What is Buyer Due Diligence?

buyer due diligence with Cutting Edge Practice

Dental due diligence for the buyer involves a thorough and systematic approach to investigating and analyzing the entire purchase opportunity. It is about clearly understanding what you are buying and knowing how to use that information to make an informed decision regarding a practice purchase opportunity.  It is impossible to know the true nature of a practice by just reviewing the seller’s tax returns.

What are common buyer due diligence questions asked?

  • What information should I request from the seller?
  • How much income will I make?
  • What are the dental demographics?
  • Is the overhead in balance?
  • How do I get the staff to support me?
  • How do I reduce patient attrition?
  • Is there growth opportunity?
  • Should I buy the accounts receivable?
  • What do these dental reports mean?
  • How do I do a chart audit?
  • Should I keep the seller after the sale?

What kind of help will I get from your due diligence team?

No two practices are exactly the same.  Our Due Diligence Team will answer these questions and help you address the unique aspects of the practice you want to purchase.  After working with hundreds of buyers and sellers over the past 20 years, our consultants have developed a highly detailed 200-item Buyer Protection checklist. The Buyer Protection Checklist was designed to guide the buyer and the Due Diligence Team toward identifying potential opportunities and pitfalls. Using the results of this survey, your Due Diligence Team will work with you to create a Buyer Protection Action Plan specific to your purchase opportunity.

Here are some of the ways we have helped dentists make an informed decision about their dental practice purchase opportunity.

  • Get The Right Information.  We will help you gather pertinent information about the way the practice runs.
  • Analyze Dental Reports.  We will review reports with you and help you understand what they indicate.
  • Identify Staffing Challenges. We will help you analyze the impact the seller’s staff will have on the transition and stability of the practice going forward.
  • Evaluate Marketing Opportunities.  We will report the demographics of the community, outline the dental competition, review marketing done by the seller and suggest ways to add new patients.
  • Demographic Profile Of The Patient Base.  We will help you interpret the profile of the patient base and help project attrition.
  • Weigh the Option of Keeping the Seller.  There are pros and cons to keeping the seller as an independent contractor after the sale.  We will help you find the answer.
  • Assess Growth Potential.  We will help you project growth thru internal and external marketing, staff training options, treatment planning options, systems and cash flow management options, etc.
  • Value The Accounts Receivable.  We will help you put a value on the accounts receivable and discuss the pros and cons of taking over the seller’s accounts.
  • Review Relevant Documents.  Every practice has a different set of documents available to the buyer.  We will help you review and interpret documents collected from the seller.
  • Analyze The Recall System.   We will help you evaluate the recall system.
  • Overhead Analysis.  We will compare and project your expenses in relation to procedures completed and dollars collected.
  • Chart Audit.  Reviewing the dental charts (electronic records or paper charts) is an integral part of your due diligence.  We will help you systematically review the charts to develop an insight as to the number of active patients, the clinic note and treatment planning style of the seller, frequency of hygiene and diagnostic services and much more!
  • Advocate For You.  We will be your unbiased advocate throughout the due diligence process.

No business runs perfectly all of the time and small issues arise in all dental practices. Our Due Diligence team draws on years of practice sales, consulting, clinical and start up experience to offer practical solutions to manageable issues that arise during the practice sales process. We provide a dental business expertise that will supplement the advise you receive from your accountant and attorney.

Contact us by Email or call us at (312) 600 – 5003 today for your consultation. Your first hour of consulting is FREE!