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.
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