Buying a dental practice is NOT like buying a home. In a home sale, realtors and agents often love to keep the buyer and seller apart. But if you’re buying a dental practice, you need to get to know the seller, and you need to do it right.

You and the seller should be a reasonably good fit for each other, both in clinical and business terms. We’re not talking about an exact carbon copy here, but the Venn diagram should have some significant overlap.

So how do you figure that out? In this post I’ll tell you not only what you’re looking for, but also when you should look for it.

At Dental Buyer Advocates, we’ll not only help you through the purchase process, we’ll also train you on the best ways to understand just what you’re getting into with the seller. Luckily, most buyers can do this pretty intuitively. But there are some specific subjects to ask about and get concrete answers on.

Two major areas to evaluate

1. Focus on and ask questions about the clinical philosophy of the seller.

What kind of treatment planning do they do? What procedures do they do? What do they refer out? You want to know two things here: 1) can you do the dentistry this practice does? and 2) do you and the seller have similar philosophies on when and what to recommend to patients?

Ask to see some patient charts. There are HIPAA regulations to consider here, so be careful. And because of that, there’s a chance you won’t get to see the charts. But push a little on this one, because it’s extremely valuable as a means of confirmation.

We have a process where we train you to look at a statistically significant sample of patient charts, be able to ask good questions about each one, and confirm that what the seller told you about their philosophy is true.

Understand the operations of the business.

Along with the dentistry itself, you need to know how well the business is run. There are lots of areas to consider here:

• Check google reviews. What do patients seem to think? And is the staff effective at getting patients to make those good testimonials?
• Call the office. See how often and how quickly they pick up, and how friendly they are.
• Evaluate turnover. How long have employees been there? What do current staff say about the office?
• Check new patient numbers. How many new patients show up every month? How many active patients do they have on a regular basis?
• Evaluate other miscellaneous issues. What do they do when a patient is late? How do they handle hiring and firing? Have they ever had to fire someone? Which tasks do they delegate? What do they outsource, what do they keep in house, like payroll, accounting, and so on?

All of this feeds into your understanding of how they’ve run their business, and what you’re stepping into.

When to ask all this

It’s important to do all of this due diligence on the seller at the right time. Ask for certain things too early or too late in the process and you run the risk of offending the seller or missing out on crucial information.

To keep it simple here, I’ll divide this into two camps: before and after the Letter of Intent. The LOI is a nonbinding document that lays out the roadmap for the transition, and your attorney will help you draft it.

Before you submit an LOI, you should have asked for production reports and tax returns, as well as some basic, surface questions about the seller’s clinical philosophy.

After the LOI is accepted is when you get into the details above about staff, patients, patient charts, equipment reports, and so on.

Armed with this information, I have every confidence that you’ll understand how well you and the seller will work together on the transition. And a smooth transition is in the best interests of both of you.