Seeing a practice in person is a must before buying it. When you’re looking for a practice to buy, the top-level numbers and location may catch your eye—but before you put in an offer, and certainly before you sign on the line, make sure you’ve looked over the practice thoroughly yourself.
After you’ve talked to the selling dentist and their broker about your interest, you’ll schedule a visit to the premises. Here’s what you can expect as a buyer when it comes to in-person visits of a dental practice.
The First Date: Before the Offer
It’s very common to get to walk through the office before you sign a Letter of Intent, or offer to buy. But this won’t be the last time you see it before you actually buy it. So don’t use this first visit to ask deep-dive questions about tax returns, patient charts, employee records, etc. This first visit is about creating a relationship and presenting yourself as the perfect buyer. It’s a first date.
Some brokers don’t like you to spend lots of time in the practice before a purchase, but you should push hard on that. (We do for our clients.) You shouldn’t be expected to spend hundreds of thousands, maybe millions, on a practice after spending an hour on a single Saturday getting a surface-level tour of the facility.
Most visits won’t happen during regular business hours, which is fine for this first visit. Your job here is to establish a relationship with the seller and make sure the office is in good shape. If you’re comfortable with both, and the numbers look good, you’ll submit a Letter of Intent with the help of your attorney.
The Deep Dive: After the Offer
Once an offer has been submitted and accepted, it’s time to really dig into the state of the practice. Your accountant and banker will worry about the numbers, and your attorney will take care of the legal aspects of the agreement. But as the doctor, you’re the best person to do a deep dive on the practice itself.
Schedule multiple times to see the office. If you’re flying in, it requires more work to schedule, but try hard to do it. And when possible, try to schedule time during operational hours. Unfortunately, this is uncommon. If you can do it, though, this is your time to simply sit in the corner and observe. Watch the front desk employees, the number of cars in the parking lot, the interactions between patients and hygienists, etc.
More likely, you’ll have to check out the practice outside of working hours. No problem, there’s still plenty to do.
- DO: Pay special attention to patient charts. There’s a lot of info here. Their ages; conversations they’ve had with the seller; the work they’ve had done; whether there’s any work left to be done; how the seller treats common cases; when and to whom patients get referred out; how many patients follow through on presented treatment plans; who does the treatment planning; how often hygiene visits are done; and so on.
If you can’t tell answers to these questions from the charts, that’s a good indication that other vital information may be missing in this office. You’ll need to dig even deeper on other documentation and the staff’s habits around it. - DO: Try to understand staff culture. Many sellers are (understandably) nervous about letting you meet the staff before the purchase. If you can do so you absolutely should, and it’s a great time to ask them questions about what they think of the office, how they work with both patients and the doctor, and so on.
If you can’t meet the staff, you can still look into staff issues like the employee handbook, pay levels, turnover and longevity, and more. Knowing these things can give you at least a sense of staff culture.
- DO NOT: Get hung up on the equipment. This is the biggest mistake I see from in-person visits. Look, I get it! You should care! But with some exceptions, the patients don’t care. The question is whether you can live with it, and how soon you’ll need to make an investment to bring it up to your standard. If the answer is that it will cost you $100K or more in the first three months to be comfortable, then okay, it’s worth a pause. Outside of that, don’t make equipment the make-or-break issue. You’ll end up updating equipment throughout your career anyway.
Remember that you can always re-paint. You can always knock down a wall or two and update the equipment. Pay more attention to the numbers of the practice and what they tell you about how this practice operates, to know whether it’s one you’ll feel comfortable stepping into.
If you think you’ve found a practice worth visiting, let me know! As our client, we’ll make sure you’re well prepared for all of your visits, so they’re as smooth and productive as possible.
