When you’re thinking about buying a practice, here are some things to consider:
1. Make a list of the reasons why you want to buy all or part of a dental practice. Think about each reason and write down the benefits you hope to realize. Talk about your list with one or more trusted advisors to see if your hopes are realistic.
2. Determine the best timing for your purchase. To do this, you need to know what type, size and location of practice is right for you and what clinical and business skills are required.
This will be hard to do without some exploration and expert advice. You need to understand your own situation well, find and consider high-quality options that are right for you, and plan ahead for your needs and wants. Good fortune is where preparation meets opportunity.
3. Assess what your goal requires. You need to understand what your new purchase requires of you and where you can obtain the resources to be successful in the acquisition and profitable transition of the practice, and in the management and value enhancement of your purchase afterwards. If you are going to make a sizable investment, you’ll want it to pay high dividends for as long as you own it.
4. Will you have enough money after paying your loans and taxes? What tax strategies can enhance your cash flow after the sale? Are there creative ways to structure the purchase to save you taxes later? Ask your tax advisor about the right legal entity for your purchase, an asset allocation that gives the seller a loss on leasehold improvements and keeps them off of your return, buying the receivables on installment payments to defer seller’s income and accelerate your write-off while giving you immediate cash flow, making payments directly to the seller’s charitable trust or foundation, and other creative tax strategies that are not only good for you, but for the seller, too. Think win/win in tax planning.
5. Plan a one-year practice-enhancement program after your purchase to increase the cash flow of your new practice enough to make your loan payments. In other words, how can you buy the practice for free and build cash flow and equity fast? Solve a few problems, get fees where they need to be, reactivate inactive patients, update the systems, get more new patients, and make the practice more attractive to your team members and patients. Ask a consultant for the best strategies for your transition and include the costs in your purchase loan to save cash flow and taxes later.
When you think about buying a practice, think about your reasons. Think beyond your purchase. Consider increasing cash flow, creating tax savings, building equity rapidly, and also what motivates you. These are the key variables that will pay off your loans and give you the rewards you want for your future. Seek expert help, and plan ahead for best results.
Source: dentistry.com
1. Make a list of the reasons why you want to buy all or part of a dental practice. Think about each reason and write down the benefits you hope to realize. Talk about your list with one or more trusted advisors to see if your hopes are realistic.
2. Determine the best timing for your purchase. To do this, you need to know what type, size and location of practice is right for you and what clinical and business skills are required.
This will be hard to do without some exploration and expert advice. You need to understand your own situation well, find and consider high-quality options that are right for you, and plan ahead for your needs and wants. Good fortune is where preparation meets opportunity.
3. Assess what your goal requires. You need to understand what your new purchase requires of you and where you can obtain the resources to be successful in the acquisition and profitable transition of the practice, and in the management and value enhancement of your purchase afterwards. If you are going to make a sizable investment, you’ll want it to pay high dividends for as long as you own it.
4. Will you have enough money after paying your loans and taxes? What tax strategies can enhance your cash flow after the sale? Are there creative ways to structure the purchase to save you taxes later? Ask your tax advisor about the right legal entity for your purchase, an asset allocation that gives the seller a loss on leasehold improvements and keeps them off of your return, buying the receivables on installment payments to defer seller’s income and accelerate your write-off while giving you immediate cash flow, making payments directly to the seller’s charitable trust or foundation, and other creative tax strategies that are not only good for you, but for the seller, too. Think win/win in tax planning.
5. Plan a one-year practice-enhancement program after your purchase to increase the cash flow of your new practice enough to make your loan payments. In other words, how can you buy the practice for free and build cash flow and equity fast? Solve a few problems, get fees where they need to be, reactivate inactive patients, update the systems, get more new patients, and make the practice more attractive to your team members and patients. Ask a consultant for the best strategies for your transition and include the costs in your purchase loan to save cash flow and taxes later.
When you think about buying a practice, think about your reasons. Think beyond your purchase. Consider increasing cash flow, creating tax savings, building equity rapidly, and also what motivates you. These are the key variables that will pay off your loans and give you the rewards you want for your future. Seek expert help, and plan ahead for best results.
Source: dentistry.com