CATEGORY 108 AUSTRALASIAN DENTIST AQUISITIONS Unlock the path to success in dental practice acquisition or sale When it comes to buying or selling a dental practice, it’s a monumental decision that should not be taken lightly. Your dental practice, much like your home, holds a place of tremendous value. Unlike the conventional real estate market, the dental practice arena possesses unique characteristics, and most individuals engage in such transactions only once in their lifetime. erefore, it’s crucial to ensure that you start this journey on the right path. At Dental Acquisitions, we stress the signi cance of thorough preparation and organisation for both buyers and sellers. While purchasing a house might seem straightforward, the value of a dental practice extends well beyond equipment and aesthetics; a substantial portion of it resides in the goodwill it has cultivated. Getting it right from the outset is our utmost priority. Here are some key considerations to keep in mind before embarking on your dental practice acquisition: Location: Your ideal setting Where you choose to establish your dental practice is a pivotal decision. Regional practices o er a stable patient base and lower xed costs compared to major cities, ensuring consistent income and strong pro t margins. It’s worth noting that Sydney traditionally has the lowest pro t margins due to the highest rent and wages in the country. Capital cities also present more competition. Proximity to your business is crucial, particularly as an owner, where you’ll spend an extra 5-10 hours per week outside of trading hours. Preferred provider or private practice Another vital consideration is whether you prefer a preferred provider practice or a private practice. Practices with Bupa or Medibank preferred provider status tend to have higher active and new patient numbers. ese patients are often pricesensitive, and complex treatments are less common. If your focus lies in veneers, implants, or orthodontics, a private practice may better align with your goals. e pro le of a practice heavily reliant on insurance companies di ers signi cantly from a private practice. Growth potential Assess the practice’s growth potential by examining the number of chairs and its current capacity. Review the item code report to understand the types of treatments the practice performs. Consider whether you can introduce treatments that are currently referred out or not o ered. Evaluate the e ectiveness of the practice’s advertising e orts and whether it operates during nights or weekends. Profitability A strong dental practice generating over $1 million in revenue should aim for a pro t margin of 20%. If the business falls short of this target you must identify necessary changes and assess their feasibility. Acquiring a practice with high revenue but weak pro tability will lead to challenges post sale. For all the additional work involved in business ownership, it’s vital you’re reaping the rewards nancially. Equipment quality e quality of equipment is no longer limited to chairs. Buyers often inquire about the presence of OPG, CBCT, or Cerec machines, which can represent signi cant savings if already in place. Investing in practices with high-quality equipment is a wise long-term choice. Post-sale principal commitment e continuity of the principal dentist’s involvement post-sale is essential, as it directly impacts the practice’s goodwill. In many cases, the principal generates the majority of revenue. Ensuring the principal’s continuity aids in a smooth transition and debt repayment for the buyer. O ering a 12-month commitment post-sale can attract more buyers and boost their con dence, leading to better o ers. Finance and legal Prior to embarking on your practice search, consult with banks specializing in the dental industry. ese banks possess in-depth knowledge of the dental market and can provide tailored nancial guidance. Furthermore, selecting a lawyer experienced in dental practices and practice sales is crucial. eir expertise can make the di erence between a successful deal and a deal falling over at the nal stages of negotiation. In the world of dental practice acquisition, the journey is as intricate as the destination. At Dental Acquisitions, we specialize in guiding both buyers and sellers through this intricate process. Your success is our priority. Reach out to us today, and let’s embark on this transformative journey together. We look forward to assisting you. You can find Ian Donnelley and Dental Acquisitions at www.dentalacquisitions.com.au or call 1300 232 217. By Ian Donnelley, Dental Acquisitions Ian Donnelley
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