Saturday 1 April 2017

More than you ever wanted to know about buying a practice

This is going to be super long, and probably of very little interest to most people. Please skip if you want.

This is how it all started: I was at work on a normal Friday and got a call on my cell. The person said they were a realtor for dental practices, and the other dental practice in our town was for sale, and the seller was interested in Jon and I as a potential buyer. I was like, hmmm, probably not. Thanks anyways. I told her I would run it by Jon but it's not something we had really thought about. I was in the middle of doing a maternity leave here for a dentist who I really respect and I was hoping to get on permanently with her. It's always hard as an associate because you don't really have job security after your contract ends. My contract was ending in another month, but I wasn't too stressed about it because I knew that the people I was working for were happy with me. I have only ever worked three days a week since becoming a mom. There was a full-time position available to me 20 minutes away, but I only wanted part time, and I love the shortest commute ever. So I was feeling hopeful that I would still have work at the clinic I currently worked at.

Anyway, I talked to Jon about it that night. Jon was doing a contract for the military that ended in 4 months. It was a really unique job for a dentist because he did not work with kids, seniors, or really anyone but healthy soldiers. He liked it but he knew for sure that he wanted to return to private practice where he would see all kinds of patients. So when I mentioned the practice to Jon, he was interested.

So we decided to put in a letter of intent. This is basically just an official document that said we were very interested and that we didn't want the seller to sell it to anyone else while we looked into things. We gave a deposit that was refundable if we opted out. We signed confidentiality agreements so that we could look at the details of the practice and could not share them with anyone. At this point we had to get a lawyer, an accountant, and an advisor at the bank. Which felt crazy to me, but you really need all these people, even if you aren't definitely going to buy the practice. This is also the point where I decided I had to tell the dentist I worked for. Her practice and the practice that was for sale are VERY close. Like, less than 5 minutes drive. So even though I didn't have a non-competition clause in my contract with her because it was a locum, it still felt wrong to keep it from her. She reacted in the best possible way, and was so supportive. We agreed that I would stay working for her. We didn't tell anyone else, and I kept her in the loop throughout the entire process. That aspect of the whole experience could not have gone any better, and my former employer is still a great friend who I communicate with all the time.

So then we went to the bank to see if they would loan us a lot of money. We needed 100% financing, which is typical for a business like ours. I would suggest to anyone trying to buy a large business to ask the bank advisor, lawyer, and accountant if they have experience dealing with the exact type of business that you are trying to buy. In our case, our lawyer and accountant had done lots of dental practice deals, which was so so helpful. Our bank advisor had not, and if I could go back in time, I would have shopped around for an advisor with experience in our area. Every type of business is very unique and has really different requirements for getting a loan. I know our advisor learned a lot in our deal, but we missed out on having someone who knew what was up.

Then we kind of had a few months of just back and forth with lawyers. We didn't actually know the selling dentist, so all communication was done through lawyers. That made it take such a long time. It felt like forever too because both our jobs were ending soon and we weren't sure if we should be looking for new jobs or now. We had to jump through a lot of hoops. The obvious ones were our finances. We had to prove that we were not in debt too much, etc. Then we needed a ton of insurance. I feel like we actually have about ten insurances right now. Jon and I had to go through rigorous medical testing including multiple bloodwork tests, urine, EKGs, full physical, and so many questions about our families' health. We had to get multiple inspections on the property that we were buying. We also had to nail down a price. That was surprisingly easy, but we did go back and forth a few times. We had so. many. meetings. with our accountant, lawyer, the bank, etc.

Meanwhile, we found out I was pregnant, and I got so sick. Way sicker than I was with Cohen. I would just spend the whole day laying on the couch. Our banker even came to our house a few times for me to sign documents because I could not get up. Everything was a struggle for me. I couldn't look at food, or even think about it. I found it really hard this time because I couldn't do much with Cohen. He watched a lot to TV during those few months while I slept beside him. I was sleeping at least 15 hours a day. And Jon had to shoulder the bulk of the phone calls and meetings for the practice-buying. I was able to get to work, but I had to kind of lay in my chair on breaks. I was basically miserable. I lost over ten pounds.

So then in February, everything sped up. Jon and I both stopped working in preparation for a fast closing date. We scrambled to get everything done before closing. One closing date came and went. This is what happens when you are closing a huge deal like this: The bank has pre-approved you for this huge loan. They have given the seller a "comfort letter" that says you are getting the money. And then days before closing, they are like, yes, but you need all these different types of inspections and insurances that we never told you that you need. And it's just impossible to get these things done in a day. So a second closing date two weeks later just barely happened because of more bank stuff, and then we got the text that we were funded and the deal was done. That night we went and picked up our keys. We were too exhausted to really celebrate, but we were so happy. That was a Friday, and we started working on the Monday. Only now, a few weeks later are we starting to feel our lives go back to normal a bit. Thank god we only have to buy one practice in our lives. It's not fun. It's like buying a house, only a million times worst.

It was all worth it because owning this practice with my husband feels so right. Jon and I are such a good team. I always tell him that if not for him pushing us a little out of our comfort zone, we would still have the same travelling dentist jobs we had when we first graduated. I am less into change, and really don't like to say goodbye to coworkers who have been good to me. I miss the coworkers who are now 5 minutes down the road from us, but I also love our new staff, and feel really good about this huge learning experience.

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