There is a season for everything — even when it comes to purchasing a dental practice. Like any small business owner, your typical dentist has busy months and ones that are not-so-high traffic. Because purchasing a dental business is very much entering a seller’s market, it is important to understand the seasons a dentist’s office goes through to determine the best time to make the move and buy a practice.
Look for the slower times of year
Think back to when you went to the dentist as a kid: You probably had a check-up or cleaning right before heading back to school in the fall, and maybe in the spring as the weather started to get warmer. You weren’t alone in getting your appointments in at those times: Dentists across the country have reported that the busiest times of their year have occurred in August (as families get into back-to-school mode) and as the new year gets into full swing in February and March.
Here’s what that means for potential buyers interested in dental practices: The best time to make a move is during the slower periods of September, May, and June. That’s when things are slow for most dentists, giving them time to begin seriously thinking of retiring or selling their current offices. Knowing the slower times of the dental calendar year is critical because purchasing during those times allows you to be fully settled in and prepared for the high traffic appointment periods of the year.
Buying your practice in May or June, for example, allows you to settle in, advertise, and get ready for the influx of new and returning patients who will be coming in for those back-to-school appointments in August. If you are looking for a slow time during the fall and winter months, September and November are also traditionally a slow time in the dental world, and many senior dentists begin to think about retirement and closing out the year around then.
What to consider when budgeting for your new practice
With the growth of your office comes additional costs, especially if you have never purchased a dental practice before. Does the dental equipment or office furniture need to be replaced? Would you buy or lease the office that houses the practice? What kind of financing would you need to get your dream of owning a dental practice off the ground?
Those looking to buy a dental practice should particularly keep in mind that many dental offices (and medical practices at large) are sold turnkey, which means that the practitioner can take over the existing lease or mortgage along with the current staff, equipment, and list of patients. Being able to jump into an established practice with a turnkey sale is a gamechanger, but it also means that prospective buyers have to be ready to put quite a bit of money down in order to get things rolling.
That is where the issue of financing comes in. The good news for dentists and other doctors interested in purchasing an existing practice is that lenders love doctors and dentists because of their high earning potential (and a high earning potential means that the amount and terms of your loan will often be favorable ones.
There are two kinds of loans a dental practice will likely need: a commercial loan and a traditional term loan. The commercial loan is typically a larger amount that you might use toward either the mortgage or lease your new office will require. You would pay this back over a longer period of time – usually between 5 and 10 years. The traditional term loan can be used for anything else your office needs, and you would pay this back between 1 and 5 years. This is how you can pay for new dental equipment, for example, or to upgrade the office furniture or computers.
Spreading the word about your new practice
Once you’ve bought your dental practice, the next step is to start attracting new patients while also getting the established patients of your new practice back into your office. Here are some proven ways to get new faces into the dentist’s chair.
Building a patient referral program: It’s been proven that word of mouth marketing is one of the most effective ways to spread the word about a product or office. After all, who better to speak about the quality of a dental office than the patients who have been going there for years. Consider building a patient referral program in which existing patients can win gift cards or other small prizes every time they refer someone new to your practice. One dentist told Dental Economics that one set of husband and wife patients regularly argues about who referred a patient in order to get the Target gift card reward for sending them to the office.
Marketing on the Internet and social media: In addition to word of mouth, marketing and advertising are key to spreading the word about your dental practice, particularly if the practice will be getting a new name once you take over. Does the office already have a website? Making sure it is up to date and has the office phone number on each of the site’s pages can do wonders in terms of getting a potential patient to actually pick up the phone or click through to make an appointment.
But most importantly of all, make sure that your website has a “call to action” to tell patients and potential patients what they need to do. (While most people like to think that they don’t like being told what to do, that’s not actually true — especially when it comes to taking the time to go to the dentist.)
Simply adding a line like “Call to schedule your next dental appointment today” or “Contact us to ask about teeth whitening” is often the push a patient needs before actually picking up the phone and getting things set up. Working with a web developer who can create a user-friendly website is often a wise budgetary decision.