Here are a few things to keep in mind when you consider the purchase of an existing dental practice: 1. An existing practice offers instant cash flow. Unlike a start-up practice, an established practice has an existing patient base — and just as important, an existing cash flow. This instantly allows the buyer (you) to support the practice debt load, including your new loan payment, your salary and your personal expenses. Lenders usually look for the dental composite kit and doctor’s personal income to cash flow at a ratio of a 1.20%, which means the practice is expected to generate a $1.20 in revenue — or collections — for every $1 spent between the practice expenses and the doctor’s personal expenses. 2. You’ll need a network of trusted advisers. Chances are you started associating soon after you passed your boards. During this time, you likely started conversations with industry experts about the possibility of acquiring a practice. You should not acquire a dental burs...
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