Buying and selling dental practices have become a lucrative business opportunity today. Buying a dental practice is, however, an expensive thing to do. Most of those who buy dental practices are dentists and they do so with an aim of enhancing financial stability and a successful career. Before you buy a dental practice, you need to make some serious financial decisions. Nonetheless, before you invest your money in any dental surgery sale Brisbane market has today, it is important to get some financial information pieces. Such financial details include:
It is always good to know why a dentist could be selling their practice. Don’t always assume they have gotten greener pastures elsewhere. Of course, every dentist would show how profitable the practice has been. For you to confirm this, you would need to get tax returns of about 3-4 years. This would help you to know the historical financial performance of the dental practice on sale. Financial data helps in analyzing stability and monitoring trends of any dental surgery sale Brisbane has to offer.
Practice valuation is prepared by certified valuation analysts. Hiring competent experts to prepare practice valuation is one indication that the seller is serious about the practice sale. As a buyer, you should keenly examine the preparer’s credentials and how meticulous the reports are. The person preparing practice valuation should check on the methodologies they use to calculate the profitability and revenue of the dental surgery sale in Brisbane.
Model of cash flow
Every buyer wants to be sure the practice they are buying had a good cash flow. There are always reasons behind poor or good cash flow in any business. Cash flow is what most buyers use to determine the viability of the Brisbane dental surgery sale in the market to know whether it’s a worth investment. The cash flow model used should project the financial status of the business at least five years after the acquisition. The model should also consider debt service required, fixed or variable operating expenses, growth rates and the compensation the buyer needs to finance their lifestyle.
The practice seller should provide the buyer with a list of the current employees, their benefits as well as their pay rates. This helps the buyer to know the functions that each employee performs and also decide whether they need to retain them after the sale. Most staff members don’t work under contract, thus, no guarantee from the seller that they would be retained. Most employees don’t know the practice is on sale until a few days just before the transition. Maintaining reasonable overhead in a dental surgery sale Brisbane has to offer is not possible without details on the previous expenses.
Even if the dental practice you are buying was not doing well financially, you could still buy it and change its face. Remember, you are not buying an entity, but an opportunity. If you have the right dental credentials, you could invest in a dental practice with great confidence. When you are passionate about dental practice, it’s possible to increase profits and enhance the reputation of the dental surgery sale listed in the market, as well as make more clients.