Buying a Practice Should Be Smooth Sailing

After residency, orthodontists are faced with a major decision: where to practice their trade. When a location is identified, the next big decision is whether to work as an employee, start-up, or buy an orthodontic practice.

Compared to starting a practice from scratch, a pre-existing practice typically offers an established patient and referral base, which increases the chances of success and provides credibility with patients. Pre-existing practices also provide residents with a mentor to work with during their first years as a professional orthodontist.

Bentson Clark & Copple, LLC work to match each orthodontic buyer with the right office for sale through their practice location services. Their valuation and transition work across the U.S. provides the firm a wide range of opportunities to present to the orthodontic community. Bentson Clark & Copple’s orthodontic practice location services are free to doctors seeking a practice opportunity.

Whether choosing to buy a practice or join as a partner, Chris Bentson, president of Bentson Clark & Copple and the Bentson Clark reSource, an orthodontic newsletter, suggests that purchasing equity is often the fastest track to paying off educational debt and building personal wealth.

Transitioning into an orthodontic practice can be summed up in five steps:

1. Once a practice has been identified, review the potential practice’s financial information and their orthodontic practice valuation. The seller of the practice will request you sign a non-disclosure agreement before releasing this information.

2. Review the seller’s practice valuation report with your advisor and discuss the purchase price. If the practice does not have a valuation report, urge them to have one completed, as it will spell out the value of the practice and critical practice operational information.

3. While searching for buying an orthodontic practice, maintain contact with any interested selling doctors and keep your eyes open for other options.

4. Once the buyer, seller and their respective advisers have established a transition plan, projections of future cash flows and financing schedules should be reviewed. A letter of intent will be prepared to outline future definitive legal documents after each party is comfortable with the financial impact the transition will have.

5. An attorney will create binding legal documents for the seller and buyer to review with their advisors. The buy-in/buy-out can begin once both parties have agreed to price, terms and conditions.

Keep in mind finding the right practice, going through paperwork and finalizing a sale takes at least several months, so start the process as early as possible in your residency, says Bentson.

It’s important that you make sure your goals are flexible and negotiable enough to achieve them, and all details are in writing before you enter the practice, if possible, he says.

These preparatory steps will help ensure any major problems are tackled early on so the transition process goes as smoothly as possible for the buyer and seller.

© 2012 Master Google and Bentson Clark & Copple, LLC. Authorization to post is granted, with the stipulation that Bentson Clark & Copple, LLC and Master Google, an Internet business marketing company, are credited as sole source. Linking to other sites from this document is strictly prohibited, with the exception of herein imbedded links.

Bentson Article Featured in Orthodontic Products Magazine

GREENSBORO, NORTH CAROLINA— At least once in their lives orthodontic practice owners will go through a practice transition. Whether they are buying into a practice, adding a partner, or selling their practice for retirement, Chris Bentson of Bentson Clark & Copple advises orthodontists through every step of the process.

In the latest issue of Orthodontic Products Magazine, Bentson explains practice transitions in five main steps.

Begin by Gathering Information
The transition process starts at least two to three years before an orthodontic practice is put up for sale. Begin by learning as much as possible about the transition process. Talk it through with financial advisors, spouses, and other orthodontists who have gone through a transition. Make sure you consult several colleagues and sources of information, as experiences can vary. Word of mouth can also be a valuable asset when choosing a company to conduct an orthodontic practice valuation. Being well informed can minimize any pitfalls or surprises that come with the transition process.

Have A Valuation Performed
Before selling a practice, an orthodontist needs to know exactly what it’s worth. Like selling a car, or a house, appraisals must be done before any transactions can occur. An orthodontic practice valuation is much like having an orthodontic appraisal done before you sell. Valuations allow an orthodontist to know exactly where their practice stands financially before undergoing a transition.

Find the Perfect Partner or Buyer
In the current market there is a ratio of 3:1 seekers to opportunities, which is good news for those looking for another orthodontist for their practice. While residents tend to move to coastal states or high-density areas, it’s important to look for a candidate that can transition into your practice in the time frame you had in mind. Consider listing your opportunity with a transition specialization firm that has resident/doctor matching services. Transition firms often match doctors with buyers or partners free of charge.

Finalize all Transaction Negotiations
This period is where a transition will really kick into gear. During transition negotiations, buyer and seller will agree on a price, a financing plan for the orthodontic practice sale and work out any other details of the sale in writing. Generally, finalizing all the paperwork can take up to 90 days.

Official Ownership Transfer
This final stage of transition is essentially nothing more than finally signing official documents, and changing stationary and nameplates. Done properly, ownership transfer day will seem like just another day in the office.

These steps are an outline of the transition process to prepare orthodontists for the future. Proper research, planning and patience will allow for a smooth and rewarding transition.

© 2011 Master Google and Bentson Clark & Copple, LLC. Authorization to post is granted, with the stipulation that Bentson Clark & Copple, LLC and Master Google, an Internet business marketing company, are credited as sole source. Linking to other sites from this document is strictly prohibited, with the exception of herein imbedded links.