What To Consider When Buying A Dental Clinic?
Are you planning on buying a dental clinic? If so, you most likely know that many factors go into buying a practice. Whether you plan to buy an existing dental practice or start one from scratch, purchasing a turn-key operation or starting one is a personal choice. Both these ventures can succeed or fail, depending on how you commit yourself to the project. This short article provides what you need to consider when buying an existing dental clinic.
There are three basic types of dental practices in the market today. They are insurance-driven, fee or service-based, and blended practices. We will look at each one of these models to help you with what to consider when buying an existing dental business.
What Is An Insurance-Driven Practice?
An insurance-based dental practice participates in different insurance plans. In fact, insurance-based practices are more straightforward to expand than fee-based practices. Most young dental professionals prefer this business model to start their dental careers. For one, their business becomes listed within the insurance company's directories for their clients to pick a dentist. Secondly, insuance agencies figure out pricing for them, and the government typically is involved when agencies set pricing. It can differ from state to state in the United States of America. In a nutshell, you don't have much control over pricing or the market. You have to walk in your door, but you don't have to spend resources figuring out pricing or much marketing.
What Is A Fee Or Service-Based Practice?
A fee-based dental practice doesn't participate in any insurance plan. The insurance provider doesn't limit the fee charged for the service. The dentist and their patients usually agree on the costs. The dentist spends resources managing and setting pricing and marketing efforts. However, you have the freedom to do what you will with pricing, and you have more choice with the type of clientele that comes through the doors.
What Is A Blended Dental Practice?
A blended practice is a mix of insurance-based and fee-based dental practices. Insurance patients experience a similar level of care as fee-based patients, even with reduced treatment costs. The office vibe is closer to a fee-based operation.
What Should You Consider When Buying A Dental Clinic?
- Your Desired Practice Area - This is the first step to buying a dental clinic. Figure out the level of market saturation in the area you plan to buy the clinic. The local Chamber of Commerce is a wonderful place to get this information.
- Past Performance - What happened in the past is the best prediction of the future. Even though buying a successful dental practice isn't a guarantee of your instant success, it's a great indication of the practice's potential.
- Take A Look At The Facility - You must appraise the facility besides its financial health. Do a site visit and equipment evaluation before signing the contract. An independent vendor should perform the assessment.
- Spend Time With The Seller - The first few months can be tricky after buying a new practice. Every patient you see is a new patient. Learn what the original practice owner has to teach you. You can negotiate how long the seller will remain with you after the sale in the purchase contract. If the seller is willing to be a mentor, you should take advantage of their knowledge and experience.
- Making A Practice Your Own - Your purchase will blend with your personality over time. It may differ from the past owner, and this difference isn't bad. It would help if you rebranded the office to suit your vision for the future.
In Conclusion
There are other factors to navigate around before making a considerable commitment to purchasing a turn-key business. That is where David Company can help you make the right decision. Contact us with your questions; we would love to hear from you.
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