It is a common occurrence for a dentist to experience that light bulb moment of "Wouldn’t it be nice if I could own my own dental practice?". At this point, you need to start getting the right advice.
A specialist dental accounting team is essential when making significant financial decisions, to avoid costly mistakes down the line.
We at Amalgam Advisors are armed with the experience and knowledge needed to ensure a smooth transition to ownership at a time that is typically stressful, and have considerable expertise in dealing with financial and legal firms also involved in this process.
With over 20 years of experience helping dentists all over Australia become business owners, we have the answers dentists are looking for.
Amalgam Advisors provide valuable advice, support, and attention to detail, quickly identifying issues that matter, allowing the purchasing dentists the confidence they need to follow their dreams. We provide all the services required when buying a dental practice.
- Business valuation and due diligence
- Review of the sale contract and advice on the most appropriate structure for trading
- Assist with the formal offer for the practice purchase
- Set up your new trading entity including liaising with your legal advisor and financers
- Application for all necessary ATO registrations
- .Set up the bookkeeping software to get you up and running on settlement day.
The buying process timeline – what happens when?
- Find a practice.
- Receive financial information and have it reviewed by your accountant.
- Visit practice and discuss the business with the vendor.
- Discuss valuation of the practice with your accountant and agree on an offer price.
- Organise loans with your financial institution.
- Accountant sets up corporate structures and trading entities.
- Heads of Agreement is signed, and deposit paid.
- Practice is taken off the market.
- Sale contract is signed.
- Engage a tax accountant who understands your business.
Having an industry expert on your side can help you avoid some of the many pitfalls you may encounter when purchasing a practice, for example:
- Does the practice actually exist? Believe it or not, dentists have purchased existing practices sight unseen that had been shut for years or never existed! Even a practice valuation or due diligence is not foolproof, you need to visit the practice.
- Are your Service and Facility Agreements up to date to accommodate the new payroll tax legislation regarding restriction of trade? Will other dentists be staying on? How easy are they to replace, particularly in regional areas? What handover agreements are in place with the vendor dentist?
- Is your entity setup correct? Trading vs Services Trust or Incorporated? Once set up this can be difficult and expensive to change later down the track. Your practice should be set up with an exit strategy for disposal or succession in mind to avoid headaches later on.
- Who owns the premises? Very often the premises may be owned by the vendor dentist with rent being paid below market prices. This must be taken into account when making an offer on the practice. Is the building also for sale and should you purchase the freehold or would leasing be a better option?
- What about setting up your own dental practice from scratch? How does that compare to buying an existing practice?
If you are considering starting or buying a dental practice, reach out to your Credabl consultant to book your complementary consultation and start the conversation.
