The first phase of purchasing a dental practice is to get prequalified for financing. We make sure our clients get access to the best financing options from multiple lending partners. We assist our clients in negotiating loan terms and walking them through lending conditions to ease the stress and workload.
Step 2: Practice Search
In this stage we want to be proactive in our approach and not reactive to what is listed on a broker’s website. We coach the doctor in how to go out and position themselves for the “pocket listings.” These are the best listings that are purchased without ever going on a website or listing service. This saves the buyer valuable time in finding the right practice to purchase and puts them in the best negotiation position possible to start out.
Step 3: Letter of Intent
The letter of intent is still one of the most important documents because it's the first step in your negotiation with the seller. Without the proper experience, you can lose a lot of power and put yourself in a bad position to discuss the sales price and final terms of the sale even before you have done any due diligence. Mishandling the letter of intent puts the buyer at risk for the entire negotiation of the sale.
Step 4: Due Dilligence
From the buyer's side, this step is critical to understand the real value of the practice. It is here that we go in and pull up to 20 reports out of the seller’s software to determine the best strategies for transitioning the practice and then position it for growth based on the new buyer’s vision for the future of the practice and team.
Step 5: Legal Framework
Having the proper guidance and corporate structure needs to be established well before closing. The legal side of this equation needs to be done by a trusted attorney who has years of transition experience. Our role is to make sure the buyer gets the proper guidance, avoids paying for unnecessary documents, and can meet the deadline necessary to finalize the purchase.
Step 6: Closing Criteria
This step is all about making sure the buyer doesn't lose the negotiation at the end of the close. In this stage it's crucial to make sure that the doctor has met all requirements for both seller and lender to ensure a quick close without any hurdles. It's important that we ensure the buyer has all of this completed so that the seller doesn't change their mind or go with a backup offer should the closing deadline date not be met.
Step 7: Insurance Analysis
Continuing cash flow is vital to any successful practice purchase and transition plan. The only way to guarantee this happens is to have the practice insurances in place as close as possible to the closing deadline. Additionally, we recommend using an expert in insurance negotiations when raising fees to best position the buyer in retaining in network patients.
Step 8: Marketing
Marketing is always delicate when turning over ownership. In order to maintain the existing patient base that the buyer just purchased this needs to be handled by an experienced team so that the goodwill is still intact and the practice can start a new pathway to growth. In most cases it's important to have this plan set up before the loan is finalized so that the investment can be made out of the lending dollars and not out of practice cash flow. Making a mistake at this stage means that the practice will experience stunted growth for several months following the sale.
Step 9: Team Transition
This is the make or break stage of being a practice owner. The buyer has to understand how to influence the team that the direction they want to take the practice, is in the best interest of the team that they just inherited. It is not uncommon for most buyers to experience push back and team members leaving the practice after the sale. Therefore the buyer needs a proven system to maintain the key team members and know what to do to replace those that decide to leave.
Step 10: Patient Retention
This is the area that most buyers lose sleep over and for obvious reasons. This is what you just paid for! It's commonly known as Goodwill of the practice. Essentially patient retention is top of mind and if you don't know how to transition the practice from previous owner to new owner, you risk losing patients with no way of stopping them from leaving. Naturally, this will lead to loss in revenues and therefore a stressed out new practice owner. All the steps leading up to this stage are what need to be done right in order to ensure a smooth patient transition and therefore a happy new practice owner.
Jonathan Miller has dedicated the past 12 years working with dentists exclusively in helping them realize their visions of practice ownership. During that time, he has helped open over 200 new dental offices from scratch working closely with nearly a thousand doctors. Utilizing Fortune Management’s established network of over 90 Executive Coaches across the country, allows access to real-world experience on what makes a successful practice. Jonathan is an experienced public speaker and has been invited to speak year after year to some of the top dental schools in the country like USC, UCLA, University of Pennsylvania and Temple.