• Welcome to Dental Lab Network

    Looking to finance a denture lab

    Discussion in 'Removable' started by Holly93, Jun 11, 2018.

    1. Holly93

      Holly93 New Member Full Member

      Joined:
      May 2018
      Messages:
      5
      Likes Received:
      0
      I was hoping for some general advice.

      I am a veteran technician who is looking to buy my long time employer's lab- as he looks to retire.

      The lab is over 30 years old in a gentrifying area. I will probably need to plan to relocate for cheaper rent in the next couple of years. Current lease will be renewed for 24 months in August. I am also concerned about costs of a creating a new lab workspace in a new facility.

      On the equipment, what is the best way to value it for financing? We have Kovo Boil Out, Eclipse Curing System, Handpieces, Trimmers etcetera. Is there anyone able to PM me a list of inventory similar to a 3-4 Person lab as a template and point of reference? Same request for other documents that may help me in the purchasing stage of my venture.

      The business itself has absorbed 2 other dental labs in the past few years. The client base is over 25+ loyal accounts.

      I am looking for specific advice on financing. The SBA process, shopping financing with different banks.

      Any suggestions or feedback would be greatly appreciated!!

      Thanks!
      Holly
       
    2. JMN
      Curious

      JMN Christian Member Staff Member Donator Full Member

      Joined:
      Sep 2012
      Messages:
      7,343
      Likes Received:
      1,618
      Location:
      In a surprisingly solid sea of electrons
      Greetinfs Earthling! Welcome!

      Business plan. First. Absolute immediate must.
      No one you will want to do business with will touch you without it.
      If it's your first time making one, and it seems overwhelming, @sidesh0wb0b has pointed out nxlevel.com with their nearly fill in the blank workbooks to get you there.

      Equipment valuation. Well, there's insurance value, depreciated value, and fair sale price value. Fair sale price is most likely the hill that you need to confront. If the current business entity pays taxes on the business owned property much of your work is done if it is itemized.

      Are you cut out of cloth to be a business person? Being a good and skilled technician is not the only need. @Affinity has pointed out "e-myth" as an essential book.

      The two books will be worth it. Much better to spend $100 now and find issues in advance than get in up to your neck and find the stable rocks upon which you planned on standing are covered in slick river rock muck.

      Is it a business that runs without you present, or will you own your job?
      Are there employees who will stay?
      Is there any debt that will be passed to you?
      Do the 25+offices have relationships with the lab, or with the current owner?

      There are many threads here on buying and selling labs. Try the site search function, and if that doesn't get the depth you need most search engines will respond with results only from here using one or the other of:
      Search terms site:dentallabnetwork.com
      or
      Search terms host:dentallabnetwork.com

      This may help: https://cap-us.com/business/calculating-ebitda-dental-labs/
       
      • Agree Agree x 1
    3. Holly93

      Holly93 New Member Full Member

      Joined:
      May 2018
      Messages:
      5
      Likes Received:
      0

      Thank you so much for your feedback. I may be PM you in the future :)

      Holly
       
    4. Inna-Hurry

      Inna-Hurry Active Member Full Member

      Joined:
      Jul 2012
      Messages:
      149
      Likes Received:
      30
    5. Affinity
      Question

      Affinity Well-Known Member Full Member

      Joined:
      Oct 2009
      Messages:
      4,305
      Likes Received:
      959
      Location:
      7B
      The equipment should be priced at 10c or less on the dollar, of what you can buy it for new.. you can buy used gear cheap. Itemize each and every piece of equipment down to every robinson brush. Add everything up then take another 10% off. The accounts are worth more obviously and that should be where you spend most of your money.

      As far as getting money.. if youre a female I would try a bank last, look at grants or loans for women to start businesses. Unfortunately, I think you may find this the most difficult part, or maybe Im wrong... Ive been in business 12 years and have trouble even getting my credit line increased, and I have good credit. If you want specific help on financing I would for sure talk to an expert or 2 or 3 on womens lending. Specifically on getting money for women business owners, this is a huge up and coming segment and I think there might be a lot of avenues out there. Be careful with sites like lendingtree.com, they will give your info to a bunch of sharks that will bug you to no end.

      Why not have the owner finance it? He can make the interest and be paid through retirement, if the owner should die, the payments would continue to his estate. Make a plan to have it paid for in short order.
       
      Last edited: Jun 12, 2018
      • Like Like x 3
    6. Affinity
      Question

      Affinity Well-Known Member Full Member

      Joined:
      Oct 2009
      Messages:
      4,305
      Likes Received:
      959
      Location:
      7B
    7. Inna-Hurry

      Inna-Hurry Active Member Full Member

      Joined:
      Jul 2012
      Messages:
      149
      Likes Received:
      30
      X2 To Affinity.
      OWNER FINANCE is the only way to assure the owner steps in with accounts if needed... If you fail they get no more...
       
      • Agree Agree x 2
      • Like Like x 1
    8. JMN
      Curious

      JMN Christian Member Staff Member Donator Full Member

      Joined:
      Sep 2012
      Messages:
      7,343
      Likes Received:
      1,618
      Location:
      In a surprisingly solid sea of electrons
      You're welcome to, but you'll be learning only my mistakes and misunderstandings as well as what I think I know.
      Open side will give you the chance to glean the best from many.
       
    9. Affinity
      Question

      Affinity Well-Known Member Full Member

      Joined:
      Oct 2009
      Messages:
      4,305
      Likes Received:
      959
      Location:
      7B
      I will also add, that I wouldnt be as concerned about the location as much as the direction the lab is going. I wouldnt , at this point in human history, spend too much money on an analog lab. This would be about as appropriate as buying a shop that develops film 10 years ago. Its not to say that you arent qualified or that there is no need for a good analog removables lab, in fact there is a HUGE need for a good lab that can embrace and perfect the technology.
      Cut your bottom line by making a great denture faster with CAD/CAM and stay in the area where rent is going up.. it sounds like the place to be. If you dont have a plan to future-proof this lab, or you dont know what that even means, I would stay away from buying it, could be the biggest mistake of your life if you plan on making it your future.
       
      • Like Like x 1
      • Agree Agree x 1
    10. grantoz
      Amused

      grantoz Well-Known Member Full Member

      Joined:
      Oct 2010
      Messages:
      1,215
      Likes Received:
      333
      can i suggest you do a work buying cross over where a certain amount of your wage goes to buying the business over a certain amount of time this has 2-3 advantages, no interest ,you get to know the business inside out and you will get to see if the clients will stay with you or not as its not much point in buying a lab if the clients leave ,you might as well start up cold .
       
      • Creative Creative x 1
    11. Holly93

      Holly93 New Member Full Member

      Joined:
      May 2018
      Messages:
      5
      Likes Received:
      0
      This is certainly my preference. He may want more in the asking price for this arrangement. Anyone out there have experience with this arrangement? If so, please Inbox me what terms anyone has done for this i.e. reverse loan sale etc....
       
    12. Holly93

      Holly93 New Member Full Member

      Joined:
      May 2018
      Messages:
      5
      Likes Received:
      0
      Thank you. Any resources on future proofing a removable lab? Our biggest clients are free clinic type non-profits, and I don't see this sector of the removable industry changing anytime soon.
       
    13. Holly93

      Holly93 New Member Full Member

      Joined:
      May 2018
      Messages:
      5
      Likes Received:
      0

      Thanks for the feedback. I will look into this. The owner is looking to travel and be hands off, so this might work.
       
    14. JMN
      Curious

      JMN Christian Member Staff Member Donator Full Member

      Joined:
      Sep 2012
      Messages:
      7,343
      Likes Received:
      1,618
      Location:
      In a surprisingly solid sea of electrons
      Things outside our control changed and this was no longer possible, but the gent who trained me was willing to let me buy the lab, continuing to receive my paycheck and paying him with the net profit.
       
    15. sidesh0wb0b
      Sleepy

      sidesh0wb0b Well-Known Member Full Member

      Joined:
      May 2012
      Messages:
      3,541
      Likes Received:
      568
      Location:
      Northeastern Tennessee
      i will chime in to agree with JMN, hes spot on!
       
    16. sidesh0wb0b
      Sleepy

      sidesh0wb0b Well-Known Member Full Member

      Joined:
      May 2012
      Messages:
      3,541
      Likes Received:
      568
      Location:
      Northeastern Tennessee
      as a 3-4 person lab i would be VERY wary of purchasing a lab where the owner immediately steps away. the big prob with labs under 6-10ppl is that more than likely the clients are tied to the guy/gal in charge. they leave, so does the client base. no bueno!
      keeping the owner on for a set perios of a year or so will help transition, retain clients, and assure you that the money you invest in the lab wont just dry up before you get fully up to speed.
       
      • Agree Agree x 1
    17. sidesh0wb0b
      Sleepy

      sidesh0wb0b Well-Known Member Full Member

      Joined:
      May 2012
      Messages:
      3,541
      Likes Received:
      568
      Location:
      Northeastern Tennessee
      BINGO!
      with technology changing as it is, and the absolute horrendous resale value of lab equipment, this is super super important!!!
       
    18. Inna-Hurry

      Inna-Hurry Active Member Full Member

      Joined:
      Jul 2012
      Messages:
      149
      Likes Received:
      30
      Good luck!
       
      • Agree Agree x 1

    Share This Page