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09.23.05 Issue #185  
Buyer Be Aware

Tom Snyder, DMD, MBA

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The prospect of establishing your own dental practice is about as big a decision - in terms of its long term impact - as your decision to go to dental school was. If you’ve decided to purchase a dental practice as opposed to starting a practice, there are several key factors to consider to ensure you make the very best investment for both your current needs as well as your future opportunities. 

Location, Location, Location. From the community as a whole, to the actual site of the office, to the type of dentistry you wish to provide, location is key. Take a look at the demographics.  Is it a diversified economy? Is it a growing community in terms of new housing starts, condo and apartment complex construction? Does it offer a quality school system?  Take time to tour the area you are considering. Look at the shopping malls and the types of stores in the area. The retail establishments give you an indication of the population that surrounds the area you are considering. 

Is the office under consideration conveniently located?  Is it on a busy thoroughfare?  Is there adequate parking that is free and convenient?  Is the facility handicapped accessible? If not, OSHA laws will likely require you to make it accessible.  If the practice is located on a second or third floor, is there an elevator?  Is there prominent signage? 

Consider the type of the location. If the practice is in a mixed professional office, for example, it may include a dental practice and other primary care providers such as internists, cardiologists, dermatologists, etc. Downtown high-rise practices often are in commercial properties with many dentists in the building, and parking can become an issue, while a converted residence typically will house an older practice that requires updating.

Consider the type of practice and the clinical services you want to provide. Purchasing an insurance-based practice requires that you study the plans and contracts carefully to clearly understand the economics of the arrangements you’ll be taking on.  If you seek a fee for service practice, a suburban area may offer greater opportunity to develop this model, particularly if the residents in the area are white collar professionals. In addition, consider if you want to establish a family practice that serves a broad age range or if you want to focus on restorative dentistry and aesthetics, which tends to attract more mature patients.

Examine the fees. Fee structure is important to determine where fees may be relative to other dentists in the area.  Purchasing a practice with a lower fee structure allows you to gradually increase fees.  Conversely, if you purchase a fee for service practice and fees are considered highest in the area, you may have difficulty charging the same fees as your predecessor who could command that level based on his/her skills and experience.

Evaluate the infrastructure. Many practices need substantial financial investments in new equipment, leasehold improvements, and technology.  While the market price may be lower, consider the additional investment required. Be careful not to restrict your ability to grow the practice. If there are only three operatories and no room for expansion you may force yourself into a costly move down the road. Practices with unused space, plumbed operatories, as well as plenty of workspace in the business area may make better long-term financial investments.

Conduct a chart audit to determine the number of active patients – those individuals that have visited the practice for at least one recare appointment in the last 12 months. The number of new patients per month is also a key indicator of patient activity, and looking at age distribution of the patients will give you a snapshot of the type of dentistry you will be providing.  In addition, the zip code analysis can reveal how many patients are driving long distances to see the selling dentist. Once he/ she is gone, those patients may switch to a more conveniently located practice. 

Consider the staff. Although, you may not want to keep the employees long-term, if the seller departs shortly after the sale, it can be beneficial for the hygienist, in particular, to remain, since she/he has a relationship with the patients. If the staff members are well trained and likeable, they will be an asset even though the market value may be higher in terms of their salary rates. 

Purchasing a dental practice is the foundation for your professional future doing so effectively will ensure your long-term financial freedom.

Dr. Tom Snyder and Sally McKenzie are co-founder’s of The Dentist’s Transition and Financial Network. Dr. Snyder is Managing Partner of The Snyder Group of Marlton, New Jersey, and a popular author, lecturer and consultant in dental practice management and transitions. He can be reached at 800-988-5674 or

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