Hassle-free guide to buying a dental practice

During the current economic climate, property prices are fluctuating greatly, with average market prices rising and falling with more regularity that a dental chair.
Whilst cautious buyers may be looking to wait until the market evens out, striking whilst the iron is hot can often lead to getting a great deal. So, if the perfect property presents itself now may be the time to take the plunge.

Finding the perfect property

Finding the right property is not always simple. It is important to be honest and consider whether the property has the necessary elements that will make your practice successful. Key factors to consider are-
• Location – thoroughly research the client base in the area, and ensure that the demand is there
• Accessibility - Consider factors such as parking availability and public transport links – there is no point having a state-of-the-art surgery that nobody can get to. Also, is the property suitable for wheelchair access/disabled facilities? The provision of this is a legal requirement, and must be considered.
• Research the opposition – Is there another practice nearby offering the same treatments as you? If so, research their price ranges and consider if you would be able to afford the competition.
From a business perspective the key necessities must of course be in place, but starting a surgery is for many a once in a lifetime experience, so the property must tick some personal boxes too – after all, you will never love your place of work if it is anything less that perfect and any niggling doubts about the property can ultimately lead to expensive and time-consuming renovations. If in doubt, move on, there are hundreds of properties available and one of them will be the right choice.

Negotiating the finance minefield

In this current climate negotiating an affordable, manageable commercial loan can be a little daunting.
In 2009 the banking world was turned upside down following the collapse of Icelandic banks and multinationals such as the Lehmann Brothers, since which the government has offered scant comfort. With this in mind, it is understandable that many people have been put off looking into arranging further finance, for fear of what will happen next.
However, despite the difficulties in obtaining funding, many organisations are still keen to lend to the dental sector. Banks do still have funds available, and many believe dental practices to be a ‘safe loan’, and would consider loaning higher amounts. In fact, there are undeniable benefits to taking the plunge now, including-
• The financial sector is looking favourably on dental practitioners and is keen to lend.
• The new NHS dental contract is set to make a practitioners’ income stream more regular, so working out repayments will be made simpler.
• Patients are becoming more aware of the need for regular dental care as well as aesthetic treatments, leading to a higher turnover.
From a purchaser’s point of view, the attractions are obvious. Lending has become more flexible since the crunch clamp down, with banks keen to get the ball rolling as soon as possible. With this in mind, your financial adviser will be able to explain the different options of practice finance available before you apply. Variable interest rates are an important point to consider for now and the future and, as such, it is vital to take the time to thoroughly research all of the available options.
There are as many varieties of finance as there are customers who apply for one: the trick is not the application, but ensuring that the loan you are applying for matches your needs perfectly. Options include –
• Variable rate – A variable rate mortgage’s monthly payments are constantly moving, fluctuating depending on changes with interest rates. This option is ideal if the Bank of England interest rates plummet, but can be considered a brave option for a person with a variable or uncertain income. The majority of dentists have historically borrowed on a variable rate and are now enjoying unprecedented low interest costs.
• Fixed rate – A fixed rate is the titanium implant of the mortgage world. Interest rates are fixed, and set at that rate for a fixed period – so you know exactly what is going to be charged on a monthly basis. Admittedly, if interest rates fall you could find yourself paying more but there are no nasty surprises.
• A combination – Some larger deals are structured so that half the finance is on a variable rate and the other half on a fixed rate providing some security on the repayments.
A financial adviser will be able to suggest the most appropriate loan for individual circumstances, and it is always wise to consult a professional before making a decision. After all, it is possibly one of the biggest decisions that anyone will make in their working life – so it is advisable to get it right!
Realistically, taking the financial plunge is never going to be an easy decision, and there will always be the potential for pitfalls along the way. However, for dentists now is as good a time as any!

Making the practice your own

Whether taking over a previously owned practice, or converting a property from scratch, this is the opportunity to let your personality shine through and really put your stamp on the place. After all, you will spend a large proportion of your life at your place of work so it is important to ensure that you are happy working there, and that patients are happy visiting!
It is worth visiting other surgeries in your area to gauge the interior and exterior decor that they have chosen, after all, if it successfully drawing patients through the doors, they must be doing something right.
Whilst drawing inspiration from other practices is a good idea, make sure that the final design you decide upon is your own. Branding is very important in order to help potential patients memorise your practice name, and even the colour you chose for your font door should match your corporate identity – it may seem daring to paint your front door lime green, but if the colour scheme is carried through the surgery, including cushions, feature walls, corporate literature and even work surfaces in the surgery, patients will soon start to subconsciously recognise the branding. In fact a recent client has decided to rip out the wooden front door and replace with a full glass door to ensure the practice is as welcoming as possible.
Taking the plunge and going it alone is a nerve-wracking prospect, and one that should not be undertaken lightly. All stages are complex, especially considering the financial climate, and it is advisable to consult an expert before proceeding, in order to avoid any pitfalls along the way.