Questions about buying an established dental practice

[Velma Dinkley]

In general, how much does it cost to buy a general dental practice that grosses around $1 million a year?
In general, how much would such a practice net for the dentist? ( Just a general range, nothing specific )
Is it hard to find such a practice for sale? (Assuming you don't mind living just about anywhere?)
Is a fresh graduate with around $250K in student loans able to take out the loan needed to buy such a practice, assuming he has no mortgage to worry about (rents)?

I figured I could take out a bunch of loans, live VERY cheaply for a few years while paying them off quickly, then go from there. I don't want to do specialty training because I want more variety in my work, even though they do make more money.

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[Silent Cool]

In general, how much does it cost to buy a general dental practice that grosses around $1 million a year?
In general, how much would such a practice net for the dentist? ( Just a general range, nothing specific )
Is it hard to find such a practice for sale? (Assuming you don't mind living just about anywhere?)
Is a fresh graduate with around $250K in student loans able to take out the loan needed to buy such a practice, assuming he has no mortgage to worry about (rents)?

I figured I could take out a bunch of loans, live VERY cheaply for a few years while paying them off quickly, then go from there. I don't want to do specialty training because I want more variety in my work, even though they do make more money.

Probably about 650-700K.
Probably about 300-350K.
They are out there on probably every practice transition website, but they are a distinct minority.
Yes, but it depends on the bank. In general, this would be a foolish choice for a new grad because you don't know anything about running a practice. If you transition suddenly, many of the established patients might also leave.
That'll work.

good luck

 

[Velma Dinkley]

Probably about 650-700K.
Probably about 300-350K.
They are out there on probably every practice transition website, but they are a distinct minority.
Yes, but it depends on the bank. In general, this would be a foolish choice for a new grad because you don't know anything about running a practice. If you transition suddenly, many of the established patients might also leave.
That'll work.

good luck

Would initially getting an associateship for 2 or 3 years provide sufficient experience for running a practice? ( I plan on doing this to pay down loans as well ) How do you make a slow, steady transition so you keep current patients? What other advice would you be willing to give to keep the patient attrition rate as low as possible?

Thanks so much for your insight!

 

[Longcatislong]

how often is it that new grads buy into a practice like this? Seems kinda rare, but what do i know? Do dental transition websites offer opportunities to buy into a practice and work alongside the currently practicing owner dentist?

I understand there is no advertising on this website, but could you tell me some names of broker/transition websites for dental practices? I haven't even started dental school yet, but I'm very curious.

 

[Silent Cool]

Would initially getting an associateship for 2 or 3 years provide sufficient experience for running a practice? ( I plan on doing this to pay down loans as well ) How do you make a slow, steady transition so you keep current patients? What other advice would you be willing to give to keep the patient attrition rate as low as possible?

Thanks so much for your insight!

Yes, I would recommend associating so the patients get to know you. You don't want to be in a position where you buy out someone and he/she leaves. I think making sure the owner stays around is the best idea. If you look at some practices sales, the owner announces his/her plans. Sometimes they say they will stick around for a smooth transition; other times their plan is simply to sell and leave. You want the former, not the latter. Make sure that patients trust you. Don't be pushy. Just focus on high quality work and be honest. People will see that I think and appreciate it. Charge lower fees than the competition. Bend over backwards to give them what they want. Encourage satisfied patients to review you on yelp (I think including an announcement on the back of your business card telling patients you are on yelp, angie's list, etc.., is a good thing. You could also offer some incentive to do this, like a Starbucks card or something).

Actually, a better way of doing this is having a link to yelp, etc..., on your website, and also setting up a service to redeem their gift card online.

 

[Velma Dinkley]

Yes, I would recommend associating so the patients get to know you. You don't want to be in a position where you buy out someone and he/she leaves. I think making sure the owner stays around is the best idea. If you look at some practices sales, the owner announces his/her plans. Sometimes they say they will stick around for a smooth transition; other times their plan is simply to sell and leave. You want the former, not the latter. Make sure that patients trust you. Don't be pushy. Just focus on high quality work and be honest. People will see that I think and appreciate it. Charge lower fees than the competition. Bend over backwards to give them what they want. Encourage satisfied patients to review you on yelp (I think including an announcement on the back of your business card telling patients you are on yelp, angie's list, etc.., is a good thing. You could also offer some incentive to do this, like a Starbucks card or something).

Thanks for the advice!

 

[Daurang]

In general, how much does it cost to buy a general dental practice that grosses around $1 million a year?
In general, how much would such a practice net for the dentist? ( Just a general range, nothing specific )
Is it hard to find such a practice for sale? (Assuming you don't mind living just about anywhere?)
Is a fresh graduate with around $250K in student loans able to take out the loan needed to buy such a practice, assuming he has no mortgage to worry about (rents)?
I figured I could take out a bunch of loans, live VERY cheaply for a few years while paying them off quickly, then go from there. I don't want to do specialty training because I want more variety in my work, even though they do make more money.

A practice will typically sell for 2/3 of gross OR 1.5 of net income.
A practice overhead is usually around 60%, with wide variation.
It's easy to find practice for sale. Places hit hard by the last recession (ex. Riverside, CA) even gave away brand new practices; just move in and pay rent.
$250K debt is low, but you still need two years of good income to borrow anything from the banks. It doesn't hurt to ask the seller to finance your purchase.