Purchasing a dental practice is likely one of the biggest purchases in your life, you want to find the perfect practice, so you can slide right in and keep it going as is. This is a great plan, yet the perfect practice rarely exists, or it is over-priced. By determining the opportunities and challenges of a practice prior to making your purchase you will want to be making a well – informed decision when you sign your offer.
Here are some areas to consider when purchasing a practice:
- The active patient count will vary by software and parameters that are placed on that metric. If you can calculate how many patients had a recall exam in the last 12 months, then you will know the number of patients that are participating in the hygiene program which is your base for diagnosing future treatment. This is a more accurate count of patients who you can expect to see in the future.
- When you see how many patients are being referred out of the practice for various treatments, if you can offer those treatments yourself then you will have an opportunity to increase production.
- You will want to ask about the systems for hygiene coordination and treatment coordination, as well as check for outstanding treatment and hygiene patients that are due and not yet scheduled. If these numbers are high, then if you improve the systems, you will have more patients in the office.
- When reviewing the lab percentages, if the number is below 6% then you will likely have an opportunity to complete more major restorative as industry norm is currently 8%. You will want to see which types of major restorative were completed in the previous 12 months to see where there may be a gap in patient acceptance or treatment diagnosis.
- You will want to determine how the new patient calculation has occurred. If the office does recurring COE’s then the numbers may be skewed if you use procedure codes. You will want to see how many new patients are “added and seen” in the calculations.
- If there isn’t an active marketing plan in place, the opportunity will exist to increase your patient base with a digital marketing campaign targeted to your area.
- You will want to calculate the open time in current schedules, your production will increase if open time is filled.
- If the hygiene percentages are above 40% of overall production, then you will know that likely you are purchasing a practice that is delivering very conservative dentistry and there would be room to improve the Dentist production.
- For scaling, polish and fluoride codes you will want to see values of $200 to $220 per hour. If values are less then this, you will have an opportunity to increase hygiene fees by bringing the department to industry norm.
- If the salaries are above 28% it doesn’t mean that you need to cut staff, it means that increased production will balance out this metric.
- Always remember that the salesperson is working for the vendor, do your own research and hire a professional to help you with Due Diligence, it will be well worth the investment.
- One consideration that many purchasers miss, is putting a transition plan into place. You can purchase the BEST practice and if you don’t plan for a successful transition, your investment can become a nightmare. Just sliding in as a new provider isn’t always the best decision and neither is changing everything the day of purchase. A well-executed transition plan will relieve stress and chaos for both you and your new team.
When deciding to purchase your practice, there are many factors to consider, ensure that your decisions are fact based and not based on a feeling. Be very clear in advance where your opportunities are and where your challenges lie. Ensure that your plan to grow the practice is well thought out, measurable and attainable. Rely on your trusted professional advisors, they are on your side and have the vast knowledge of many practice purchases and transitions.
