How to prepare your dental practice for a corporation to purchase

Since Blue Jay Dental works with many corporations nationwide, we often get asked what corporations look for when buying a dental practice.  Here are some helpful tips that we have learned along the way.

1. Corporations like practices that have been successful.  The bench mark gross revenue and profitability varies from corporation to corporation, but most like to see a dental practice with at least $600,000 in yearly gross revenue

2. Corporations like to see success for a steady period of time.  Most corporations like to see at least 3-5 years of gross revenue over 700k or greater.  Obviously,  the practices that continues to progress or at least maintains at this level will be more attractive than one in decline..

3. Corporations like dental practices with at least 5 operatories (4 at the minimum or room to add).   The more operatories you have the better (within reason).  Corporations will want to grow a practice into a multi-dentist operation and the more operatories you have the more appealing they become.

4. Corporations like the selling dentist to stay on board for a transitionary period.  Most corporations like the selling dentist to stay on board for at least 1 year.  Most want 2 years.  If you plan to sell to a corporate buyer, expect this.

5. Corporations like overhead controlled-  Most corporations desire a practice that is highly profitable and with low overhead.  It is recommended that a dentist be strong in receivables and not have too much non-revenue producing staff.   At Blue Jay Dental, we have seen many practices fail to sell due to this fact.  It is critical for the dentist owner to make sure staff payroll is inline with national averages of succesful practices and supply costs are also controlled.

If you would like more information on selling to corporations, please email me.