So you want to be a practice owner someday: Working with professional advisors
Editor’s note: This is the third article in a summer series of New Dentist Now blog posts on practice ownership. To read other articles from the series, click here.
Whether you’re buying or building a practice, you will need a team of reliable advisors to support and guide you through the process and create the outcomes you envision. You’ll want to surround yourself with people you trust to help meet your goals. Here’s an overview from Wells Fargo Practice Finance, the practice lender endorsed by ADA Business Resources, of the professionals who should make up your core team of advisors, the services they provide, and why they are important.
- Develops tax projections, plans, and estimates
- Prepares and files tax documents
- Can help establish financial procedures and collections practices
- Advises on tax and accounting implications of business and investment decisions
- Impact: Your accountant protects your business by accurately tracking your income, expenditures and cash flow for tax filing purposes, and helping to ensure your business runs efficiently within budget.
- Provides funds and resources for opening your practice
- Services financing agreements
- May offer useful tools and resources to help manage and grow your new practice
- Impact: Your lender can make your practice investment possible by structuring a financing program that fits within your budget.
Practice Broker (Acquisition only)
- Identifies practices available for sale
- Can offer valuation and appraisal services
- Works with attorney to provide sample agreement of sale
- Helps negotiate the transaction, structure the transition, and coordinate financing
- Impact: A practice broker can save you time and money by presenting qualified purchase options.
- Negotiates and drafts contracts, leases, and employment documents
- Assists in forming business entity
- Can provide legal advice on business and tax planning, estate planning and will preparation
- Impact: Your attorney functions as your advocate, helping to ensure contracts and legal documents are prepared and executed both legally and in your best interest.
- Evaluates existing coverage and recommends most effective protection
Impact: An insurance broker can help preserve your practice value by insuring you against loss.
ADDITIONAL TEAM MEMBERS FOR START-UP
If you’re building a start-up, you’ll need several additional advisors on your team to help manage the project.
- Builds your facility according to your plans, and to suit your business and personal needs.
- Recommends structural changes to optimize the practice’s functionality
- Impact: Your general contractor can help protect your physical assets from structural and environmental damage, and can provide counsel and advice on transforming a new practice location to fulfill your vision.
- Measures your selected location to evaluate whether it is suitable for a dental practice
- Suggests possible office design layouts
- Works with architect to develop structural drawings and mechanicals.
- Helps you select and place equipment.
- Impact: Your equipment supplier can help assure the appropriate selection and integration of equipment and technology in the practice.
Depending on the nature and scope of your project, you may also want to include any or all of these professionals on your practice start-up team:
- Interior designer.
- Lease negotiator.
- Local practitioner/mentor.
- Marketing consultant.
- Project manager. (Click here for more information about the benefits of adding a Project Manager to your team)
Benefits of a Practice Management Consultant
Another specialist who might prove valuable to your practice acquisition or start-up is the Practice Management Consultant. This type of advisor works with you and your team to help ensure your business systems and internal structure are properly positioned for full functionality, profitability and success. The Practice Management Consultant can help minimize the stress of transitioning to a new practice by identifying potential areas of improvement and working with you to develop a plan for change.
It’s neither necessary nor advisable to go it alone when purchasing or building a practice. Start putting together the right professional team for your situation, and you’ll soon find that your new practice is becoming a reality.