UMKC Student Night
We were pleased to host members of the 2014 class at Jack Stack Barbecue for an evening of entertainment and discussion about future practice ownership. The students were great company for the evening, and the food was, as always, delicious. Over the course of the evening, a few recurring questions kept popping up, and I thought you might be interested in what was on their minds. I think their peers would find the questions familiar, and perhaps selling-age doctors might gain a little insight. One thing is certain: we will do this again.
Answers to FAQs
1. No, you should not sign a noncompete agreement on the first day of your employment. We think a 90- to 120-day honeymoon period is appropriate before you run the risk of not being able to practice in the city you are living in. If the employer is insistent, have them call us. By the same token, you should not expect to practice beyond that window without signing.
2. No, you should not buy a house before you buy a practice, no matter how much you think you want to live in that neighborhood. Tying yourself down geographically guarantees you that you will have to pass on some great practice opportunities.
3. No you cannot work without some sort of a guaranteed base salary. Student loan debt payments begin 6 months after graduation and you need to be making some money.
4. The chances of buying the practice you go to work for are very slim and if a clear path (time and money) to ownership is not in place before you start, the chances fall to almost zero.
5. Yes, the financial opportunities are probably better away from the shadows of downtowns with big buildings. At least consider a fresh air location.
6. Yes, the protection of your good credit is paramount. We have an assortment of lenders who will fund 100% of the purchase price plus operating capital but if you make application with a 600 credit score, expect to remain someone’s employee for a long time.
7. Do not expect the seller to mold and protect you like the “Good Hands of Allstate” after the sale as the likelihood is that he will have already worked his last day before the closing. Most practices are not big enough for the both of you (in more ways than one) and usually the first thing you will need for him to do is pack up his stuff and get out of your way.
8. Your “Ideal Transition Model” of going to work for someone, buying their practice someday in the future and retaining them as an associate afterwards is a myth. Quit wasting your time and make another plan.
9. No, you do not need to accumulate a lot of money for a down payment towards a practice acquisition. See #6
10. Be careful taking practice transition advice from people who have never sold someone else’s dental practice. Would you take golfing lessons from someone who had never played the game? Your career seems more important.
Steve Wolff, DDS
UMKC Class of '77
How To Make An Offer On A Dental Practice
Bankers, attorneys, accountants and yes, even practice brokers can get a little fussy with prospective buyers and the offer to purchase process. Let me remind everyone that while the process seems simple to those who have had some experience with practice . . . Read full post
Chad Barth, DDS
– Kansas City, MO
Michael LeSage, DDS
– Kansas City, MO
Thinking about refinancing your practice loan to take advantage of historically low rates? Get in touch with one of our preferred lenders today.