Hire a Dental Transition Lawyer Before Buying a Dental Practice
When considering the purchase of an existing dental practice or location, the best step you can take is to consult with a team of legal professionals. Working with a dental transition lawyer, accountant, and banker with experience with dental transitions ensures you make the best choices for you and your future.
You can count on your team to do the due diligence, evaluate the financial decisions, value the practice, and identify any issues you might have with the acquisition. Do not buy a dental practice without a strong team to back you throughout this process, including a knowledgeable lawyer.
Why You Will Want a Team of Experienced Professionals Handling Your Purchase and Transition
When you work with a lawyer and accountant who regularly represent dentists, they will already understand the acquisition and transition process, making it easier to spot concerns as they arise. Your team will help you navigate complex legal requirements, contracts, and agreements. They will also take the necessary steps to safeguard your financial interests today and in the future.
Some of the steps they will take on your behalf include:
Due Diligence
Do due diligence when making a decision as large as purchasing a dental practice or location. This includes reviewing financial records, contracts with suppliers, leases, employment agreements, and other key documents. This helps to identify any ongoing issues with the practice, ensure it can make a profit, and determine any hidden liabilities or liens.
Managing Compliance and Regulatory Concerns
Like other types of medical practices, dentistry is highly regulated. When you purchase a dental practice, you must understand the numerous laws and regulations related to owning and managing it.
Your lawyer will ensure the transaction complies with all legal requirements, help you obtain any necessary permits, and ensure your employees obtain the necessary licenses.
Risk Management
Having a lawyer and accountant on your side will minimize the legal risks of buying a dental practice. They will identify potential issues and provide strategies to mitigate risks. When necessary, they may also help de-escalate disputes before they become lawsuits.
Contract Negotiation
Your lawyer, accountant, and banker will oversee your purchase. They can negotiate terms and conditions on your behalf, protecting your interests. They will also answer your questions and help you understand confusing clauses and their implications.
Having a strong team of professionals to support you when buying a dental practice is the best thing you can do to ensure a smooth and legally sound transition. This should give you peace of mind about this challenging but exciting step in your career.
What Steps Will a Dental Practice Lawyer Take for Me?
The process of buying a dental practice or location is more complex than many realize, and you may need to continue working your current job or finish your education while you navigate it.
When you have a knowledgeable and experienced lawyer on your side, you can count on them to help you take the right steps. Often, they will handle this for you, ensuring you can focus on your work throughout the process.
When you have a lawyer who represents dentists through these transitions regularly, you can count on them to:
- Research the practice, from patient charts to growth to the age of equipment
- Financial due diligence, including verifying tax returns, analyzing new patient reports, and looking at fee schedules
- Requesting a lien search from the broker
- Taking other steps to ensure this is a sound purchase for you
When you purchase a dental practice, some issue will arise. Sometimes, it’s as simple as a lien the current owner needs to pay. Occasionally, it’s a staffing or equipment issue. Often, it’s a bad location or stiff competition in the area.
After all, there is a reason the current owner wants to sell. This is especially true when they continue to practice and only sell one of their locations.
What Must I Consider Before Buying a Dental Practice?
Many people decide they are ready to purchase a dental practice when the opportunity arises. They may have considered their preferences for location, practice size, and patient demographics, but what other factors play a role?
Our dental transition lawyers urge you to consider:
- Financial Preparation: Assess your financial situation and determine how much you can invest. Consider obtaining pre-approval if financing may be necessary.
- Research: Do not overlook the importance of researching any dental practice before making an offer. Consider financial records, patient demographics, staff contracts, lease agreements, equipment inventory, and any recent legal or regulatory issues.
- Valuation: Evaluate the dental practice’s fair market value, including factors such as financial performance, assets, liabilities, and future earning potential.
- Legal and Regulatory Compliance: Before purchase, you may need to obtain necessary licenses and permits, transfer ownership of assets, and draft or review legal documents. Expect to need to update purchase agreements, lease agreements, and employment contracts following your purchase.
- Negotiation: You must agree with the seller on several key parts of the purchase agreement. This could require negotiation. Negotiations could set the purchase price, payment terms, transition period, non-compete clauses, and contingencies.
Once you purchase the dental practice, you will need to manage the transition properly to retain patients and sustain (or boost) staff morale. You will want a strong transition plan in place for handling this process.
You will also need to create processes to:
- Monitor financial performance
- Implement strategic initiatives to attract new patients
- Take steps to improve patient care
- Continue to invest in the growth and success of the practice
Buying a Dental Practice Is Difficult on Your Own
Deciding if you are making a sound investment when buying a dental practice takes work, and it’s not always easy to manage on your own. Even if you are familiar and experienced with this process—and have plenty of time—you will not want to manage this without help.
Having a lawyer, accountant, banker, and other professionals on your side when buying a dental practice will ensure you have the knowledge, support, and guidance you need. An experienced team can help you make more informed decisions, mitigate risks, and identify any issues before they become major legal disputes.
In addition to helping you navigate the buying process, your team can increase the likelihood of a successful transition and continued growth.
Contact Our Dental Transition Lawyers for a Consultation
Wood & Morgan provides confidential consultations for those considering purchasing a dental practice or office anywhere in the United States. For 40 years, we have provided comprehensive legal and business support and guidance to dentists nationwide.
Call (800) 499-1474 to speak to a Wood & Morgan team member now.