New dentists looking to get into their practice have options today of buying a current dental office for sale or building a new practice. While building a practice from scratch can be attractive and exciting, it can also be reassuring to purchase a practice with an existing client base, especially with many older dentists approaching retirement age.
The valuation of an existing practice is an important step in developing your budget. When budgeting to purchase a practice, be sure to budget approximately 3-7 times the practice’s value as measured by EBITDA (a proxy for cash flow).
Once arriving at a practice’s valuation, the dentist will have to keep in mind that some of the practice’s current patients will leave, either because they liked the dentist or didn’t want to have a different person at the same practice. Some leave because they want to go somewhere new than their family goes.
Buying a new dental practice by starting your practice with a decent cash flow to begin is a great help. The best way to find a practice for sale is to find a broker with a practice per sale. Buying an existing practice can be challenging, but can also show some real possibilities over a practice startup.
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