Top 10 Concerns of Practice Buyers & How You Can Address Them

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LOCATION

Location is the number one priority for most young dentists in the dental career decision making process.  Most buyers want to work within 1-hour drive time of metropolitan communities. If your practice is located in or near a good metropolitan area, you will likely end up with a higher sale price than those of comparable practices in rural areas.

ANTICIPATED CASH FLOW

Anticipated future cash flow / Seller pre-transition planning action

  • Practice profitability / Check Key Performance Indicators and then act

  • Collections $600K+, Buyers want fulltime work/ <$600K consider chart sale

  • Staff Retention / Manage your staff so the office can run without you

  • Patient Retention / Have a good recall system, offer to work post sale

  • Procedure Mix / Provide buyer with list of procedures by code

  • In-network Insurances / Allow time for buyer credentialing

PATIENT DEMOGRAPHICS

With patient mapping, both buyers and sellers can see the proximity of patients to a practice address, age demographics of patients and target areas for future marketing to new patients. Patient mapping benefits both buyers and sellers. 

OFFICE CHARACTERISTICS

  • City/Location or Community Appeal

  • Office Appearance

  • Market Saturation

  • Parking Adequacy

  • Accessibility from nearby highways and streets

  • Visibility and Signage

EQUIPMENT

Is the practice up-to-date on technology including digital radiography? Many sellers don’t stay up-to-date and plan on a buyer purchasing additional equipment at the time of practice purchase.  This is a logical argument but practically speaking, practices that are up to date on technology are more marketable and sell for more. Out-of-date practices attract less interest.

 
 
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OFFICE

Does it have four or more operatories?  Are the tenant improvements up-to-date?  Buyers are likely to reduce their offers to purchase your practice by the cost of new equipment and office improvements.

PATIENT BASE

What is the ratio of active patients to revenues? A high ratio may mean that there is not much meat on the bone for a new doctor and a low ratio indicates the selling dentist is conservative with treatment planning. 

NEW PATIENT FLOW

An average new patient count of less than 12 per month indicates a practice is shrinking and an average new patient count of 20 or more per month is more indicative of growth.

SCHEDULING

A strong healthy practice with good potential to grow will be booked 3- 6 months in advance for hygiene and 3+ weeks for operative appointments.

PEOPLE SKILLS

Are your people skills good? Or do you have high staff turnover or high patient attrition? The more loyal staff and patients are to a doctor, the greater the staff/patient retention post sale and perceived value of a practice. 

 
 
 
 

Knowing what practice buyers want allows you to make changes and/or set reasonable goals and expectations for the future.  If you are within five years of transitioning your practice to new ownership, please contact our office to learn more about practice transition planning.

 
Kaylan Thompson