So you have found a dental practice that meets your criteria and you have decided to purchase it. In this article we’ll discuss the sale process and what is required.
1) You need to have a buying entity setup. Ideally have this setup when you know you’re interested in ownership rather than when you find the practice. The reason for this is that it may take time to setup an entity and accounting structures. This lag may influence a vendor who may be after a quick sale to look at other offers. We recommend obtaining advice on financial structures from an accountant that does have experience with dental clients.
2) Unless you have a large trust fund or have major financial backing you will need to organise finance. Our recommendation is to use one of the industry specific finance companies as this will make the process much smoother. Once you know that you do want to purchase a practice then it is important to reach out to the relationship managers to get an idea of how much you may be able to borrow.
3) Finally, you will need to approach a lawyer to handle the sale contract. They will go through the specifics including aspects such as staff liabilities/contracts, lease negotiations, vendor restraint clauses etc. It is important you chose a lawyer who has experience in dental practice sales.
Please also consider that along with the purchase price of the practice you will have initial costs associated with setting up accounting structures, lawyers’ fees, financing fees and stamp duty depending on the state. Further, please consider that you will need to allocate a certain amount to ordering materials and equipment that you can’t practice without.
Our recommendations for professional help are below. We personally use and trust these professionals ourselves and for the sake of transparency we do not get any benefit from referrals.
Accountant: Bhupesh Kaphle (BDO Partner) Bhupesh.Kaphle@bdo.com.au
Lawyer: Harry Nicolaidis (K&L Gates Partner) firstname.lastname@example.org
Financier: Jason Savage (Medfin) JSavage@medfin.com.au