- Non-Disclosure Agreement
The broker that you are working with is going to require that you sign a non-disclosure agreement with them. It is crucial for the safety of everyone involved in the transaction that you keep quiet about the sale of the practice. The purpose of such agreement is in order to protect confidential information about the dental practice for sale and keep it between the purchaser and the advisors of the purchaser. This agreement is bound between you and your broker. The broker can provide recommendations/referrals to dental specific accountants and attorneys
- Reach Out to Lenders
It is now time to identify and reach out to lenders that have experience in working with dentist offices. Lenders who have experience loaning to dentist offices are not particularly common, so this step may take some research. A bank that loans to dentist offices regularly is going to make the procedure much easier for you because they have knowledge of what exactly to look for.
- Go Visit the Office
Once you understand the information contained within the financial statements and it looks good, then it is time to go look at the dentist office. It is best to incorporate the advice and expertise of a national dental company in order to make an accurate evaluation of the equipment within the office. A good buyer representative has extensive knowledge about dental equipment well will typically be a dentist themselves. They will have the ability to look at the equipment and provide your insight into what you will or will not have to put more money into.
- Letter of Intent
Sending in a letter of intent is the best way to tell the broker that you are very interested in buying the practice, but it also gives you the opportunity to still back out. Submitting a letter of intent allows you to specify that you need a set number of days (usually 30) to do your due diligence and really decide if you want to make this purchase.
- Evaluate Financial Statements
Your broker is going to send you their financial statements so that you can evaluate them. If you are someone who has never dealt with financial statements and are not sure how to read them, they can be confusing. However, the information contained within them is incredibly valuable and can greatly influence your decision about buying the practice. It is best to hire a financial professional to assist you with this step to ensure that you thoroughly understand the information within the statements before you take the next steps forward.
- Purchase Agreement and Closing
The next step is to draw up your asset purchase agreement, ensuring that you include all critical details in the contract. Once you are satisfied with the asset purchase agreement, you will proceed to close.
- New Owner
The last step is when the seller hands the practice ownership over to you and introduces you to everyone as the new owner.