Once due diligence is completed and both parties agree to the terms of the transaction, it is time to close the deal. Here’s what you need to work on between approval and closing:

SET A CLOSING DATE
Together with the buyer and your lawyers, determine the closing date, which will represent the day ownership transfers from the seller to you.

DRAFT A PURCHASE AGREEMENT
A purchase agreement is a legal document that transfers ownership from the seller to the buyer. This document contains the terms of the sale like:

• Purchase price
• Non-compete agreements

FORM A LEGAL ENTITY
Form a new entity, like a corporation or LLC, early in this time period. The deal cannot close if the entity is not active at the time of closing.

You will need to obtain an Employer Identification Number early in the process as well. This number is often needed for bank accounts and other business needs.

SECURE A FACILITY OR REAL ESTATE
During the due diligence process, determine how you will secure the facility and/or real estate. If the seller is leasing, plan to assume the lease and learn what the cost and terms are. If the seller is choosing to lease the property themselves, work with them to determine what that will look like. A good rule of thumb is if there is less than five years left on the existing lease, negotiate a lease extension during the purchase.

If the seller chooses to sell the property, work with a commercial real estate advisor and your attorney to carry out that process.

DRAFT A SELLER EMPLOYMENT AGREEMENT
If the seller is remaining with the practice, outline their role and benefits.

DRAFT EMPLOYEE RETENTION AGREEMENTS
Create legal documents that outline the terms under which employees agree to remain with the practice. Include compensation, benefits and job responsibilities. Limit these agreements to associates, with limited exceptions for spouses and other circumstances.

SET UP BUSINESS & PERSONAL INSURANCES
Insurance is essential to protecting you and your practice from potential liability lawsuits and loss of use of equipment. Your insurance consultant can help develop your practice’s insurance plans and assess the types of corporate insurance coverage you may need.

We recommend life, property, workers’ compensation, disability, overhead, liability, and malpractice insurance policies. Disability insurance is especially necessary as a dentist’s hands are your most valuable asset, and any serious injury or ailment would prevent you from working.

SECURE EMPLOYEE BENEFITS
As you review current employee benefits, it’s important to continue existing benefits through the transition period and then look to add additional benefits post-closing. Set up healthcare, retirement and other compensation plans during this time to ensure employees don’t have a period of no insurance coverage or a pause in their retirement savings.

CREDENTIAL WITH INSURANCES
Your practice will not be able to function properly and efficiently without being able to transfer the existing practice’s insurance plans to work with patients’ insurance companies.

Insurance credentialing is a critical aspect of preparing your practice for transition. This multi-step process involves deciding which insurance companies to enroll with, completing provider applications and negotiating fees.

A practice management consultant can help with this potentially complicated process. This process will vary state by state and according to the insurances the practice currently accepts.

SET UP BUSINESS BANKING SERVICES & OPERATIONS
Work with your lender and bank to set up business operations so your practice can run efficiently.

Bank accounts, methods to pay vendors, take deposits, and manage your finances, and other basic financial services need to be set up. Being prepared allows you to work with patients and your new staff from day one as opposed to taking time out of your day to set up these services.

The buyer should set up their banking services and processes like:

• Bank accounts
• Credit card processing
• Purchasing credit card
• Treasury management – Taking deposits, ACH, wire, paying vendors, paying employees, etc.

MEET WITH STAFF BEFORE CLOSING
To create a smoother transition, consider a joint meeting with the staff once the purchase agreement is executed. Together with the seller, meet with the current dental team to explain the transition and answer any questions.

UPDATE TEAM POLICIES/HANDBOOK
While assuming ownership, review the previous dentist’s policies for their employees. If large changes or updates need to be made, consider consulting with the current office manager or select team members that have been identified as leaders by the selling dentist to understand how it will be received.

PLAN FOR TRANSITIONING THE PRACTICE
In the final stage of your transition to practice owner, you will want to make decisions about how the practice will change and begin integrating yourself into the practice.

Begin assessing whether you need to hire new staff, update or purchase equipment, make changes to marketing efforts, and more.

Find tips from the ADA for integrating into your new practice.