Dentists interested in purchasing their own practices need to be aware that they are engaging in one of the most crucial financial decisions they can face. There are many things they must prepare for before becoming the buyer in a dental practice sale in Arizona. Here is a breakdown of what type of information they should gather.
* Get the past four years of tax returns. By doing this, the potential buyer can have their accountant analyze the data for performance history and trends. This way, the financial stability of the practice can be determined before offers, if any, are made.
* Request a practice valuation that was performed by a certified third party. Checking the credentials of the certificating agency is also a must.
* The accountant for the dentist should be able to put together a cash flow model that projects income and expenses the next ten years after the practice is purchased. This is done to provide a reasonable expectation of such things as growth rates, operating expenses, and the debt incurred to purchase the practice.
* A copy of the real estate agreement should also be procured. This is done to inform the potential buyer if the building and land are available to also be purchased or if there is a strict lease agreement in effect. The total amount of real estate or physical property being sold will have a dramatic effect on the dental practice sale in Arizona.
* Look at any accounts receivable that are aged. If there are too many, this is an indicator that current bill collection methods are not working or are not being strictly enforced.
* A list of the current staff and their salaries is also a must. The job function of each employee needs to be determined, and the decision must be made if they will remain a part of the practice after the sale is completed.
After gathering this information, it may be a good idea to go through a dental sales broker that has an honest history. A company such as Western Practice Sales can ensure the terms are beneficial for both buyer and seller. They will also have the experience to be able to have all of the above information already compiled, thereby reducing the waiting time.
