10 top tips on buying your dental practice
Buying a dental practice is a big decision – probably one of the most important you will make.
As you can imagine, there are a wealth of considerations and we cannot do justice to all of them here. However, here are 10 of the key factors that you must think about:
1. Location, location, location
Where do you want to be? Give this some real thought and make sure that you have access to the best choice of available dental
Decide upon the type of dentistry that you want to do and the type of person likely to be interested in it. For instance, full mouth smile design is unlikely to be of great interest to the under 25s or families. Research the area around your potential practice and make sure you get the right fit.
3. Squat vs existing
An existing practice has a patient base and is the safer option. However, a squat is a chance for you to create your own vision instead of having to work within the constraints of someone else’s. But, if you choose a squat, you have to get it right. Create a business plan and seek professional advice.
4. Leasehold vs freehold
Buying a leasehold property can be more complicated than a freehold, but less of a capital investment. The length of the lease will need to be considered, and whether it can be renewed. It may be that the remaining number of years is unacceptable to your bank and the lease will need to be extended. The landlord’s consent to assign the lease will be required and they may require you to pay a rent deposit or provide a guarantor.
5. NHS/mixed/private practice
You may not be aware that if you buy a practice with a PCT contract, you need to ensure that you retain the existing terms and conditions, and it is important to seek proper advice on how to do this. This should not be a problem but can add time to the process. Do not consult the PCT as you may jeopardise your purchase.
6. Planning permission
It is not uncommon for practices to have grown over the years and not have the correct consent for the entire building. Make sure that you check this.
How are you going to pay for it? In the current economic climate this may not be straightforward. Banks are being much more thorough in their assessment and you will need to make a good impression. Speak to a specialist who has access to the widest possible selection of lenders and don’t pay a fee before they do anything. All fees should be success based.
Make sure that you are paying a fair price. It is well worth getting your own valuation to ensure that you are not paying over the market value.
You are a dentist, not a trained commercial negotiator! To make sure that you get the best possible deal you may want to consider an agent to act upon your behalf and leave you to get on with the dentistry.
10. A trusted partner such as a lawyer, accountant, banker or broker
As the list above confirms, there are a number of pitfalls when buying a practice. Make sure that you seek professional and experienced advice so that you can avoid them.