Your Complete Guide to Buying a Dental Practice
Owning a dental practice can be an exciting prospect for many dental practitioners looking to take the next step in their career. There are many long-term benefits to ownership, but as with any financial investment with high personal and professional stakes, it can be a daunting experience.
As experienced dental fitout specialists in Sydney, we know that no two practices are the same, and neither are two paths to owning one. Whether you’re looking to buy an existing practice or set up a new one, there’s a lot to consider, especially if you want to keep your costs down, your timeframes sharp, and your compliance in order.
In this guide, we’ll look at what it means to buy a dental practice, steps to help set your business up for success from the start, and how a professionaldental fitout can help bring your vision to life.
Why Buy an Existing Dental Practice?
There are three routes available to anyone looking to own their own dental practice: buying into an existing dental practice, purchasing all of an existing practice, or building your own practice from the ground up.
While setting up a brand new practice may come with a slightly lower initial price tag, it generally costs less in the long run to buy all, or some, of an existing dental practice.
This is due to several contributing factors, primarily the advantage an established practice offers with its first-day patient base and revenue flow.
To help you determine which path to buying a dental practice is worth it for you, we’ve compared some of their main benefits and common challenges below.
Buying an Existing Dental Practice
- Having an existing patient base ensures income flow from day one
- Financial institutions, like banks, often view established practices as lower risk for loan approvals
- Equipment and furniture in the dental practice fitout are often included in the sale
- Any equipment or software may be out of date and in need of replacement
- A negative reputation can lead to an increased marketing spend
- Updating old infrastructure or facilities can quickly increase your early spend
Setting up a New Dental Practice
- Opportunity to fill a gap in the local market and answer unmet demand
- Equipment and facilities are modern and new, minimising initial maintenance costs
- Build a practice that reflects your unique values and vision
- It will take time to build a steady flow of revenue without an established patient base
- High initial setup costs to cover equipment fitout, hiring, and marketing
- Banks may not approve financing for businesses without an existing cash flow
Cost of Buying a Dental Practice in Australia
When it comes to calculating how much a dental practice costs to buy, you’ll quickly discover that exact prices will vary depending on a number of factors.
Most of that variation will come down to whether you’re buying an existing practice or starting one from scratch, but it can also be influenced by the likes of clinic location, the size of the practice, the number of treatment chairs or rooms, and the overall profitability of the business.
For example, a small dental practice located in a regional or suburban area may sell for $300k–$500k, while a larger dental clinic in a major metropolitan city like Sydney can cost anywhere from $1m to over $3m.
The total cost of buying a dental practice can increase if your space requires significant work to bring it up to standard and into the modern healthcare age.
If you’re unsure about what this means for your business plan, a professional dental fitout specialist can help you assess and manage any additional compliance costs, all the way from planning and design to construction and handover.
What to Consider When Buying a Dental Practice
Whether you intend to buy all of an existing dental practice, or some of one, there are many steps to the acquisition process, and it may feel overwhelming at first glance.
There are several things you can do beforehand to help minimise the time, effort, and cost of your search, and to ensure you’re building a strong foundation for your new business.
We’ve covered some of the key factors to consider as you embark on this ownership journey, so you can make informed decisions to support the financial gain, career growth, and long-term success of your new dental practice.
Buying a Dental Practice Checklist
Set Realistic Expectations
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Why do you want to buy and own your own dental practice?
Whether your reasons are to have more control over your career, greater financial reward, or the freedom to offer the services you’re most passionate about, if you don’t know what unique value you’re offering, your patients won’t either.
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What area of dentistry do you want to specialise in?
The practice you buy should reflect the kind of work that you like to do, and services you want to offer.
Specialised services require specific equipment, layouts, and approvals before you can start treating patients, all of which will need to be considered as part of the practice’s full dental fitout.
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Do you want to own a practice outright or a portion of one?
Owning and running all of a dental practice comes with significant responsibility, but with the freedom to build and design something unique to your values and business goals.
Buying some of an existing dental practice means entering a partnership with a fellow practitioner or associate and can alleviate some of those obligations, but may require compromise down the line as you navigate your shared responsibilities and conflicting visions for the space.
Know What You’re Buying
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Do the professional values, services, and philosophies of the existing practice reflect your own?
Similar styles and preferences can help streamline the transition for everyone involved, whereas conflicting approaches can create additional hurdles in both the short and long term, such as employee turnover and dissatisfied visitors.
Patients and staff will be used to a certain way of doing things, and will be familiar with the layout and flow of their practice, so you should consider the impact any changes or renovations you plan to make will have on their experience.
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How many competitor dental practices are in the area?
If someone else is already offering the services you want to bring to the dental chair, and they’re already having success, you may struggle to differentiate your practice.
Consider the dentist to patient ratio of these competitors too, and whether it’s worth trying to break through in the local market, elevate your patient experience with a professionally-designed fitout, or find a location more suited to your goals and long-term success.
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Why is the previous owner selling?
It’s important to assess the risk of any major investment, and if there isn’t a clear reason why a practice is up for sale – especially if it’s concealing poor finances, third-party audits, or challenging partner relations – you may be buying your way into a complicated situation.
Akord Projects can help you protect your investment, and your budget, by conducting thorough due diligence checks that audit and evaluate the practice’s feasibility, its compliance history and potential, and the risk of further issues down the line.
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Are all of the practice’s facilities and equipment up to standard?
One of the potential hurdles when buying an existing dental practice is that its existing setup may be dated or not suited to your unique style and vision.
This can quickly lead to additional costs as you replace and maintain old equipment, expand your services and facilities, or make any new purchases to support your daily operations.
Professional healthcare fitout specialists can help you navigate the complexities of any renovation work, ensuring every inch of your practice is compliant, considered, and designed to function as beautifully as it looks.
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How many active patients does the practice have?
Take a close look at the current patient demographic and how many people regularly visit the practice.
If total patient numbers are rising, that could be a sign of growth in the area, while falling numbers could indicate a need for additional marketing spend.
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Is the practice in the right location, with the right patient demographic?
While some patients are willing to travel for their dental care, many will choose the option closest to home if possible.
You should already know the services you want to offer and the patients you want to attract with them, so consider buying a practice located in the areas they’re already inhabiting, or would be willing to travel to.
The number of patients you expect to visit your practice will also determine how you design your dental fitout for success – from how big the space needs to be to the flow of your waiting and treatment rooms, and your technological capacity to provide effective care. If increasing your total patient count is one of your objectives, this is also when you should assess if the site can expand for future growth, and how a professional fitout specialist can help you relocate and upgrade your practice.
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Have you conducted the necessary legal and compliance checks applicable to Australian dental practices?
Due diligence is critical to the success of your practice, protecting not only your business but also your patients, staff, and professional reputation.
The standards for regulatory compliance in dental practice fitouts in Australia are high to ensure that every facility is built for patient safety, accessibility according to The Disability Discrimination Act (DDA) and National Construction Code (NCC), and with the correct statutory and development approvals in mind.
The compliance review and approval process can be a lot to manage, but an experienced dental fitout specialist like Akord Projects can help to streamline the process, providing end-to-end support and professional advice tailored to your business goals.
Bring Your Vision to Life with Akord Projects
With over 20 years of experience delivering end-to-end support and tailored healthcare fitout solutions, the healthcare fitout specialists at Akord Projects are here to help.
We know that whether you’re buying a new practice or setting up your own, you need a design that goes beyond the floors, ceiling, and everything in between.
If you’re thinking about the challenges of balancing efficiency and cost with aesthetics and patient experience, we can help you plan a space that’s custom-built for your flow, and every bit as functional as it is beautiful.
Contact us today, and let’s get started.
