CATEGORY 112 AUSTRALASIAN DENTIST Buying an established dental practice represents one of the most signi cant professional and nancial decisions you’ll make as a dentist. While the prospect of practice ownership o ers exceptional opportunities for career growth and nancial success, the complexity of the acquisition process can feel overwhelming. e good news? With proper planning and the right support team, you can navigate this journey con dently. Let’s explore the essential considerations that will help you make an informed decision and set your practice up for long-term success. 1. Know exactly what you’re buying Due diligence is your best friend When investing hundreds of thousands of dollars in a dental practice, thorough research isn’t optional – it’s essential. is investigation extends far beyond the practice’s marketing materials or initial walk-through. Legal and compliance foundation Your due diligence should include comprehensive legal and compliance checks, reviewing all existing contracts and agreements within the practice. is covers the lease or other occupancy agreement, equipment leases, sta contracts, and supplier agreements. ese documents can reveal hidden costs and obligations that could signi cantly impact your future pro tability. Professional support advantage Given the stakes involved, attempting due diligence without expert help is risky and ine cient. e Avant Law team provides specialist guidance to assist clients identify if the relevant commercial and legal risks have been appropriately considered. Operational performance assessment Review the operations of the practice – in particular, ask to review documents that set out formal procedures and work ows. Consider the risk of one or more key sta members leaving, who could take much of the practice’s intellectual property with them. Beyond the numbers and legal documents, you need to evaluate whether the practice culture aligns with your vision and values. Schedule visits during peak hours to observe patient ow and sta interactions. Speak with team members about their experience – high sta turnover often signals underlying management issues that could a ect your transition. Growth potential analysis Use this research phase to identify improvement opportunities. Are there underutilised treatment rooms? Could extended hours capture more patients? Are the practice missing revenue streams like cosmetic dentistry or orthodontics? ese insights will inform your business plan and nancing needs. 2. Evaluate the practice’s financial health thoroughly Look beyond surface-level success A practice might appear modern and busy, but nancial statements tell the real story. Request at least three years of nancial accounts to identify trends and potential red ags. Revenue trend analysis You’re looking for consistent upward revenue growth over multiple years. Declining or volatile revenue patterns warrant deeper investigation. Seasonal uctuations are normal, but signi cant year-over-year drops could indicate patient attrition, increased competition, or operational issues. Expense scrutiny Does the practice work towards a budget – and what sort of variation from budget is observed across major expense categories (and what are the reasons for this?). Examine all leading expense categories carefully. Unusually high costs in areas like marketing, repairs, or professional services might indicate underlying problems. Equipment lease payments, insurance premiums, and sta costs should align with industry benchmarks for similar-sized practices. is can also be a cue to review contracts for key services such as IT and/or vehicle leases. Profitability assessment Revenue alone doesn’t determine success – focus on pro t margins and cash ow patterns. A practice generating high revenue, but low pro ts might have operational ine ciencies you’ll need to address immediately. Working with experienced accountants and the Avant Finance team during this analysis can help you understand exactly what the numbers mean for your investment. 3. Assess dental equipment value and condition Balance current worth with future investment needs Equipment often represents a substantial portion of the purchase price, making accurate valuation crucial for your investment decision. Current condition evaluation Conduct a thorough equipment inspection with a quali ed technician. Check service records, warranty status, and remaining useful life for major items like dental chairs, X-ray machines, and sterilisation equipment. Equipment that appears functional might need expensive repairs or replacement soon after purchase. Technology gap analysis Identify where equipment upgrades could enhance patient care and practice e ciency. Modern patients expect up-todate technology, and newer equipment often provides better treatment outcomes while reducing chair time. It’s important to factor the cost of any potential equipment upgrades into your buying budget. Strategic upgrade planning If signi cant equipment replacement is needed, factor these costs into your acquisition planning. Avant Finance o ers specialised equipment nancing options that can help you modernise your practice without straining your initial cash ow. A guide to buying a dental practice Ready to take the leap into practice ownership? Here’s your roadmap to making the right investment decision FINANCE
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