By Choice Dental Solutions, Apr 27 2018 01:00PM
Purchasing a dental practice is a serious investment, and you should never make the decision lightly. While you are completing your due diligence, you should keep your eyes peeled for any of these red flags.
The Biggest Red Flags When Purchasing a Dental Practice
1. Pressure to Get the Deal Done Quickly: Obviously, neither party wants the purchasing process to drag on forever. However, too much pressure to skip through the diligence process and sign on the dotted line is a sign that the practice seller might want you to miss something. Always take your time when examining a dental practice, since you could be liable for something that you miss.
2. The Seller Doesn’t Want to Share Much Information with You: You need to understand what you are purchasing, so if the seller does not want to share much information with you it’s a huge red flag. There is a big difference between disclosing too much confidential information and refusing to show you any behind-the-scenes paperwork.
3. High Employee Turnover: In most businesses, a high rate of employee turnover is a red flag that something isn’t right behind the scenes. That being said, it isn’t a guarantee that something is wrong. Do some digging to see why employees are leaving after a short period. Are wages below market rates? What type of management style does the current owner use? Knowing the reason why employees head out the door will help you to decide whether or not you could reverse the trend once you take over.
4. Low Patient Retention: Just like employee turnover, poor patient retention can happen for a wide range of reasons. Why are patients leaving the practice? Are they departing after multiple visits or do they visit for a single procedure and never return? Many times, staff members will be able to offer you a great deal of insight as to why patients are not coming back.
5. A Decline in Production: Sometimes there is a good reason why production has declined, like a dentist preparing for retirement and cutting back on hours. If you are noticing numbers steadily decreasing over the past few years, don’t be shy when asking why numbers are down.
Purchase Your Dental Practice with Choice Dental Solutions
Are you looking to expand your practice? Give Choice Dental Solutions a call at (410)773-4460.