Dental Office For Sale: 4 Questions To Ask Before Investing

Many dentists may consider a dental office for sale as an opportunity to jump right into an established and growing business rather than spend the years it takes to build one. Companies with a loyal patient base and steady revenue stream can be enticing, though the initial investment might be higher than starting small and building slowly.

We’ve identified some critical questions to consider when buying an existing dental office for sale.

Is this dental office for sale in a good location?

You can’t fix a bad location. Most dental offices, whether they’re independent or corporate, tend to be real-estate driven – which means the practice location was selected to save money on real estate costs. However, today’s dental patient wants convenience, a spa-like environment, and to be treated like one of the family.

A dental franchise can be opened in locations that are centralized to attract and accommodate a large number of patients. In fact, this idea is at the core of the FLOSS Dental™ (FLOSS) franchise model. We look for retail locations in high-traffic areas to house our dental offices.

Does the math make sense?

An existing office often requires a sizable investment and can cost more than starting a dental franchise from the ground up.

Don’t rely on the seller’s valuation. You should hire an independent third party to provide an expert appraisal of the practice. This neutral party can remove some of the emotion from the negotiation and help quantify the business’ true value.

Once you confirm value, don’t shop by price alone. Established offices that are highly profitable will likely cost more. A dental office that costs $850,000 with good cash flow could be a better deal than the $700,000 one where the cash flow isn’t quite as positive.

The cost to buy a dental franchise remains stable and does not fluctuate wildly with economic conditions. Another benefit is that the investment is stated upfront in the Franchise Disclosure Document to avoid surprises.

What are the processes and technology?

The business model can also be one of the downsides of purchasing an existing practice. If the business has been operating with inefficient processes, those must be revamped before the company can achieve its full potential. If the technology is outdated and needs to be replaced, this is another costly change needed to make the business competitive.

This is where a state-of-the-art franchise dental businesses such as FLOSS™ have an edge over independent dental offices. Often, franchisors bear a large share of the costs to implement, alter, or upgrade technology that benefits the whole system.

Does the dental office have a good reputation?

If the existing dental office has a poor reputation in the community or many negative customer reviews online, this may pose a challenge for new owners.

You not only buy a business, but you also buy a reputation. If the practice has a history, it may be tough to overcome.

The brand awareness, reputation management, and strong marketing programs offered by franchised businesses can help conquer any negative attitudes and spread the good word about the business when it opens in a new market.

The franchise option

There is a lot to consider when presented with a dental office for sale. The advantage to buying a franchise is that many decisions are already made based on past successes, and the support and resources are there for you. Your chances of doing well with your venture are increased when you join the ranks of franchisees rather than going it alone.