You have worked very hard to finish dental school. Now, you might be wondering what to do after dental school. What happens after dental school? You can go to work for another practice, you can start your own practice, or you can go through the process of purchasing a dental practice.
If you are interested in owning a dental practice, you might be wondering how to purchase one. If you want to learn how to buy a dental practice, you will eventually enter a negotiation process with someone selling a dental practice. Buying a dental practice is not an easy process, and you could get a bit nervous during the negotiation process.
What are a few important topics you need to avoid discussing if you are interested in buying a dental practice? There are a few important points to keep in mind.
Coming straight out of dental school, you will probably not have enough cash to purchase the practice on your own. Therefore, you will have to get financing from the local bank. The lender will want to make sure that you are put in the best position possible to repay the loan they give you. That means that they could mandate that the person selling the practice sign a non-compete agreement.
This is likely something that the seller will ask you about during the negotiation process. Some people might not care because they are retiring; however, if the seller wants to continue practicing dentistry somewhere else, they will want to know if they have to sign a non-compete agreement. The bank will probably give you a minimum non-compete distance that the seller has to agree to before they will finance your loan. This is not a number that you should share with the seller.
If you give the seller and minimum non-compete distance, you will immediately give them leverage. Instead, you may want to be vague with your response. You should not even address this topic unless they ask you about it directly. If the seller agree to a larger non-compete distance, you may be able to secure a better deal from the bank. Therefore, do not show your cards to the seller. Do not share the minimum non-compete distance the bank has given you.
If you have gone through the process of buying a house, you understand how important it is to get financing before you start the negotiation process. Getting approved for financing can give you leverage because your offer will be seen as more competitive. At the same time, buying a dental practice does have a few differences when compared to buying a house. You do not want to let the seller know how much financing you have been approved for.
Of course, you will want the seller to know that you have been approved for financing; however, you do not want to tell the seller how much financing you have been approved for. If the seller knows that you have been approved for a certain amount of money, they will want to get every dollar out of you. Just because you have been approved for a certain amount doesn't mean you necessarily have to pay that amount for the practice. Instead, you want to get the best deal possible for yourself, so you want to keep your financing limit close to your chest.
Furthermore, if you let the seller know that you have been approved for a certain amount of financing, the seller may decide that the limit is not enough. They may believe that you could not get approved for enough financing for what they believe the practice is worth. Then, they might decide not to sell the practice to you at all. Instead, you should go through the negotiation process without revealing the limits of your financing. If you agree to a price that is above your financing limit, you can always go back to the bank later to ask for more financing.
Finally, during your negotiation process, you should avoid discussing your current job status. Of course, if the seller knows that you have just graduated from dental school, then they may already know that you don't have a job; however, if you have been out of dental school for a few years, the seller may not necessarily know if you have a job or not. You should avoid discussing your current job status with the seller. If you have a LinkedIn profile, you may want to change it temporarily to avoid the seller stalking you on social media.
You do not want to reveal your current job status to the seller because it could give him or her more leverage. If the seller knows that you do not have a job, they may assume that you are under a significant amount of financial stress. They may believe that you need to start working as soon as possible to cover your bills. As a result, they may take advantage of your situation, using it to extract more money from you. You do not want this to happen to you, so you should not discuss your current job status.
There are a lot of details that the seller might ask. They might ask about your employment history, your current salary, how long you have been employed, where your current job is, and how quickly you can relocate. These are ways of digging up more information about your current job, and you need to avoid asking them. You never know what detail the seller might use as leverage during the negotiation process, so it is better to stay away from it entirely. All the seller needs to know is that you are qualified to practice dentistry. That makes you qualified to purchase the practice.
Dental practice management is complicated, and the first step is to find the right practice. When you are buying a dental practice, particularly if you are going through the process for the first time, you need to think carefully about how you negotiate. You want to get the best deal possible, but you need to avoid sharing information that the seller could use as leverage. We are Dental & Medical Counsel, and it would be our pleasure to help you navigate the process of buying a practice. We have worked with countless dentists, helping them find the right practice for their needs. Now, it would be our pleasure to help you as well.
Some of the reasons why you should partner with us include:
It would be our pleasure to help you as well. Contact us today to speak to a member of our team.