Due Diligence for Buying a Dental Practice
How We Get the Answers You Need
At Next Level Consultants, our due diligence process is designed to accomplish one major goal—give you complete peace of mind when buying a dental practice. By looking at every aspect of a practice in extreme detail, we can ensure you’re making the right decision for your career and business, all the while helping you avoid potential pitfalls. When we say that we’re thorough, we mean that we look at things that most other consultants skip, because it’s always better to have too much information in this situation rather than too little! Thankfully, we can boil down our approach into an easy to understand 8-step process.
Why Choose Next Level Consultants?
- Performed Due Diligence for Hundreds of Dental Practices
- Passioned, Engaged, & Highly Invested Team
- Deep Understanding of the Dental Industry
Our 8-Step Due Diligence Process
After you have decided to buy a specific dental practice and sent a Letter of Intent, our team will start the due diligence process, which will involve:
Taking a Deep Dive into the Financials
In essence, we will look at how much the practice is taking in, its debts, payroll, and pretty much anything that has a “$” next to it. This helps us get a candid picture of the financial health of the practice and figure out exactly how much money is going where.
Finding Any Potential Pitfalls
Has a lien been placed on the property? Is the practice behind on rent? Is there a lawsuit aimed at the practice? These are all red flags we know to look for, and by keeping an eye out for them and other pitfalls, we can make sure you don’t end up having to fix a problem you didn’t cause.
Insurance Contract Analysis
One of the most important factors when starting a new dental practice is getting the right insurance credentials as soon as possible, and by looking at the current contracts at the practice, we can hone in on which providers you need to focus on versus those that don’t require as much attention.
Looking at Patient Demographics
One of the first things we do when helping someone buy a dental practice is look at the demographics of the geographic area, but when it’s time for due diligence, we focus specifically on a practice’s patients. Are their patients mostly young professionals, families, or older individuals? This will not only let you know about the kinds of patients you’re inheriting, but it can also inform your marketing efforts if you need to change the make-up of the patient base.
Going over the lease will not only let you know how much it will cost month to month, but it also makes it a factor in the price negotiation, as we can potentially have the seller cover it for a few months while you are getting started.
Clinical Chart Audit
Does the practice have a lot of ongoing orthodontic or full mouth cases? Does most of their production revolve around hygiene or some other suite of services? Our clinical chart audit will give you a solid idea of what types of treatment plans you are taking over as well as indicate the kinds of services the practice is providing on a daily, monthly, and yearly basis.
We can look at a practice’s current equipment and possibly have the purchase price adjusted if it’s obvious that you’re going to have to make upgrades in the near future.
The opportunity assessment essentially answers the question, “Is buying this practice really worth it?” We’ll look at how much money it’s making, how much you’ll need to invest, and how much it could make in six months, a year, and beyond. If you’re hoping to have a million-dollar practice within 3-5 years after purchase that mostly revolves around cosmetic dentistry, but the local population and patient base show that this isn’t feasible, then it’s clear that a particular practice isn’t the right opportunity for you.
How to Get Started with Us
With proper due diligence, there aren’t any surprises when it comes to buying a dental practice, and that’s how we like it! It allows our team to give you as much pertinent information as possible so that you can make a confident decision. Plus, by having our experienced team handle this for you, we can save you from the time commitment for gathering all of this intel yourself.
To learn more about how we do due diligence or the other ways we can help you find, finance, and purchase the right dental practice for you, contact Next Level Consultants today .