Purchasing a dental practice is an impactful decision that one shouldn’t take lightly. Failing to recognize key warning signs of a bad deal could cost you significantly in the long-run. As such, it’s important to keep your eyes peeled and fully investigate a dental practice before making a purchase. Here are some key red flags to look for when buying a dental practice.
Rushing to close quickly
While it’s normal not to want to drag out a deal for as long as possible, be wary if a seller is especially anxious to close. If they are pressuring you to close in a short amount of time, there is a chance that they may be hiding something. To avoid getting an unpleasant surprise after you’ve already purchased the practice, make sure to take your time to fully assess all aspects of the business.
Withheld information
One of the biggest red flags to look for when buying a dental practice is if the seller is withholding information from you. Before making such a substantial purchase, it is essential to know exactly what you’re buying. A seller may ask you to sign a non-disclosure agreement before gaining access to sensitive information; however, they shouldn’t refuse to provide relevant documents, such as past financial and payroll records.
Declining production
If you notice that the production of the dental practice you want to purchase is in decline, it’s a good idea to do some digging. While there can be many reasonable explanations for such a decrease in production, the drop could hint at a greater issue. If the practice owner can’t provide a reasonable cause for their declining production rates, you should take caution.
Losing patients
Maintaining a loyal patent base is essential to the long-term success of a dental practice. If you discover that patients are consistently jumping ship, maybe you should too. Before purchasing the practice, you should determine the cause of its low patient retention and determine if you can resolve it without extensive alterations.
To help you address and locate red flags like the ones listed in this article, consider enlisting the help of Henry Schein Dental Practice Transitions. Due to our in-depth knowledge and hands-on expertise, we are the leader in dental practice transition planning, sales and valuation, and dental practice financing. Whether you’re putting your endodontic practice up for sale or looking to purchase a practice in the United States, our team of experts will help make the transition as smooth and efficient as possible. For more information regarding our services, contact us today.
