How to Distinguish Yourself as a Ready and Able Dental Practice Buyer

By Mark Soelberg, CVA, Vice President of Arizona Sales, and Karli Pierson, MBA, Director of Operations

So, you want to buy a dental practice. You may have dreamed about and prepared for practice ownership for years, or perhaps you are entertaining the idea for the first time. As a potential dental practice buyer, you may be feeling a variety of emotions: excitement, anticipation, stress, or uncertainty. You may not know where to start, who to reach out to, or what questions to ask.

In the current seller’s market, it is imperative that you distinguish yourself from the large pool of buyers. This article aims to help you (1) determine whether or not you are ready to take the leap into practice ownership and (2) ensure you are setting yourself apart in your conversations with sellers and their brokers.

A ready and able buyer

Practice sellers and their brokers speak with hundreds of potential practice buyers every year, and only a small percentage of those buyers are ready and able. A ready and able buyer is defined as someone who is both financially and emotionally prepared to purchase a practice.

You will want to conduct an honest self-evaluation to ensure that you are a ready and able buyer. Here are some questions to ask yourself to determine if you are truly prepared for dental practice ownership:

1. Have I considered the responsibilities of owning a business?
2. Will I enjoy wearing more “hats” than just being a practitioner?
3. How well do I assume risk?
4. Am I ready to settle down in one location for the next 15 to 20 years?

As you demonstrate your aptitude for business ownership, you will stand out from the other less prepared buyers.

A financially ready and able buyer

Your financial preparedness can also indicate if you are a ready and able buyer. The following questions can help you evaluate your financial readiness:

1. Do I have at least a year’s worth of solid production history to show a lender?
2. Have I saved up a significant amount of cash?
3. Do I have a good credit history with no major marks?
4. Have I spoken with a lender who has confirmed that I would qualify for financing if I found a practice that meets their requirements?

Practice sellers will consider your offer much more seriously if you have the financials to back it up.

An emotionally ready and able buyer

You demonstrate the attributes of a ready and able buyer if you are patient, realistic, and reasonable in your interactions with practice sellers. As a buyer, you can’t anticipate every scenario that may occur, but you can go into the purchasing process with an open mindset. As you embark on your purchasing journey, you may find that the perfect practice does not exist until you create it.

Here are a few questions to gauge your emotional readiness to enter into the practice purchase process:

1. What are the characteristics of my ideal practice, and which are most important to me?
2. Do I understand that my ideal dental practice may not be on the market, and am I willing to be flexible on terms?
3. Am I emotionally prepared for my offer to not be selected?

If you exhibit these characteristics, you have a much higher likelihood of forming a positive working relationship with the seller throughout the transition process.

In practice sales, there is no such thing as a perfect buyer, seller or transition. However, possessing the qualities and financial power of a ready and able buyer will ensure you distinguish yourself from other buyers and help you reach your desired outcomes.

As seen in the October 2021 edition of Inscriptions published by the Arizona Dental Association.