lose” outcomes; but the best-case scenarios often occur when you negotiate from a collaborative mind set. This type of negotiation happens when both parties work together for the common good. “How can we structure this transaction so we are both treated equitably at the closing table?” The answer is fair compensation for a fair market value. This is the best way to work toward the common goal of a successful purchase and sale.
In the end, research has shown that while price is often an important factor in purchase negotiations, money does not typically correlate as strongly to lasting happiness as friendships and social ties do. Buying a dental practice involves people and personalities as much it involves price and terms. Balance among all of those factors is a worthy goal to aim toward for a long-lasting and financially rewarding dental practice.
Contact A Henry Schein Professional Practice Transitions Professional
Have a question about selling, buying or transitioning a dental practice? Contact us online and have a Henry Schein Professional Practice Transitions Expert help you take the stress out of buying or selling a dental practice.
Henry Schein Professional Practice Transitions, Inc. is a national leader in dental practice transitions. A subsidiary of Henry Schein, Inc. they provide expert guidance for selling and buying dental practices, assessing partnership and associateship opportunities, and performing dental practice appraisals and valuations.