As a dentist, no one needs to explain you area of expertise to you. You’ve dedicated yourself to providing the best care for your patients that you can; you are the one in the best position to treat and advise them. And while excelling in your field requires a lot of diverse knowledge and skill, it does not require a high level of financial expertise. You may need to be able to balance your books, and maybe run and P&L report, but you can also have a bookkeeper or accountant do that. But, when it comes to more complicated financial transactions, you are not alone among dentists who may quickly get out of their depth.
At the same time, the more complicated financial aspects are exactly what is involved when buying a dental practice or starting up a new practice. Just as your patients deserve quality, compassionate dental care, you deserve financial advice that is just as reliable and accessible as the care you provide to others. So, when you are ready to take the next step in your career—to either buy or start your own practice—you need to find a dental financial advisor who understands the transaction in the same way you understand your specialty.
What to Consider Before Choosing a Lender
First, you need to work with people who understand the unique needs of your business, the dental business: a dental financial advisor (on your side) and a dental lender (on the bank’s side). While your local bank may be a trustworthy and reliable institution, you have no guarantee that they understand the dental business. And if they don’t, it can create trouble.
Lack of knowledge about the dental business can lead to a lender making errors in valuing the practice you are considering buying or starting. There are unique aspects to how dental practices are valued and financed that don’t align with typical business financing. And that leads to the second problem—that the type of loan you will likely need doesn’t fit into a typical loan structure. You need to work with a lender who understands the type of business you are buying, and what kinds of loans work in that field.
Depending on whether you are buying a dental practice, building one from the ground up, or something in between, a Small Business Administration (SBA) loan can be a good option. For one thing, SBA loans are designed for small business like the one you are starting. They also are available for ground-up construction, which many conventional banks won’t offer. Even if you aren’t building something new, but are planning to buy land or a building, you may need a commercial real estate (CRE) loan.
Also, if you have credit problems, you may still qualify for an SBA loan, even if other lenders have turned you down. You may also have an option for an A/B loan (also known as a syndication loan), where a lender provides part of the loan from its own money, and partners with a second bank for the remainder, reducing the risk for each lender. With these loans, typically the A bank is the lead lender, and administrator for the entire loan.
As you can see, this gets tricky very quickly. This is why you need a financial advisor on your side who understands the dental business, and can help you figure out the answers to these five questions, which you need to have sorted out before you start talking to banks:
How much money will you need for your project? This is an important question to get right, because an error on either side will create a real problem down the road. You definitely do not want to take on any more debt than necessary. On the other hand, you also don’t want to run out of money part way through the process. Getting a second loan can be tough. Talk this through carefully with your dental financial advisor, and review your numbers until you are sure they are correct.
What is your plan? Here is where you identify the specifics of what you are doing. That is, what the is money for. Are you buying an existing practice? Does it include ownership of a building, land, or both? How is the practice equipped—will it need to be updated? Are you constructing a building? Are you outfitting a completely new practice? Again, talk this through thoroughly with your financial advisor and review your numbers carefully.
When do you need the funds and when will they be repaid? Whatever your plan is, the seller (whether it’s a dentist, landowner, or contractor) typically has a strong interest in having the deal closed by a fixed date. Make sure you can meet that deadline, or you risk losing the deal. Also, make sure you will be prepared to start repayment on the loan terms on a schedule that will satisfy your lender, without creating a financial hardship for your practice or yourself personally.
Do you have a solid business plan? All new business are started in a spirit of optimism. Optimism, however, doesn’t pay the bills. If you don’t have a good business plan, it’s likely you won’t get a loan. So, for the bank’s sake, and for yours, make sure your documents are complete, accurate, and based on reliable information. Look closely at the projections, and make sure they support the amount of money you are asking for, and your repayment plan.
What is your backup plan? Things rarely go as we plan them. While many dentists buy or start a practice and it all works out fine, it’s unlikely that it worked out just as they had planned. Given the size of the debt you will take on, you will be better off with a contingency plan in case external factors impact your business. How will you repay your loan? Think about this carefully and work it into your business plan. This is definitely a case in which it’s much better to have something and not need it, than need something and not have it.
Having a solid business plan supported by complete and accurate documentation will go a long ways towards getting where you want to be with a lender. It will make their job much easier, smoothing out the process, and allowing them to determine the most advantageous way to fund your request.
Buying a Dental Practice? ddsmatch Southwest can help!
We understand that you are not just exchanging cash for an office and equipment. This business will be where you invest your time and your energy. You are not just investing money, but also your hopes for the future, and your plans for your family and loved ones. You will be building your legacy. We have many practices available for purchase and proven methods for matching the right dentist with the right practice. Give us a call and find out what we can do for you today.
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No doubt about it, transitioning your practice is the culmination of a lifetime of work, the capstone to your career. It’s a bittersweet time. It’s hard to hand what you’ve spent decades building, over to someone who, however qualified and well-intentioned, will not run it the way you did. But, reaping the reward of all of that hard work, and enjoying the proceeds, can be a rewarding time of life. With all of this, you don’t need any unnecessary stress. When it comes to selling a dental practice, there is already quite a bit of stress that is unavoidable.
The good news is, there are also a lot of stress factors that can be avoided. With planning and the right team surrounding you, your transition can be much easier than it would be otherwise. Below, we’ll discuss a couple of factors that can make all the difference between a smooth transition, and a disaster.
Set Your Goals
The first thing is to determine what it is that you want out of your transition. While the sale price is certainly a major factor, it’s hardly the only one. How do you want to sell? An outright sale where you get cash for the full amount and hand over the keys? A buy-in where you work with an associate who purchases the practice over time? Do you want to stay in the practice for a while after the sale, or do you want to hand over the keys and walk away? What kind of buyer are you looking for? One with the deepest pockets, or one who will best take care of your legacy and your staff? These questions need to be considered carefully in order to ensure the practice transition is the one you want, on the terms that matter most to you.
Once you have your team (more on that below), discuss your goals with them. Get feedback from your advisors, your family, other doctors you know who’ve had good (or bad) transitions. This will help greatly to clarify what is best for you and your practice, and will be invaluable to getting you to the goals you set for the transition. Also, your advisors need to know what they are working toward, or they can’t help you get there.
Plan Ahead
If you haven’t guessed already, a practice transition is a complicated process that balances several factors, some of which may be competing, and no two transitions look alike. Because of this, there is no such thing as “too soon” to start thinking about it. A good rule of thumb, however, is five years ahead of any transition. When you think you are less than five years away from selling a dental practice, you should have your practice assessed for transition.
This assessment, by a dental broker or dental business valuator, will give you a sense of the value of your practice. It will also, importantly, give you a better sense of what changes you should consider that can add value to your practice in advance of a sale, and which changes you shouldn’t bother with. Of course, as discussed above, you need to have a sense of how you want to transition your practice before you have it evaluated, as that will factor greatly into what changes you should be thinking about.
When you are at the point where you are ready to move forward with the transition, its essential to pick a firm date to have the transaction completed. There are a lot of details to be worked out—financial, legal, real estate, etc.—and a lot of places where negotiations can get sidetracked. Getting mired in endless discussions about the minutia can be maddening, and create unnecessary stress and frustration, tainting the process. Building in a non-negotiable closing date keeps everyone on track and moving toward the finish line at the right pace. In real estate, this is known as the “time is of the essence” clause, where if a party fails to meet the deadline, the deal is off.
That being said, as mentioned above, every transition is different. There are a lot of factors at play, from the personalities involved, to the location of the practice, and some delay may be inevitable when you put up a dental practice for sale. Texas, for instance, has major city markets and smaller rural areas. Some things happen faster in the big city, where professionals are abundant. But, that also may mean you end up waiting in line with everyone else trying to do the same thing. In a smaller market, you may have fewer options, but sometimes things get done faster where everyone knows everyone else. This is to say, be firm on your closing date, but be flexible if a change in schedule is necessary or possibly even advantageous to you getting what you want out of the deal.
Expert Advice
We’ve mentioned your team a few times already. Who should be on your team? At minimum, you should have a dental attorney, a dental CPA, and a dental broker. These are experts knowledgeable about the particulars of their respective fields specifically as they relate to the dental business in transition.
Why not use your brother-in-law who is a good general attorney? Or a family friend with a great accounting firm? There are two reasons.
First, there are things about the business of dental practice that don’t come into play in other industries. Dental attorneys know what is standard practice for a transition and which parts of your transition may be unique. They’re not going to have to take the time to figure out the nuances of the industry, which reduces your costs, while increasing your protection.
Dental CPAs understand the tax implications of the sale and can advise on how to allocate costs in a way that will be the most advantageous to you, and make sure the money is being handled property. A mistake here could cost you thousands.
A dental broker like ddsmatch Southwest is someone in your corner who has the experience of managing numerous transitions and can walk you through each step of the process. They can also work with the other members of your team, keeping you as involved (or not involved) as much as you want.
And the second reason for a strong team is that this is probably the biggest business dealing you’ve ever been a party to, and will set the stage for the rest of your life. Why take chances? Put experience on your side.
Let ddsmatch Southwest Take the Stress out of Selling a Dental Practice
Too often, the practice transition starts off hopeful, but inexperience becomes an obstruction that can delay or derail the whole process. The ddsmatch Southwest team consists of trusted dental brokers who bring the experience of hundreds of transitions from across the country. Our Trusted Transition Process™ is a proven method to help you meet your goals in putting your dental practice for sale. Texas and New Mexico are our primary markets, but we are happy to refer you to our capable affiliates in other regions.
If you are considering a transition in the next five years, give us a call for a free, no-obligation Practice Transition Assessment. Find out what we can do for you today.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2018/10/3-dental-practice-for-sale-texas-selling-a-dental-practice_HERO.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2018-09-19 05:00:462018-10-05 22:54:37Key Elements to Selling a Dental Practice
The old adage “if it ain’t broke, don’t fix it,” is a gem of pragmatism. If you’ve built a successful dental practice using a certain set of tools and techniques, why change? Change for the sake of change is not a good argument. If, however, you are considering putting your dental office for sale within the next five years, there are some updates that can increase the value of your practice.
While there is likely nothing wrong with the way that you practice, you should consider that potential buyers are going to be younger than you, and more experienced using newer equipment. When they look at your practice, they will see the value of it as a business, but may also see outdated technology that, while it works just fine, may not be what they are experienced using, and may not be what they envision for a 21st-century dental office.
The question is, which investments in office technology upgrades will bring a return, and which won’t. Here we discuss some high-impact, yet low-cost, technological upgrades that can boost the value of your practice. We’re not talking about a full office remodel, just a few changes that can have a real impact on your practice, and on your patients.
If you are considering transitioning your practice within the next five years, it is also worthwhile to have an outside consultant review your office and make recommendations about other possible value-building updates. Here at ddsmatch Southwest, one of our specialties is consulting with doctors about getting ready to transition their practice, and we can look at the particulars of your practice area to help you get ready to put up your dental practice for sale. San Antonio, TX, for instance, is a very different market than Lubbock, and that needs to be considered. What will bring value in Dallas, might not in Midland.
Digital Radiography: Save Time and Build Goodwill with Your Patients
Digital radiography is a great update to an office that is using X-rays. First, it’s faster than an X-ray. Capturing the image is quick and easy, and it’s available on a computer screen right next to your patient in the dental chair. This makes informed consent and patient education simpler. Patients find it impressive, and they will appreciate not being exposed to radiation. This can be a very pleasant surprise the first time a patient encounters it.
If you are using patient software, you’ll want to check compatibility to make sure whatever digital radiography system you choose will integrate with your existing system. And, while there is a learning curve involved, ultimately, you’ll find that digital radiography will save you time. And, this time adds up over months and years.
Electric Handpieces: Greater Consistency and Control without the “Drilling Sound”
While you may have developed an immunity to the high-pitched whine of your drill, you can be sure that your patients have not. Few things send a shiver down the spine of dental patients like the dreaded “drilling sound.” Many of the newer electric handpieces are designed to be as close to silent as they can be. So while the work you are performing remains the same, your patient’s experience during the treatment will be very different, even if primarily from a psychological standpoint.
In a more practical sense, electric handpieces provide consistent levels of torque—which allow you to work more efficiently—and produce smoother tooth preparations. Additionally, they cut more easily through crowns and restorative material, where the bur on air-driven handpieces are more likely to make chattering noises and may produce a less efficient cut. They are also more effective and efficient when dealing with metals, ceramics, and polishing composites.
There are a variety of products available, and it’s worthwhile to consider their benefits and compromises. There are varying degrees of features and versatility, including things like programmable and variable settings, and touch screens. Find a system with a good user interface that you feel comfortable using. Consider which options would most benefit your practice and clientele. Also, if you are consulting with an outside expert on value-building, consider they’ll help you consider where your potential buyers may place greater value.
And, while there will be a bit of a learning curve as with digital radiography, ultimately, it will make your practice more efficient and provide a better experience for your patients. Whether you are considering putting your dental office for sale or not, this upgrade will have nothing but a positive impact on your practice. If you are, for instance, putting your dental practice for sale, San Antonio, TX, patients are the same as anywhere— no one wants to hear that “drilling sound” ever again, if they can avoid it.
Intraoral Camera: Let Your Patients See What You See
An intraoral camera can prove the truth of a couple of other old adages, that “a picture is worth a thousand words” and “talk is cheap.” Intraoral cameras allow your patient to see what you see. Rather than just explaining what the problem is, and why its a problem, you can show them. The impact of seeing a cracked tooth goes a long way towards understanding why it’s such a significant problem, and why the care being recommended is in the patient’s best interest, not simply a dentist’s sales effort.
Intraoral cameras can impact ongoing care as well. By building a photographic record of your patient’s teeth, you can use this to document progress, which the patient may find encouraging. You can also use the technology to do document a problem that is becoming more severe, to educate more reluctant patients. Additionally, your hygienists can use the images to document calculus buildup and, similarly, show the effects of good brushing and flossing, or the lack thereof.
As with the other technological improvements discussed above, the response from patients will be positive. The more they can understand about what you see and why you recommend treatments, the more confidence they’ll have in you, and your recommendations. This increase in confidence can help with patient retention, referrals, and patient compliance with recommended treatments. All of which is good for your bottom line, increasing the value of your practice.
Build Value Before You Put Your Dental Practice for Sale
You may think, “if the buying dentist wants all of these fancy gadgets, let them foot the bill.” And, honestly, depending on your market, that may be the smart move. Generally, however, these are low-cost ways to increase the value of your practice through patient satisfaction and retention, increasing procedures performed and collections, and making your office more attractive to buyers.
But, every practice is different. This is why, if you are considering transitioning in the next five years, now is a good time to call ddsmatch Southwest for a Free Practice Transition Assessment. Let us take the experience of hundreds of dentists from across the country and use it to help you get what you want out of your transition.
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You didn’t go to dental school with a dream of being an employee. But before you are in a strong position to consider buying a dental practice, you may need to put in time as an associate. A generation ago, starting up your own practice right out of dental school, or soon after, was a more common trend. These days, however, the marketplace has changed. More and more, dental graduates are putting in time working with another dentist, whether as a stepping stone to an independent practice, or with an eye to buying-in down the road. The mentorship experience is also valuable, to train under an experienced guide.
This first step in your career can be critical, and the more care you take when deciding where and how to start practicing dentistry, the better off you will be long-term. The question is, how do you know which practice is right for you? Without being able to see the future, there will always be some risk. The good news is, that there are good ways to reduce that risk, and increase your chances of security and success over time.
Here are a few items to consider.
Location, Location, Location
First, think carefully about where you want to practice. You’re young, you’ve worked hard, you’re on the brink of a successful career, and you want to enjoy this stage of your life while setting the stage for your next step. Living in a cool city where you can take advantage of what urban life has to offer may appeal to you. Or, maybe you’d like to live near a coast, or near the mountains.
However, these preferences come at a cost, both literal and figurative. Cities and other popular areas are expensive. Also, they are competitive. You’ll have to work harder to get hired as a dental associate, to get a decent and affordable place to live (as you’re not earning as much yet), and to attract patients. While rural areas and smaller towns may not be your first choice, they have a lot to offer.
For more on this, read our post about the benefits of dentistry in rural areas. You can let your classmates slug it out for a small apartment and a practice with lower profit margins in the big city, while you get ready for buying a dental practice sooner than you probably could otherwise. You can save your earnings for trips to the city, or weekends at the coast where you can enjoy what it offers with less stress.
Job Interviews are Two-Way Streets
The process of locating a dental associateship is not just about you wooing established dentists. You are young, energetic, well-educated with up-to-date training, and well versed in new technology. You will be an asset to any practice you join. Getting a dental associateship is not just about getting an offer. It’s about finding the right fit. You are kicking the tires on the hiring dentist and their practice, as much as they are vetting you.
Here are some things you can do to make sure you have the data you need to make an informed choice about where to start your career.
The More You Know, the Better
Call the practice. Your experience with the front desk personnel can tell you a lot about how the practice operates. Do they answer the phone quickly? Are they courteous? Do they sound professional and organized? Also, call after hours to hear their outgoing message. Do they provide emergency information? Do they provide a professional impression of the practice and reflect a sound business operation? If a practice can’t manage their phones well, what does that say for the rest of their services?
Arrive early. Just like calling the practice, you will be able to see the front office staff in motion: what happens when patients arrive, how they are checked in, how long they wait, the culture of the office, and other things that may be glossed over in a formal interview. The front office operations are essential to a successful and healthy practice, and first hand experience is really the only way to see it for yourself. Are they properly scheduling follow ups for additional work? Are they on top of collecting payments and getting insurance information? And while it may seem awkward to sit in the waiting room, you can easily devise an excuse (being cautious about time, for instance, especially if you’ve come a long way) and the information you gather may be invaluable.
Don’t just talk. It’s not hard for either party in a job interview to impress the other. But talk is cheap. If it’s not offered as part of the interview process, ask for a “working interview” where you can work with the hiring dentist, perhaps acting as an assistant. This will give you the chance to impress with your skill, but, more importantly, you’ll get to see something you never would have otherwise until after you’ve began your associateship; you’ll get to see how the doctor and their practice actually function. This will tell you more than anything they can say in an interview. Also, when it goes well, you’ve given the staff something good to relay to patients as they start scheduling appointments for you.
Remember, the more information you have, the better positioned you are to make a good decision, reducing your risk.
Dental Associateships Prepare You for Buying a Dental Practice
Dental associates perform a variety of functions for an owner dentist. But, for you, this is your path to prepare for your likely career goal of owning your own practice. It’s a time when you have lower risks and less at stake, so you can figure out how to work within a practice setting, learn managerial skills, and understand what your role is—and, importantly, what it is not.
When you get your diploma, you are a doctor. You are not staff. A well-run practice, like any business, is one where the manager (here, the doctor) hires able staff members, provides them with proper training, direction, and support, and then gives them the independence to do their jobs. This model empowers staff and communicates to them that they are trusted. These qualities in a business encourage staff to do their best, build loyalty, and generally the staff will reflect trust back to the doctor. Organizations with these qualities are better suited to weather tough situations.
This is important to remember as a dental associate, because, while you are not the manager, you are a doctor, with a supervisory role over staff. If there is an unfortunate circumstance where you need to align yourself with one side or the other, you are best aligned with the other doctor(s). If there is an issue that you think needs to be addressed, address it in private with the other doctor(s), not in front of staff. This can be difficult—we want to be fair, and we want to be liked. But remember, your job is not to befriend the receptionist, as much to provide the best dental care you can to your patients, and work with the practice members to facilitate that. By always knowing your role and being professional at all times, it will be easier for you to navigate the difficult personnel issues that will inevitably arise sooner or later over the course of your career.
You may be someone who loves to attend to all of the details. You may be someone who is independent and self-sufficient, and takes pride in those qualities. Both are positive qualities, but you will need to learn to let some of that go and stay flexible as a member of a larger team. Think about the times you’ve spent in a well-run doctor’s office. Is the doctor at the front desk? Is the doctor looking at the schedule? Is the doctor asking questions about billing and insurance?
No, because the doctor is doing their job, attending to patients. That’s your focus. Let the staff do their job. After all, that’s why they are there (and getting paid and receiving benefits). If you are looking over their shoulder, they will be self-conscious, feel second-guessed, question your trust in them, and it can create an uncomfortable work environment. If there are problems with staff, they can be addressed in private or in staff meetings, whichever is most appropriate.
Finally, while on the topic of meetings, beware of any practice that does not have staff meetings. Efficient, organized staff meetings are essential to a smoothly-running operation. Regularly scheduled meetings allow for open communication and a forum for questions, clarification, and addressing issues. An organization that only holds a meeting when there is a problem is like trying to build a boat after you’ve already launched the hull. A little extra time at the dock saves a lot of hassle out at sea. These meetings don’t need to be long, but they should be regular and always have a clear agenda to keep all staff members headed in the same direction.
If you pay close attention during your dental associateship, learning both what to do and, just as important, what not to do, you will be much better prepared for buying a dental practice when the time comes.
ddsmatch Southwest Can Help Reduce the Risk
One of the things we do at ddsmatch Southwestis place dental associates. Many dentists are thinking of transitioning their practices, but are not quite ready to go into full retirement. They may want an associate who will buy-in and perhaps, eventually take over and buy them out. They may want an associate who will expand their practice, increasing its value. They may want to stay involved, but reduce their personal workload.
We have a variety of options for new dentists looking to begin their career. Let us help match you with the right practice. Give us a call today.
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You’ve built a successful business as a dentist, and you know it better than anyone. You might ask yourself, “Why do I need a broker to sell my dental practice?” The short answer is, because a practice sale involves a lot more than dentistry. Below is an interview with one satisfied pediatric dentist that ddsmatch Southwest helped successfully transition his practice. Read about his experience, and why he recommends ddsmatch Southwest without hesitation.
Dr. John Johnson Answers the Question: “Why Do I Need a Broker to Sell My Dental Practice?”
When did you sell your practice?
“We sold it last November [2017]. Well, it was actually October, and we closed on it the first of November. Then they asked me to stay on with them for two years in kind of a step-down method where I worked full-time for them for one year and then just part-time the next year.”
I understand that’s pretty typical. Let’s go way back to the beginning, what made you decide it was time to move along?
“Well, I just decided. My wife and I have talked it over for years and had a little health incident that showed up, and we decided it’s time to retire. We’ve been saving for many, many years to do it, so we just said now’s the time.”
About how far in advance did you start really preparing or thinking about it versus when you actually decided it was time?
“We started thinking about it about two years before we actually called Andy [Edmister].”
How did you know to call Andy?
“Through friends, talked to him. One of my friends that’s a dentist here told me I needed to talk to him, and that’s how I did it. Then I met up with him at a convention, dental convention, and we talked it over. I had already talked to a different broker, and it just didn’t work out. Andy, he had all the right answers, so that’s why we went with him.”
What was your experience with them?
“I definitely recommend going with him. It’s very difficult though for a specialist to find other people in a town like where we live, for them to come out into our smaller town. They want to stay in the big cities. But he eventually found out a way for it to work. I’m happy with it now. I’ve worked nine months into the 12-month contract now, so I’m just looking gradually a way of phasing out.”
Why are you glad that you chose ddsmatch Southwest?
“It seemed much more organized, more professional. They have different ideas and told us what to expect during the process, which, to me, an individual broker, I think, wouldn’t have been able to do that. And a lot of the paperwork was done without any problems. We also had recommendations on lawyers to look at the contracts, which I don’t know if we would’ve found without Andy guiding us in that direction.
Do you feel like it saved you any stress?
“Oh, if I tried to sell it on my own, it would’ve been crazy. It would’ve been really hard. This way, we found a qualified company to buy it that I’m happy with. We could’ve literally walked up and locked the doors. We’ve had employees that have worked with us for 20, 30, even 40 years in my group, so that was our biggest concern was how to handle our employees. We made it into the contract where they took them on, and it’s worked out well.”
It sounds like the transition plan has been pretty organized.
“Yeah, pretty. It has stumbling blocks, different philosophies and things, but the company that I’ve gone with has been just more than … they just bend over backwards to help me keep it going.”
You were purchased by a DSO. What are the pros and cons of selling to a DSO over what you think it would’ve been if you’d gone private?
“It’s more organized. They have teams of people that would come in, and that’s a good point, and it’s also a bad point because you’re used to just tackling a problem on your own, and now you have this human relations group come in and tell you how to do stuff. That’s different, but, like I said, my direct manager over the dentists in our area, they just said, ‘You just keep the practice just like you’ve been doing for 25 years.’ That’s the way it’s been going.”
You’re working essentially on their staff now, has that been a positive experience?
“You gotta be real careful with who they go with though. I mean, each DSO’s different. This one is a local DSO that was started here, and they’re just trying to build up the practices around the area, so that makes it a lot easier because they know the population. They know what they expect out of dentists. It’s just a lot better than some huge national company coming in there and buying you out.”
Do you have any other advice to someone who is in the early stages, thinking retirement is on the horizon?
“I had wished that, looking back, that I was able probably to sell to a private individual. This is nothing about the company. The company’s great. They’re going to keep the reins going and all the stuff. But the change from an individual practice to this corporate group, it’s been hard on the people in the office.
“So, I would give it a little more patience, even with Andy. Andy said, ‘Anything you want to do, you want to say no to this, let’s keep going out for a private buyer.’ We had a calendar set up where we wanted to go ahead and start moving out, so that’s why we went with this group. I know there’s buyers out there, but with the cost of school nowadays, it’s very difficult for someone graduating right out of school and a residency and being able to afford to buy a practice. To get them qualified to buy a practice would be very difficult.”
Could you tell me just a little bit about the area you’re in and how being in a smaller market impacts your practice?
[W]e’re a college city, population of about 250,000. [W]e’re in Lubbock. We have Texas Tech here, 40,000 students. The big thing about Lubbock is, we draw from all over eastern New Mexico and from Amarillo to Midland. We call ourselves a hub city, so people come from all over the area. My practice draws from about 120 miles around. People can hop on a Southwest and be in Dallas in 50 minutes. But they don’t see that.
How do you emotionally prepare yourself to let go of a practice that you built by hand? What kind of counsel would you give to somebody who’s really just saying, “How do I let go?”
“The way I look at it is, I look at my old partner when I bought him out. He stayed on with me for about seven years, eight years after, and I just pleaded with him not to retire, but he said, ‘It’s time.’ But I look at the mistakes that I made when I was just coming into the practice. You say some hurtful things. You make some wrong mistakes with staff. You buy the wrong things. You have to think back to then and what it was like and be a little more sympathetic to the new buyer and realize it’s time to start letting them take the reins and you moving out. It makes it a lot easier.”
The vision of what you want to do next is probably driving you. What do you envision you’re going to spend your time doing?
“Yeah, fishing. I’m a pilot, flying. We love cars, so we have a racetrack just a few miles away from the house. Just getting away from under that grind of the practice all the time.
“You gotta plan many, many years in advance though. I mean, we had our financial planner literally in sophomore year . . . and he goes, “I know you can’t start saving now, but be prepared for it when it’s time, and we’ll get you going.” It’s been 29 years now, and he got us prepared. You can’t just walk up the last five years and start saving. You have to be ready for it.”
Is there anything else that you wish you would’ve known or would want a dentist who’s or is getting ready to sell and considering ddsmatch Southwest to know?
“One thing Andy did for us that was really good was he talked to us about having a team on our side, the lawyer and my personal CPA. Andy and Randy all worked together on that, so when they would throw us a contract, if I didn’t have the lawyer, I would’ve been eaten up, the first time we saw it from the DSO. And it was a matter of negotiations over many, many weeks. They throw it at us, we go through, cross this out, cross that out, hand it back. We did that just back and forth for many, many weeks until it finally was acceptable for both of us.
“Without a real, nailed-in contract, I think it would’ve been a lot more difficult. I know to the tenth of a percent what my earnings are. I know what my hours are. Everything’s been written in, so there’s no question about it.”
Was it worth using ddsmatch Southwest ? And if so, why?
“I would definitely do it again. It was really a really good experience. I’m not just saying that for this interview. I wouldn’t have done the interview if I didn’t think that. But Andy just said, ‘Text me anytime of the day or night. Whatever you need, just ask questions.’ He would find an answer for it. We had many, many ups and downs all the way through the whole process. Andy even helped us when we had to have the meeting with the staff and say, ‘Hey, this is coming down the pipe.’ He ran the meeting and answered questions. A lot of people were worried and things. It just made it a lot easier. A lot of the uneasiness, he calmed it down a lot.”
Why would you recommend ddsmatch Southwest?
“I just think they’re highly accurate. They work for you. Very friendly, very knowledgeable, and they’ll take care of you. If you have any issues, you tell them, and they’ll watch out extra carefully, just to make sure those issues are covered before you actually sell. There was no time in the process where I couldn’t have walked up to him and said, ‘Andy, this isn’t right. We’re out of here.’ He would’ve said, ‘Okay, let’s go. Let’s move on.’”
You really felt like ddsmatch Southwest was on your side?
“Oh, yeah.”
Don’t Put Your Dental Practice for Sale by Owner
Dr. Johnson’s experience with ddsmatch Southwest shows the real value of using a broker. With 30-years experience, no one knew his practice and his market better than him. But the market he knew was for selling dental services, not the market for selling dental practices. Instead of just assuming, “I can sell my dental practice on my own,” Dr. Johnson recognized the complexity of brokering a sale (legal, real estate, valuation, finding the right buyer, getting it done on schedule) is far beyond the expertise of even the most experienced doctors.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2018/08/4-dental-practice-for-sale-by-owner-sell-my-dental-practice.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2018-08-29 05:00:402018-10-05 23:51:34Do I Need a Broker to Sell My Dental Practice? One Dentist Explains Why You Do
Be Proactive in Listing Your Dental Office for Sale
Life comes at you fast. Everyone has their share of accidents, illness, and other life-changing events, some more tragic than others. We all share the dream of exiting our careers on our own terms and on our own schedule, but rarely do we consider how easily that can be derailed. If you’ve read our recent post, “ In His Own Words: How ddsmatch Southwest Helped Me in Selling a Dental Practice,” you recognize the need to be ready for whatever life brings your way. While you may very well enjoy a decades-long practice and retire on your own terms, not everyone will be so lucky. But, you can be prepared.
Below are five steps to help you be ready to put your dental office for sale in case of an emergency.
Hope for the Best, Plan for the Worst
No one has bemoaned being too prepared, but too many find out the hard way they were not prepared enough. Even if you never need a contingency plan, you’ll benefit from the peace of mind of knowing that, should the unexpected happen, the people you care about and the practice you’ve built will be taken care of.
Clearly Define Your Retirement Goals
First, you should have a reasonable retirement plan that can be put into place at any time. Wherever you are in your career, it pays to thinking about what you need to get out of a sale of your practice if there were an emergency, so you could be able to live and support your loved ones in the way that you want. This requires a fair amount of advance planning and outside help.
If you don’t have a dental CPA, find one. The same goes for a dental attorney, a practice broker, such as ddsmatch Southwest, and possibly an insurance advisor and a practice consultant. If you don’t know how to find qualified team members, your broker can help. Here at ddsmatch Southwest, we have a large team of strategic partners and can make referrals to experts based on our extensive experience in dental practice transitions.
Once you have your team in place, they can work with you to clearly identify the amount you think you need to net from the sale of your practice. Then have your dental CPA, insurance advisor, and practice consultant take a look at your books and your practice to determine whether its realistic with your current practice. If you need to increase collections or cash flow, your advisors can help guide you well in advance about what investments will bring the most reasonable returns, and which won’t. They can suggest or talk you through other changes that can help you maximize your earnings, investments, and savings, while reducing costs and taxes.
Maximize Value without Losing Value
The old maxim that it takes money to make money is true. If you need to invest in or expand your practice to meet your retirement goals, it’s going to require a capital investment. A common mistake is a dentist investing in growth without adequately protecting their current assets and practice. Also, value-saving measures don’t have to be austere. It can include non-compete agreements with your key staff members and associates. It can include an insurance review. It can include better tax planning to identify areas for savings. It definitely should include a solid plan to protect your personal and practice assets. Your advisors can help you make a plan that won’t overly burden your current practice, savings, or income.
Remember, your goals here are to grow the practice and increase cash flow, while still being prepared for whatever comes your way. There are established methods of doing this in the dental industry: grow your patient base, optimize treatment plan acceptance, improve your patient’s overall experience (customer service). You should regularly review your fee schedule and, when you do, negotiate those with the insurance providers. This simple step can add 5-10% on average to your revenue.
Finally, an important asset to your practice is your staff. Create an office culture that inspires loyalty and, when the time for transition approaches, work with your staff to ensure they stay on through the transition.
Figure Out What Kind of Sale You Want
Basically, this is about whether you want an outright sale of the entire practice to an outside dentist or whether you want to bring on an associate with a buy-in agreement.
An outright sale can be good, as it yields a lump sum payment for the entire value of the practice. It allows for a fast transition and, financially, is less risky than a buy-in. But there are things to watch out for:
Until you close escrow, it’s still your practice. Treat it that way. Don’t go into retirement mode before you close.
Don’t just take the first bidder. Get the buyer that you want to protect what you have built (brokers such as your ddsmatch Southwest team are experienced with finding and matching appropriate buyers).
Don’t try and hide negative news from your buyer. They’ll find it out eventually, and it may be much harder to manage and erode trust after the fact.
Conversely, a lot of information needs to be confidential, make sure you keep that confidence. Your advisors will help you determine which information should be held closely, and which is shared.
Don’t market your practice before its ready. A broker, business valuator (such as Blue & Co., a ddsmatch Southwest strategic partner), or an experienced dental CPA can advise on worthwhile investments that can maximize your practice value before showing it to potential buyers.
If you think retirement is still a long way off, you may want to consider an inside transfer. That would mean something like selling to an associate over a period of years, three to five being fairly typical. A benefit of this is that it allows you to grow the practice in the interim, and perhaps take more time for your own interests. It can also be motivating to associates and encourage them to stay.
Again, however, it will require diligence and careful planning in conjunction with your team of advisors. Your lawyer in particular will be key–you’ll need a solid agreement that clearly details the agreement and its terms: when the transition will be, how the transition will occur, what will be the measure for valuing the practice, how will everyone be paid, and how and under what conditions can the agreement be cancelled.
Contingency Planning for the Practice
The first three steps all apply when you are putting your dental office for sale on your own terms. This step, and the next one, address contingency plans for when you must do it on life’s terms, instead. If you pass away, are injured, or start seeing signs your body is not going to cooperate with your timelines, you need to ensure that your practice continues operating at the highest level possible until a sale can be completed. This will allow you and your family to get the full value of the practice, while protecting your employees and providing continued care for your patients.
Some contingency plans may include a buy-sell agreement. This is an agreement used to reallocate a share of a business if an owner dies or leaves the business and requires that the business share is sold to the company or the remaining members of the business according to a predetermined formula. Life and disability insurance plans also play a role. The proceeds from insurance can be used in a variety of ways, including hiring an associate to work in the practice until a sale is complete.
Your Personal Contingency Plan
If you haven’t done so already, work closely with your dental lawyer and dental CPA to get your affairs in order. If you have already done this, review it with your advisors and make sure its adequate to meet your retirement and contingency goals. It should be adequate to cover your family’s needs, but also to take care of you long-term in case of disability. If you are lacking assets to cover these costs, consider life and disability insurance plans. Your documents should also include things like assigning power of attorney and an advance medical directive.
Start Planning Now: Be Ready to Put Your Dental Office for Sale
A common rule of thumb is that two to five years is the window for planning for transitioning your practice. But, when it comes to being prepared, it’s never too early to start. Here at ddsmatch Southwest, we offer a free Practice Transition Assessment for dentists who are looking at transitioning in the next five years. It’s an easy way to get a professional look at your practice and what changes would be advantageous to maximize value before you put your dental office for sale. Contact us today for your no-obligation assessment.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.png00adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2018-08-22 05:00:062018-10-05 22:54:53Be Prepared for Life’s Surprises
Buying a dental practice is one of the most important decisions a new dentist or dental associate can make in the course of their career. No detail is too small to consider, and there are a lot of factors outside your area of dental expertise that require skilled advisors.
While that may seem daunting, the good news is that people have been doing it successfully for years when they’re backed by the right team. There is a tried and true process, and a clear set of considerations. When you follow the guidance of experienced professionals, it will greatly enhance your chances for success.
In this post, we discuss things to consider as you get ready for the next exciting step in your career.
Start Day One with an Existing Patient Base
An existing patient base means a paying patient base. If you start a new practice, unless you have a loyal base of patients who will follow you from an associateship, you are starting from scratch. You’ll invest a lot in overhead to establish an office and hire staff and then . . . wait for the patients to come. But, when you buy an existing practice, you have patients in the door from day one. Now, that doesn’t mean you’ll keep all of those patients (more on this below) but you will be starting ahead, instead of behind.
This, of course, doesn’t mean you don’t have debt to worry about. The practice will likely have been purchased with a loan, and you’ll need to be able to earn enough to keep the lights on, service your debt, and take something home for yourself. Look at the practice’s cash flow and expenses to see if your expenses will match that, whether you can cut costs, and whether the practice is really sustainable. According to Bank of America, “Lenders usually look for the practice 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.”
Rely On a Team of Experience Professionals to Do what You Can’t
It’s likely you haven’t had experience buying and selling small businesses, dental or otherwise. There can be a lot of complexities in these transactions, depending on how the practice is set up, and there will be a lot of details you won’t even know you should worry about. Without a team of experienced professionals, you could walk right into a common pitfall without even knowing it.
To be successful, you will need these members on your team:
Dental Practice Broker. Like any other business or property, a dental practice can be sold directly from one person to another without any intermediaries. Yet this is much more complicated, however, than buying a residence or automobile. And if you’ve never done it before, you don’t know what you don’t know. Working through a broker, such as ddsmatch Southwest, helps ensure that both parties are aware of all of the essential considerations and that no critical steps are missed.
Dental CPA. Dentistry is a unique business, with accounting issues that don’t apply to other business, from dental equipment valuation to tax strategies. Find a CPA with a large roster of dental clients, they’ll understand the accounting side and be able to advise you better than a general CPA. Your dental practice broker should be able to recommend a reliable CPA. At ddsmatch Southwest, we work with Blue & Co., where they have both dental CPAs and certified business valuators.
Dental attorney. The law is like dentistry, you have generalists and you have specialists. The generalists are good for small, everyday matters, but once you get beyond that, you really need a specialist. When buying a dental practice, you are going to be dealing with a host of legal issues: a sale contract, a lease, non-compete agreements, patient privacy disclosures, incorporating or other business organization set-up, and they may even help with lender requirements. Like the CPA, find an attorney with extensive dental experience, and ask your broker for recommendations. We can refer several affordable experts that we know and trust.
Dental lender. Your local bank may not understand the dental profession and could err in valuing the practice. Also, there are loan terms typical for the purchase of a dental practice that don’t fit into a typical loan. You need to work with a banker who understands they type of business you are buying and what kinds of loans work in that field.
The Term of Your Practice Loan
There is some flexibility here, with most loans ranging from five to 15 years. A longer term can be beneficial, as it will reduce both the impact your debt service has on the practice’s cash flow, and the risk inherent in losing some of the existing patient base (it will happen to some degree). You also may want to consider a flexible repayment option. If you grow your practice or otherwise increase your cash flow, you want to have the option to prepay the loan. If you are concerned about cash flow in the early days, ask about the loan being structured for interest-only payments for the first six months to a year.
Also, as with any loan, consider your interest rate. Often, a low, fixed rate is the best option. While an adjustable rate can have lower payments initially, eventually rates will rise, and so will your payments.
The Advantages of Buying a Dental Practice
As discussed above, an established practice has an established patient base, with a cash flow from day one. Also, the practice has established relationships with the local insurance providers.
The practice has an experienced staff. You don’t need to find, hire, and train a staff. However, remember that the practice was built around the dentist who, depending on the term of your contract, may not be around. Try to arrange to keep the existing staff on for at least a year. This way, you don’t have the hassle and expense of hiring new staff while learning how to run a practice. Also, the patients know the staff, and familiar faces will help with patient retention.
On that point, while the practice has a patient base, despite your best efforts, you will lose some of that base. Your broker can help advise on the best strategy to retain patients, which often starts with a letter explaining the practice transition. Ideally, the selling dentist will write the letter, as that dentist is someone the patients know and trust.
The Disadvantages of Buying an Existing Practice
While there are several advantages, there can be downsides as well. You aren’t just buying a business, you are buying the philosophy upon which that practice has been built. Your approach will certainly be different, and that may cause some strife with staff and patients, who may look for a new dentist.
Changes in workplace practices and policies can be tough for staff, especially when they don’t see why change is necessary or desirable. Also, if the staff members have been around for awhile, their compensation may reflect that, making them seem overpaid. Carefully consider this before making any staffing changes.
Before you finalize the sale, look closely at the office equipment and decor. Consider what updates or upgrades are required and what the cost of those will be. Factor this into the valuation process.
You Are Not Just Buying a List of Patients and an Accounting Ledger
As indicated above, the practice you’re buying was built around a personality and method of organizing that practice. This brings in a lot of things beyond just dentistry. The selling dentist had a vision for their practice and worked to achieve it. Is your vision for your practice compatible with that? If not, it may be a painful transition for you, the staff, and the patients.
When you own a dental practice, you quickly learn that you have to become a jack-of-all-trades. You are the CEO, CFO, and the human resources department. This is all in addition to being both a practicing dentist and the lead clinical director. Be sure you are ready to take on these responsibilities.
Other things to think about include:
What quality of care does the practice offer?
What types of dentistry does the practice offer? Are there services you don’t want to offer? Are there services you think should be offered? How will this impact the practice, staff, and patients?
What is the ratio of restorative or cosmetic services versus hygiene?
What services are referred out? Could they be kept in house?
Is it fee-for-service?
What percentage of the patients are capitation?
What percentage of the patients are PPO?
What Type of Acquisition is Best for You and for the Practice?
The common types of acquisitions include:
100% Buyout. Just as the name indicates, you exchange the full cash price for ownership of the entire practice. The selling dentist may exit immediately after your close the sale, or may elect to stay on for a period to aid in transition or to ease into retirement. These terms are negotiable.
Buy-In. Here you would buy-in for a portion of the practice, typically between 25-50%, and purchase the rest later when the selling dentist opts to transition into retirement. This may be a good option for someone who wants to ease more slowly into the responsibilities of full ownership.
Associate with the Option to Buy. An established dentist may be looking down the road to retirement. The dentist isn’t ready to sell yet, but wants to train a potential buyer in the existing practice, the associateship agreement includes the option to buy. At ddsmatch Southwest, we help place associates, and can provide guidance regarding options to buy.
Practice Valuation
As in most transactions, there is frequently a gap between what the seller thinks their practice is worth and what the buyer thinks it is worth. As the buyer, you should consider that, for the seller, it’s very personal. They have spent their career building their practice and represents a significant investment of time, money, blood, sweat, and tears. Also, depending on the practice, the dentist may have provided care for generations of families and have strong community ties. All of this will impact the value they place on their practice.
Typically, what buyers are willing to pay (market value) is what the practice will sell for. A rule of thumb can be 70-90% of the last year’s revenue. Speciality practices may value for less because they rely on referrals, which are less predictable.
If You’re Planning Changes for the Practice, Take it Slow
Unless you’ve done a buy-in or option to buy, you are well advised to take your time to get to know the practice: the staff, the equipment, the patient flow, the patients themselves, the billing, and all of the processes and policies. Make sure you understand how it all works together (or doesn’t work) before you start making changes. There might be things that seem odd, but become clear once you are on the inside. Making changes too fast could create disruptions that would cause staff and patients to go elsewhere unnecessarily.
Due Diligence
In every business transaction, due diligence is essential. This means that you undertake a comprehensive appraisal of every aspect of the practice. You may want to retain a consultant to evaluate each aspect of the practice, including staffing, systems, and a complete chart audit and patient count. This type of consultant can also advise post-sale on ways to improve the practice according to your career goals without too much disruption.
At ddsmatch Southwest, we specialize in bringing sellers, buyers, and associates together. Using the experience of hundreds of transitions all across the country, we can help you with buying a dental practice and help it go smoother by avoiding common mistakes and finding the right match for your career goals. Contact us today and find out what we can do for you.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2018/08/2-buying-a-dental-practice.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2018-08-15 22:38:332018-10-05 23:03:51Ten Things to Consider when Buying a Dental Practice
Dr. Mitch Conditt, a dentist from Fort Worth, Texas, found himself in an unexpected and unfortunate position: he was having increasing difficulty holding a handpiece, and he knew it wasn’t going to get better. Retirement wasn’t yet on his radar, yet it was clear he needed help with something he’d never done in his 30-plus-year career: selling a dental practice. He didn’t know where to start, but he knew that ddsmatch Southwest did. Here, in his own words, was his experience.
“My Hands Just Were in Real Bad Shape”: How Dr. Conditt Came to Need Guidance in Selling a Dental Practice
“I’m a general dentist in Fort Worth, Texas. I’ve been practicing since 1985, mostly a restorative and cosmetic practice. Been in the same location, everything, since day one. Noticed probably about three or four years ago that I was starting to get some ailments with my body. Had some neck surgery, shoulder surgery, hand surgery, different things like that. I could see the writing on the wall that this wasn’t going to go on for a long, long time before I couldn’t really work much more.
“I started getting into a different field of dentistry, which was sleep and TMJ [temporomandibular joints], where I didn’t really have to hold handpieces, use my hands so much, do things like that. I started getting into that, knowing that this was going to happen, that one day I would need to sell. Actually, it happened a lot faster than I thought. It almost happened overnight. All of a sudden, I couldn’t hardly hold a handpiece. My hands just were in real bad shape.
“Interestingly, I had talked with Andy [Edmister] with ddsmatch [Southwest]probably about a year and a half earlier. Ran into him at Chicago Midwinter Meeting. He just showed me what he was doing. He just took me over to his booth, because I’ve known Andy for a long, long time. He just showed me what was going on, how things were doing, and what he was doing now. He said, ‘If you ever want to have your practice evaluated,’ he goes, ‘We’ll come in and evaluate it to see what’s going on.’ I kept that in mind. Then literally it must have been about the summer, maybe even the early fall of the following year, it hit me and I thought, ‘Oh, this is going to happen really, really quick.’
“I called Andy and I said, ‘I’m ready,’ and he said, ‘Well, thinking, what, another six months?’ I said, ‘No, I’m ready, like, tomorrow.’
“He got out here, he did the evaluation on the practice and all this stuff. I said, ‘Look, if you can just do this for me and let me keep doing what I’m doing, that would be great.’ He said, ‘Don’t even hardly need you,’ and he just did everything he needed to do. It took very little effort from me or my time.
“It’s not maybe two months later, he calls me up and he says, ‘We’ve got someone that I think you might want to talk to.’ I said, ‘Great.’ He said, ‘Let me get everything really kind of figured out before we even pull you in on it, but we think we may have a possibility.’ Weeks later he said, ‘This thing is, I think, going to work.’ Apparently he was working with Dr. Blair, who bought my practice. He was working with her and they were getting their ducks in a row and all that. I didn’t even know if I knew who it was back then, but I know that I didn’t do anything. Basically at one point, not much longer, he said, ‘Well, I think we’ve got a done deal.’
“Then we got a couple of attorneys to wrap it up, and in no time at all it was done. It could not have been easier. I’ve had several of my friends that I’ve talked to that have gone through prospective buyer after buyer after buyer after buyer, and nothing ever panned out, things fell through. It just didn’t work out for some reason, whether it was funding or whatever it was. This thing just went smooth as silk. Literally by March 2, we closed.
“Literally, there was no way it could’ve gone any better.”
Putting Your Dental Practice for Sale Doesn’t Mean You Have to Stop Practicing
Although Dr. Conditt was selling a dental practice, he still wanted to practice, and he “still wanted to do sleep and TMJ.”
“It wasn’t even really in the contract that I had to do that, but . . . [w]hy would I really want to leave here? This is where I’ve been coming for 30-something years, every day. We had a spot where I had been doing sleep and TMJ out of this office. I kept the same little place I was at. It’s worked out great for me. . . . I wouldn’t say I’m looking at full retirement for a good while, but I only practice about eight days a month. . . . That’s not a lot of work really. I would practice more if I wanted, if my body’s fine, and I’m doing something that I could do for ten more years if I wanted to do it.”
Why Having Trusted Advisors is Critically Necessary
When selling your dental practice, you need a professional team with experience in things like dental accounting and valuation, real estate, legal transactions, and more. Because your speciality is dentistry, not in dental brokerage, ddsmatch Southwest can help you find the right team to get you what your practice is worth. ddsmatch Southwest has a strategic partnership with Blue & Co., an accounting and consulting firm with dental CPAs and certified business valuators.
Dr. Conditt explains his experience with Blue & Co. and the other professionals ddsmatch Southwest matched him with and why its essential to follow the advice of experienced professionals:
“The terms of the deal were exactly what we asked for. [Blue & Co.] came in and did all the work. . . . As far as I can remember, and I’m almost positive, we didn’t change one single thing in the contract. It went just exactly as Andy and them put it out there. That’s how it went.”
Dr. Conditt’s Tips to Dentists Looking to Retire in a Few Years
Get an Evaluation
“Obviously I’d ask Andy to make sure on something like this, but I’m thinking if you’re even close to a year, maybe even two years out, why not go ahead and get your practice evaluated, have Blue [& Co.] come in and take a look at it and see what’s going on for one, there may be things that they find that they say, ‘You know, if you change this or if you did this a little better, we could get more money for your practice down the line.’ Andy told me that. He said, ‘Probably with your practice it’s not,’ because mine was basically a cosmetic practice, so it’s a little bit different, but he said a lot of times there are things that they can tell you to do that will increase the value of your practice. That would be one.”
Start Early
“I don’t know if they would suggest that to be two years out or three years out. [NOTE: ddsmatch Southwest recommends dentists begin the planning process 3-5 years ahead of retirement.] The fee to have that done was not very much. I don’t know if they still do it, but that fee was refunded back to me once the practice sold. That was a no-brainer.”
Hope for the Best, Plan for the Worst
“The second reason is you don’t know when anything’s going to happen. You don’t know when you’re going to need to sell. From everything I’ve heard, it takes a long time to get everything in order. Particularly if something happens, it’s a little bit of an emergency to go in and try to get everything you need to get done in a short period of time. Then you go through a lot of different people to see who’s going to work best, what’s going to happen and what have you. When you’re going through all of that, that can become a little bit of a hassle. If you get that done and get completely prepared, I think everybody’s going to feel a whole lot better about everything.”
Keep the Sale Under Your Hat
“The other thing, I don’t think everybody does this, at least the friends I’ve talked to didn’t do that. One of the things that they do, or at least Andy did, maybe this is the philosophy of ddsmatch [Southwest], and I never heard of this before, was don’t tell anybody you’re going to sell. Don’t tell anybody you’re thinking about it. It was all one of those things where if everybody knows and your practice has been on the market for a year, I guess it’s like if your house has been on sale for a year: ‘Nobody’s bought it? Something’s wrong. It’s either priced too high, there’s something wrong with the house.’ Everybody gets to thinking, ‘Well, how come nobody’s bought it in a year?’ If no one even knows your practice is for sale, and all of a sudden they bring someone to the table, they have no idea what’s going on.
“I found out with a good friend of mine in Tennessee, that’s exactly what happened to him. He had just whoever come out and evaluate it. The evaluation was fine. It’s almost like he put it up in the paper that the practice was for sale. He didn’t do that, but it was certainly not kept a secret. He didn’t sell for probably two years, and that’s exactly why, because everybody thought, ‘Now, wait a minute. This guy hasn’t sold his practice in a year. Something must be wrong.’ There wasn’t anything wrong with it. It was a great practice. I don’t know if that’s [ddsmatch Southwest]’s philosophy or if that’s Andy’s philosophy, but that was tremendous to do that right there. Just keep it silent, let Andy do all the work, and it worked out beautifully.”
Dr. Conditt’s Advice to Anyone Considering Selling a Dental Practice: ”Call ddsmatch”
“Without a doubt, I would have them call and talk to ddsmatch [Southwest] and just ask them, ‘What do I need to do? Should we get evaluated now?’ I’m sure they’ll ask you, ‘How long out do you think you are?’ I would literally tell anyone, call those guys up. Follow exactly what they say to do, and just let them do it. There was zero effort on my part to do this.
“ddsmatch [Southwest]. . . were very honest. They were very forthright in everything they said. There was no hiding anything. They let you know exactly how the process is going to work, what’s going on. Blue [& Co.] . . . has a great reputation. They did everything very well. What I noticed afterwards is that once some of the banks and the lenders saw who was evaluating the practice, there was no discussion on what the evaluation. Was it really worth that? Was it not worth that? I guess they had the reputation that you just take their word for what it’s worth. That was great.
“Andy actually hooked me and Dr. Blair, who bought my practice, hooked us both up with attorneys. Even I asked her about her attorney. Both our attorneys were fantastic. They didn’t drag anything on. They were not expensive. They said everything exactly like it ought to be. They actually knew each other. They had done this before, so they knew how to get this handled. That was incredibly smooth. Andy was a dream to work with because literally, like I said, I did nothing. When he had to get some numbers, he just basically said, ‘If you don’t mind letting me go into your computer, I’ll do it while you’re working. I’ll just get the numbers, and you can go on.’ They’re asking us to pull numbers off of our software system, and it’s like, ‘We don’t know how to do that. We have no idea how to get these numbers you’re asking.’ They just go in it and do it themselves. Those things right there are really, really invaluable for us when, particularly, we don’t know how to get that stuff, and we don’t want to jack with that. We don’t know, are the attorneys good? Are the evaluations going to be good? Are the people behind the evaluations honest and everything?
“Everything was completely on the up and up and even above that.”
“Call ddsmatch [Southwest] and just say, ‘Look, hold my hand. Walk me through this thing. Tell me what to do.’ It’s the easiest thing you can do.”
https://www.ddsmatchsouthwest.com/wp-content/uploads/2018/08/1-Dental-practice-for-sale-selling-a-dental-practice.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2018-08-08 05:00:192018-10-05 22:53:52In His Own Words: "Call DDSMatch Southwest"
It’s a common idea: put in your time at dental school and in a residency, then settle into a practice in the big city where you can really enjoy the proceeds from your hard work. Urban living has a lot to recommend it–the cultural opportunities like symphonies and art museums; great restaurants and an exciting nightlife; trendy shopping boutiques and hip loft apartments. But there can be some disadvantages, especially when compared with dentistry in rural areas.
Urban living, for all of its excitement, can be taxing both psychologically and financially. Cities are crowded. The crowds and lack of open or green space can make some feel claustrophobic. The competition for living and work space drives up costs. And when it comes to a dental practice, there is a lot of competition for patients. If other dentists are open early and late on weekdays, or take patients on the weekend, then you might feel pressure to do the same.
Why it’s Smart to Consider Buying a Dental Practice in a Rural Area
On the one hand, as said above, city living can be exciting, but it’s not called the rat race for nothing. If you asked your dental school classmates, probably 9 out of 10 would say that they wanted to practice within 30 minutes of a major city. By contrast, rural dentistry doesn’t have nearly that level of competition. The rural areas are often underserved, which means you have a ready patient base without much, if any, competition. This translates into several benefits that can greatly improve quality of life.
Less stress and more free time. Patients in rural areas tend to not miss appointments. There is less pressure to participate in discount insurance programs. If a patient declines a treatment option because of a financial concern, you can offer a third-party financing option. Also, there is less expectation of evening and weekend hours, meaning you can be home for dinner every night and your weekends are your own.
High profit margins. Real estate tends to be cheaper, which lowers both your living costs and operating costs. Wages are lower. Overhead overall tends to average out at 50% in rural areas, while pricing is consistent with urban areas. Do the math.
Respect in the community. The town dentist is a valued member of the community performing an essential function. The community is more likely to treat you as a person occupying a position of respect.
Student loan repayment. New dentists who practice in underserved areas may qualify for student loan repayment programs that reduce the amount you have to repay. It may require some participation in Medicaid programs. More information can be found through the ADA.
You may be concerned whether you can retain existing patients if you are buying a practice in a rural area. However, many small towns only have one dentist. This means the practice will have a built-in patient base, without any local competition. In rural areas, patients are less likely to drive 45 minutes out of their way to see a dentist in the big city.
Plus, living in a rural area doesn’t mean you don’t get to enjoy what a larger city can offer. What you save in overhead and living expenses can be turned into weekend getaways and vacations. A rural dentist can enjoy the quiet life while indulging in city life when they choose.
Associates Should Also Consider Dentistry in Rural Areas
If you’re not yet ready to buy a practice but are more interested in an associateship, dentistry in rural areas can be a great option. Many of the benefits listed above also apply to associates. Lower stress levels and shorter hours means more time for you to enjoy your hobbies and free time. If your compensation is based on collections, in a rural area your compensation can go further.
When you begin your career in a rural area, especially if you have an eye toward eventually buying into or acquiring the practice, you can create lifelong community ties. Rural areas and smaller towns have less anonymity, meaning that the services you provide are not simply transactional, but can be more meaningful on a personal level. You’ll treat the school teachers, the civic leaders, your children’s friends and parents. A rural dentist can be embedded into the fabric of their community in a way that’s not possible in the city. It may ultimately become one of the most personally fulfilling aspects of your professional life.
Selling a Rural Dentistry Practice
If you are one of the dentists who practice dentistry in rural areas or small towns and are thinking about transitioning your practice for retirement, you have a lot to offer potential buyers. But also take time to consider updating your office equipment, furniture, and decor. Has your practice gone digital or is it still paper and filing cabinets? Younger dentists looking to buy an established practice often want the latest technology and service options already implemented into the running of the business. No doubt your office runs well, but be aware that expectations have changed about how offices operate and information is managed.
At ddsmatch Southwest, we offer a free Practice Transition Assessment where we can advise you how to get the most value out of your practice. We’ll look closely at your practice, being mindful of the community you serve, and offer advice based on the hundreds of transitions we’ve facilitated across the country. We want to help you get the most for your practice and find the buyer best suited to match.
Five Financing Questions to Answer Before Buying a Dental Practice
/0 Comments/in Buying a Dental Practice /by adminAs a dentist, no one needs to explain you area of expertise to you. You’ve dedicated yourself to providing the best care for your patients that you can; you are the one in the best position to treat and advise them. And while excelling in your field requires a lot of diverse knowledge and skill, it does not require a high level of financial expertise. You may need to be able to balance your books, and maybe run and P&L report, but you can also have a bookkeeper or accountant do that. But, when it comes to more complicated financial transactions, you are not alone among dentists who may quickly get out of their depth.
At the same time, the more complicated financial aspects are exactly what is involved when buying a dental practice or starting up a new practice. Just as your patients deserve quality, compassionate dental care, you deserve financial advice that is just as reliable and accessible as the care you provide to others. So, when you are ready to take the next step in your career—to either buy or start your own practice—you need to find a dental financial advisor who understands the transaction in the same way you understand your specialty.
What to Consider Before Choosing a Lender
First, you need to work with people who understand the unique needs of your business, the dental business: a dental financial advisor (on your side) and a dental lender (on the bank’s side). While your local bank may be a trustworthy and reliable institution, you have no guarantee that they understand the dental business. And if they don’t, it can create trouble.
Lack of knowledge about the dental business can lead to a lender making errors in valuing the practice you are considering buying or starting. There are unique aspects to how dental practices are valued and financed that don’t align with typical business financing. And that leads to the second problem—that the type of loan you will likely need doesn’t fit into a typical loan structure. You need to work with a lender who understands the type of business you are buying, and what kinds of loans work in that field.
Depending on whether you are buying a dental practice, building one from the ground up, or something in between, a Small Business Administration (SBA) loan can be a good option. For one thing, SBA loans are designed for small business like the one you are starting. They also are available for ground-up construction, which many conventional banks won’t offer. Even if you aren’t building something new, but are planning to buy land or a building, you may need a commercial real estate (CRE) loan.
Also, if you have credit problems, you may still qualify for an SBA loan, even if other lenders have turned you down. You may also have an option for an A/B loan (also known as a syndication loan), where a lender provides part of the loan from its own money, and partners with a second bank for the remainder, reducing the risk for each lender. With these loans, typically the A bank is the lead lender, and administrator for the entire loan.
As you can see, this gets tricky very quickly. This is why you need a financial advisor on your side who understands the dental business, and can help you figure out the answers to these five questions, which you need to have sorted out before you start talking to banks:
Having a solid business plan supported by complete and accurate documentation will go a long ways towards getting where you want to be with a lender. It will make their job much easier, smoothing out the process, and allowing them to determine the most advantageous way to fund your request.
Buying a Dental Practice? ddsmatch Southwest can help!
At ddsmatch Southwest, we are in the business of matching those who are selling a dental practice with those who are buying a dental practice. You can read more about buying dental practices in our article “Ten Things to Consider when Buying a Dental Practice.”
We understand that you are not just exchanging cash for an office and equipment. This business will be where you invest your time and your energy. You are not just investing money, but also your hopes for the future, and your plans for your family and loved ones. You will be building your legacy. We have many practices available for purchase and proven methods for matching the right dentist with the right practice. Give us a call and find out what we can do for you today.
Key Elements to Selling a Dental Practice
/in Selling a Dental Practice /by adminNo doubt about it, transitioning your practice is the culmination of a lifetime of work, the capstone to your career. It’s a bittersweet time. It’s hard to hand what you’ve spent decades building, over to someone who, however qualified and well-intentioned, will not run it the way you did. But, reaping the reward of all of that hard work, and enjoying the proceeds, can be a rewarding time of life. With all of this, you don’t need any unnecessary stress. When it comes to selling a dental practice, there is already quite a bit of stress that is unavoidable.
The good news is, there are also a lot of stress factors that can be avoided. With planning and the right team surrounding you, your transition can be much easier than it would be otherwise. Below, we’ll discuss a couple of factors that can make all the difference between a smooth transition, and a disaster.
Set Your Goals
The first thing is to determine what it is that you want out of your transition. While the sale price is certainly a major factor, it’s hardly the only one. How do you want to sell? An outright sale where you get cash for the full amount and hand over the keys? A buy-in where you work with an associate who purchases the practice over time? Do you want to stay in the practice for a while after the sale, or do you want to hand over the keys and walk away? What kind of buyer are you looking for? One with the deepest pockets, or one who will best take care of your legacy and your staff? These questions need to be considered carefully in order to ensure the practice transition is the one you want, on the terms that matter most to you.
Once you have your team (more on that below), discuss your goals with them. Get feedback from your advisors, your family, other doctors you know who’ve had good (or bad) transitions. This will help greatly to clarify what is best for you and your practice, and will be invaluable to getting you to the goals you set for the transition. Also, your advisors need to know what they are working toward, or they can’t help you get there.
Plan Ahead
If you haven’t guessed already, a practice transition is a complicated process that balances several factors, some of which may be competing, and no two transitions look alike. Because of this, there is no such thing as “too soon” to start thinking about it. A good rule of thumb, however, is five years ahead of any transition. When you think you are less than five years away from selling a dental practice, you should have your practice assessed for transition.
This assessment, by a dental broker or dental business valuator, will give you a sense of the value of your practice. It will also, importantly, give you a better sense of what changes you should consider that can add value to your practice in advance of a sale, and which changes you shouldn’t bother with. Of course, as discussed above, you need to have a sense of how you want to transition your practice before you have it evaluated, as that will factor greatly into what changes you should be thinking about.
When you are at the point where you are ready to move forward with the transition, its essential to pick a firm date to have the transaction completed. There are a lot of details to be worked out—financial, legal, real estate, etc.—and a lot of places where negotiations can get sidetracked. Getting mired in endless discussions about the minutia can be maddening, and create unnecessary stress and frustration, tainting the process. Building in a non-negotiable closing date keeps everyone on track and moving toward the finish line at the right pace. In real estate, this is known as the “time is of the essence” clause, where if a party fails to meet the deadline, the deal is off.
That being said, as mentioned above, every transition is different. There are a lot of factors at play, from the personalities involved, to the location of the practice, and some delay may be inevitable when you put up a dental practice for sale. Texas, for instance, has major city markets and smaller rural areas. Some things happen faster in the big city, where professionals are abundant. But, that also may mean you end up waiting in line with everyone else trying to do the same thing. In a smaller market, you may have fewer options, but sometimes things get done faster where everyone knows everyone else. This is to say, be firm on your closing date, but be flexible if a change in schedule is necessary or possibly even advantageous to you getting what you want out of the deal.
Expert Advice
We’ve mentioned your team a few times already. Who should be on your team? At minimum, you should have a dental attorney, a dental CPA, and a dental broker. These are experts knowledgeable about the particulars of their respective fields specifically as they relate to the dental business in transition.
Why not use your brother-in-law who is a good general attorney? Or a family friend with a great accounting firm? There are two reasons.
First, there are things about the business of dental practice that don’t come into play in other industries. Dental attorneys know what is standard practice for a transition and which parts of your transition may be unique. They’re not going to have to take the time to figure out the nuances of the industry, which reduces your costs, while increasing your protection.
Dental CPAs understand the tax implications of the sale and can advise on how to allocate costs in a way that will be the most advantageous to you, and make sure the money is being handled property. A mistake here could cost you thousands.
A dental broker like ddsmatch Southwest is someone in your corner who has the experience of managing numerous transitions and can walk you through each step of the process. They can also work with the other members of your team, keeping you as involved (or not involved) as much as you want.
And the second reason for a strong team is that this is probably the biggest business dealing you’ve ever been a party to, and will set the stage for the rest of your life. Why take chances? Put experience on your side.
Let ddsmatch Southwest Take the Stress out of Selling a Dental Practice
Too often, the practice transition starts off hopeful, but inexperience becomes an obstruction that can delay or derail the whole process. The ddsmatch Southwest team consists of trusted dental brokers who bring the experience of hundreds of transitions from across the country. Our Trusted Transition Process™ is a proven method to help you meet your goals in putting your dental practice for sale. Texas and New Mexico are our primary markets, but we are happy to refer you to our capable affiliates in other regions.
If you are considering a transition in the next five years, give us a call for a free, no-obligation Practice Transition Assessment. Find out what we can do for you today.
Low-Cost Tech Upgrades Increase Value for Your Dental Office for Sale
/in Selling a Dental Practice /by adminThe old adage “if it ain’t broke, don’t fix it,” is a gem of pragmatism. If you’ve built a successful dental practice using a certain set of tools and techniques, why change? Change for the sake of change is not a good argument. If, however, you are considering putting your dental office for sale within the next five years, there are some updates that can increase the value of your practice.
While there is likely nothing wrong with the way that you practice, you should consider that potential buyers are going to be younger than you, and more experienced using newer equipment. When they look at your practice, they will see the value of it as a business, but may also see outdated technology that, while it works just fine, may not be what they are experienced using, and may not be what they envision for a 21st-century dental office.
The question is, which investments in office technology upgrades will bring a return, and which won’t. Here we discuss some high-impact, yet low-cost, technological upgrades that can boost the value of your practice. We’re not talking about a full office remodel, just a few changes that can have a real impact on your practice, and on your patients.
If you are considering transitioning your practice within the next five years, it is also worthwhile to have an outside consultant review your office and make recommendations about other possible value-building updates. Here at ddsmatch Southwest, one of our specialties is consulting with doctors about getting ready to transition their practice, and we can look at the particulars of your practice area to help you get ready to put up your dental practice for sale. San Antonio, TX, for instance, is a very different market than Lubbock, and that needs to be considered. What will bring value in Dallas, might not in Midland.
Digital Radiography: Save Time and Build Goodwill with Your Patients
Digital radiography is a great update to an office that is using X-rays. First, it’s faster than an X-ray. Capturing the image is quick and easy, and it’s available on a computer screen right next to your patient in the dental chair. This makes informed consent and patient education simpler. Patients find it impressive, and they will appreciate not being exposed to radiation. This can be a very pleasant surprise the first time a patient encounters it.
If you are using patient software, you’ll want to check compatibility to make sure whatever digital radiography system you choose will integrate with your existing system. And, while there is a learning curve involved, ultimately, you’ll find that digital radiography will save you time. And, this time adds up over months and years.
Electric Handpieces: Greater Consistency and Control without the “Drilling Sound”
While you may have developed an immunity to the high-pitched whine of your drill, you can be sure that your patients have not. Few things send a shiver down the spine of dental patients like the dreaded “drilling sound.” Many of the newer electric handpieces are designed to be as close to silent as they can be. So while the work you are performing remains the same, your patient’s experience during the treatment will be very different, even if primarily from a psychological standpoint.
In a more practical sense, electric handpieces provide consistent levels of torque—which allow you to work more efficiently—and produce smoother tooth preparations. Additionally, they cut more easily through crowns and restorative material, where the bur on air-driven handpieces are more likely to make chattering noises and may produce a less efficient cut. They are also more effective and efficient when dealing with metals, ceramics, and polishing composites.
There are a variety of products available, and it’s worthwhile to consider their benefits and compromises. There are varying degrees of features and versatility, including things like programmable and variable settings, and touch screens. Find a system with a good user interface that you feel comfortable using. Consider which options would most benefit your practice and clientele. Also, if you are consulting with an outside expert on value-building, consider they’ll help you consider where your potential buyers may place greater value.
And, while there will be a bit of a learning curve as with digital radiography, ultimately, it will make your practice more efficient and provide a better experience for your patients. Whether you are considering putting your dental office for sale or not, this upgrade will have nothing but a positive impact on your practice. If you are, for instance, putting your dental practice for sale, San Antonio, TX, patients are the same as anywhere— no one wants to hear that “drilling sound” ever again, if they can avoid it.
Intraoral Camera: Let Your Patients See What You See
An intraoral camera can prove the truth of a couple of other old adages, that “a picture is worth a thousand words” and “talk is cheap.” Intraoral cameras allow your patient to see what you see. Rather than just explaining what the problem is, and why its a problem, you can show them. The impact of seeing a cracked tooth goes a long way towards understanding why it’s such a significant problem, and why the care being recommended is in the patient’s best interest, not simply a dentist’s sales effort.
Intraoral cameras can impact ongoing care as well. By building a photographic record of your patient’s teeth, you can use this to document progress, which the patient may find encouraging. You can also use the technology to do document a problem that is becoming more severe, to educate more reluctant patients. Additionally, your hygienists can use the images to document calculus buildup and, similarly, show the effects of good brushing and flossing, or the lack thereof.
As with the other technological improvements discussed above, the response from patients will be positive. The more they can understand about what you see and why you recommend treatments, the more confidence they’ll have in you, and your recommendations. This increase in confidence can help with patient retention, referrals, and patient compliance with recommended treatments. All of which is good for your bottom line, increasing the value of your practice.
Build Value Before You Put Your Dental Practice for Sale
You may think, “if the buying dentist wants all of these fancy gadgets, let them foot the bill.” And, honestly, depending on your market, that may be the smart move. Generally, however, these are low-cost ways to increase the value of your practice through patient satisfaction and retention, increasing procedures performed and collections, and making your office more attractive to buyers.
But, every practice is different. This is why, if you are considering transitioning in the next five years, now is a good time to call ddsmatch Southwest for a Free Practice Transition Assessment. Let us take the experience of hundreds of dentists from across the country and use it to help you get what you want out of your transition.
Call to schedule your no-obligation assessment today.
Dental Associateships: Reduce Your Risk Before Buying a Dental Practice
/in Buying a Dental Practice, Dental Associateships /by adminYou didn’t go to dental school with a dream of being an employee. But before you are in a strong position to consider buying a dental practice, you may need to put in time as an associate. A generation ago, starting up your own practice right out of dental school, or soon after, was a more common trend. These days, however, the marketplace has changed. More and more, dental graduates are putting in time working with another dentist, whether as a stepping stone to an independent practice, or with an eye to buying-in down the road. The mentorship experience is also valuable, to train under an experienced guide.
This first step in your career can be critical, and the more care you take when deciding where and how to start practicing dentistry, the better off you will be long-term. The question is, how do you know which practice is right for you? Without being able to see the future, there will always be some risk. The good news is, that there are good ways to reduce that risk, and increase your chances of security and success over time.
Here are a few items to consider.
Location, Location, Location
First, think carefully about where you want to practice. You’re young, you’ve worked hard, you’re on the brink of a successful career, and you want to enjoy this stage of your life while setting the stage for your next step. Living in a cool city where you can take advantage of what urban life has to offer may appeal to you. Or, maybe you’d like to live near a coast, or near the mountains.
However, these preferences come at a cost, both literal and figurative. Cities and other popular areas are expensive. Also, they are competitive. You’ll have to work harder to get hired as a dental associate, to get a decent and affordable place to live (as you’re not earning as much yet), and to attract patients. While rural areas and smaller towns may not be your first choice, they have a lot to offer.
For more on this, read our post about the benefits of dentistry in rural areas. You can let your classmates slug it out for a small apartment and a practice with lower profit margins in the big city, while you get ready for buying a dental practice sooner than you probably could otherwise. You can save your earnings for trips to the city, or weekends at the coast where you can enjoy what it offers with less stress.
Job Interviews are Two-Way Streets
The process of locating a dental associateship is not just about you wooing established dentists. You are young, energetic, well-educated with up-to-date training, and well versed in new technology. You will be an asset to any practice you join. Getting a dental associateship is not just about getting an offer. It’s about finding the right fit. You are kicking the tires on the hiring dentist and their practice, as much as they are vetting you.
Here are some things you can do to make sure you have the data you need to make an informed choice about where to start your career.
The More You Know, the Better
Remember, the more information you have, the better positioned you are to make a good decision, reducing your risk.
Dental Associateships Prepare You for Buying a Dental Practice
Dental associates perform a variety of functions for an owner dentist. But, for you, this is your path to prepare for your likely career goal of owning your own practice. It’s a time when you have lower risks and less at stake, so you can figure out how to work within a practice setting, learn managerial skills, and understand what your role is—and, importantly, what it is not.
When you get your diploma, you are a doctor. You are not staff. A well-run practice, like any business, is one where the manager (here, the doctor) hires able staff members, provides them with proper training, direction, and support, and then gives them the independence to do their jobs. This model empowers staff and communicates to them that they are trusted. These qualities in a business encourage staff to do their best, build loyalty, and generally the staff will reflect trust back to the doctor. Organizations with these qualities are better suited to weather tough situations.
This is important to remember as a dental associate, because, while you are not the manager, you are a doctor, with a supervisory role over staff. If there is an unfortunate circumstance where you need to align yourself with one side or the other, you are best aligned with the other doctor(s). If there is an issue that you think needs to be addressed, address it in private with the other doctor(s), not in front of staff. This can be difficult—we want to be fair, and we want to be liked. But remember, your job is not to befriend the receptionist, as much to provide the best dental care you can to your patients, and work with the practice members to facilitate that. By always knowing your role and being professional at all times, it will be easier for you to navigate the difficult personnel issues that will inevitably arise sooner or later over the course of your career.
You may be someone who loves to attend to all of the details. You may be someone who is independent and self-sufficient, and takes pride in those qualities. Both are positive qualities, but you will need to learn to let some of that go and stay flexible as a member of a larger team. Think about the times you’ve spent in a well-run doctor’s office. Is the doctor at the front desk? Is the doctor looking at the schedule? Is the doctor asking questions about billing and insurance?
No, because the doctor is doing their job, attending to patients. That’s your focus. Let the staff do their job. After all, that’s why they are there (and getting paid and receiving benefits). If you are looking over their shoulder, they will be self-conscious, feel second-guessed, question your trust in them, and it can create an uncomfortable work environment. If there are problems with staff, they can be addressed in private or in staff meetings, whichever is most appropriate.
Finally, while on the topic of meetings, beware of any practice that does not have staff meetings. Efficient, organized staff meetings are essential to a smoothly-running operation. Regularly scheduled meetings allow for open communication and a forum for questions, clarification, and addressing issues. An organization that only holds a meeting when there is a problem is like trying to build a boat after you’ve already launched the hull. A little extra time at the dock saves a lot of hassle out at sea. These meetings don’t need to be long, but they should be regular and always have a clear agenda to keep all staff members headed in the same direction.
If you pay close attention during your dental associateship, learning both what to do and, just as important, what not to do, you will be much better prepared for buying a dental practice when the time comes.
ddsmatch Southwest Can Help Reduce the Risk
One of the things we do at ddsmatch Southwest is place dental associates. Many dentists are thinking of transitioning their practices, but are not quite ready to go into full retirement. They may want an associate who will buy-in and perhaps, eventually take over and buy them out. They may want an associate who will expand their practice, increasing its value. They may want to stay involved, but reduce their personal workload.
We have a variety of options for new dentists looking to begin their career. Let us help match you with the right practice. Give us a call today.
Do I Need a Broker to Sell My Dental Practice? One Dentist Explains Why You Do
/in Selling a Dental Practice /by adminYou’ve built a successful business as a dentist, and you know it better than anyone. You might ask yourself, “Why do I need a broker to sell my dental practice?” The short answer is, because a practice sale involves a lot more than dentistry. Below is an interview with one satisfied pediatric dentist that ddsmatch Southwest helped successfully transition his practice. Read about his experience, and why he recommends ddsmatch Southwest without hesitation.
Dr. John Johnson Answers the Question: “Why Do I Need a Broker to Sell My Dental Practice?”
When did you sell your practice?
“We sold it last November [2017]. Well, it was actually October, and we closed on it the first of November. Then they asked me to stay on with them for two years in kind of a step-down method where I worked full-time for them for one year and then just part-time the next year.”
I understand that’s pretty typical. Let’s go way back to the beginning, what made you decide it was time to move along?
“Well, I just decided. My wife and I have talked it over for years and had a little health incident that showed up, and we decided it’s time to retire. We’ve been saving for many, many years to do it, so we just said now’s the time.”
About how far in advance did you start really preparing or thinking about it versus when you actually decided it was time?
“We started thinking about it about two years before we actually called Andy [Edmister].”
How did you know to call Andy?
“Through friends, talked to him. One of my friends that’s a dentist here told me I needed to talk to him, and that’s how I did it. Then I met up with him at a convention, dental convention, and we talked it over. I had already talked to a different broker, and it just didn’t work out. Andy, he had all the right answers, so that’s why we went with him.”
What was your experience with them?
“I definitely recommend going with him. It’s very difficult though for a specialist to find other people in a town like where we live, for them to come out into our smaller town. They want to stay in the big cities. But he eventually found out a way for it to work. I’m happy with it now. I’ve worked nine months into the 12-month contract now, so I’m just looking gradually a way of phasing out.”
Why are you glad that you chose ddsmatch Southwest?
“It seemed much more organized, more professional. They have different ideas and told us what to expect during the process, which, to me, an individual broker, I think, wouldn’t have been able to do that. And a lot of the paperwork was done without any problems. We also had recommendations on lawyers to look at the contracts, which I don’t know if we would’ve found without Andy guiding us in that direction.
Do you feel like it saved you any stress?
“Oh, if I tried to sell it on my own, it would’ve been crazy. It would’ve been really hard. This way, we found a qualified company to buy it that I’m happy with. We could’ve literally walked up and locked the doors. We’ve had employees that have worked with us for 20, 30, even 40 years in my group, so that was our biggest concern was how to handle our employees. We made it into the contract where they took them on, and it’s worked out well.”
It sounds like the transition plan has been pretty organized.
“Yeah, pretty. It has stumbling blocks, different philosophies and things, but the company that I’ve gone with has been just more than … they just bend over backwards to help me keep it going.”
You were purchased by a DSO. What are the pros and cons of selling to a DSO over what you think it would’ve been if you’d gone private?
“It’s more organized. They have teams of people that would come in, and that’s a good point, and it’s also a bad point because you’re used to just tackling a problem on your own, and now you have this human relations group come in and tell you how to do stuff. That’s different, but, like I said, my direct manager over the dentists in our area, they just said, ‘You just keep the practice just like you’ve been doing for 25 years.’ That’s the way it’s been going.”
You’re working essentially on their staff now, has that been a positive experience?
“You gotta be real careful with who they go with though. I mean, each DSO’s different. This one is a local DSO that was started here, and they’re just trying to build up the practices around the area, so that makes it a lot easier because they know the population. They know what they expect out of dentists. It’s just a lot better than some huge national company coming in there and buying you out.”
Do you have any other advice to someone who is in the early stages, thinking retirement is on the horizon?
“I had wished that, looking back, that I was able probably to sell to a private individual. This is nothing about the company. The company’s great. They’re going to keep the reins going and all the stuff. But the change from an individual practice to this corporate group, it’s been hard on the people in the office.
“So, I would give it a little more patience, even with Andy. Andy said, ‘Anything you want to do, you want to say no to this, let’s keep going out for a private buyer.’ We had a calendar set up where we wanted to go ahead and start moving out, so that’s why we went with this group. I know there’s buyers out there, but with the cost of school nowadays, it’s very difficult for someone graduating right out of school and a residency and being able to afford to buy a practice. To get them qualified to buy a practice would be very difficult.”
Could you tell me just a little bit about the area you’re in and how being in a smaller market impacts your practice?
[W]e’re a college city, population of about 250,000. [W]e’re in Lubbock. We have Texas Tech here, 40,000 students. The big thing about Lubbock is, we draw from all over eastern New Mexico and from Amarillo to Midland. We call ourselves a hub city, so people come from all over the area. My practice draws from about 120 miles around. People can hop on a Southwest and be in Dallas in 50 minutes. But they don’t see that.
How do you emotionally prepare yourself to let go of a practice that you built by hand? What kind of counsel would you give to somebody who’s really just saying, “How do I let go?”
“The way I look at it is, I look at my old partner when I bought him out. He stayed on with me for about seven years, eight years after, and I just pleaded with him not to retire, but he said, ‘It’s time.’ But I look at the mistakes that I made when I was just coming into the practice. You say some hurtful things. You make some wrong mistakes with staff. You buy the wrong things. You have to think back to then and what it was like and be a little more sympathetic to the new buyer and realize it’s time to start letting them take the reins and you moving out. It makes it a lot easier.”
The vision of what you want to do next is probably driving you. What do you envision you’re going to spend your time doing?
“Yeah, fishing. I’m a pilot, flying. We love cars, so we have a racetrack just a few miles away from the house. Just getting away from under that grind of the practice all the time.
“You gotta plan many, many years in advance though. I mean, we had our financial planner literally in sophomore year . . . and he goes, “I know you can’t start saving now, but be prepared for it when it’s time, and we’ll get you going.” It’s been 29 years now, and he got us prepared. You can’t just walk up the last five years and start saving. You have to be ready for it.”
Is there anything else that you wish you would’ve known or would want a dentist who’s or is getting ready to sell and considering ddsmatch Southwest to know?
“One thing Andy did for us that was really good was he talked to us about having a team on our side, the lawyer and my personal CPA. Andy and Randy all worked together on that, so when they would throw us a contract, if I didn’t have the lawyer, I would’ve been eaten up, the first time we saw it from the DSO. And it was a matter of negotiations over many, many weeks. They throw it at us, we go through, cross this out, cross that out, hand it back. We did that just back and forth for many, many weeks until it finally was acceptable for both of us.
“Without a real, nailed-in contract, I think it would’ve been a lot more difficult. I know to the tenth of a percent what my earnings are. I know what my hours are. Everything’s been written in, so there’s no question about it.”
Was it worth using ddsmatch Southwest ? And if so, why?
“I would definitely do it again. It was really a really good experience. I’m not just saying that for this interview. I wouldn’t have done the interview if I didn’t think that. But Andy just said, ‘Text me anytime of the day or night. Whatever you need, just ask questions.’ He would find an answer for it. We had many, many ups and downs all the way through the whole process. Andy even helped us when we had to have the meeting with the staff and say, ‘Hey, this is coming down the pipe.’ He ran the meeting and answered questions. A lot of people were worried and things. It just made it a lot easier. A lot of the uneasiness, he calmed it down a lot.”
Why would you recommend ddsmatch Southwest?
“I just think they’re highly accurate. They work for you. Very friendly, very knowledgeable, and they’ll take care of you. If you have any issues, you tell them, and they’ll watch out extra carefully, just to make sure those issues are covered before you actually sell. There was no time in the process where I couldn’t have walked up to him and said, ‘Andy, this isn’t right. We’re out of here.’ He would’ve said, ‘Okay, let’s go. Let’s move on.’”
You really felt like ddsmatch Southwest was on your side?
“Oh, yeah.”
Don’t Put Your Dental Practice for Sale by Owner
Dr. Johnson’s experience with ddsmatch Southwest shows the real value of using a broker. With 30-years experience, no one knew his practice and his market better than him. But the market he knew was for selling dental services, not the market for selling dental practices. Instead of just assuming, “I can sell my dental practice on my own,” Dr. Johnson recognized the complexity of brokering a sale (legal, real estate, valuation, finding the right buyer, getting it done on schedule) is far beyond the expertise of even the most experienced doctors.
If you want to maximize value and minimize hassle, don’t run the risk of putting your dental practice for sale by owner. Let ddsmatch Southwest do the work for you. If you are thinking about transitioning your practice, ddsmatch Southwest offers a free Practice Transition Assessment and uses a Trusted Transition Process, with proven results as seen with Dr. Johnson. Call and schedule your free no-obligation consultation today.
Be Prepared for Life’s Surprises
/in Selling a Dental Practice /by adminBe Proactive in Listing Your Dental Office for Sale
Life comes at you fast. Everyone has their share of accidents, illness, and other life-changing events, some more tragic than others. We all share the dream of exiting our careers on our own terms and on our own schedule, but rarely do we consider how easily that can be derailed. If you’ve read our recent post, “ In His Own Words: How ddsmatch Southwest Helped Me in Selling a Dental Practice,” you recognize the need to be ready for whatever life brings your way. While you may very well enjoy a decades-long practice and retire on your own terms, not everyone will be so lucky. But, you can be prepared.
Below are five steps to help you be ready to put your dental office for sale in case of an emergency.
Hope for the Best, Plan for the Worst
No one has bemoaned being too prepared, but too many find out the hard way they were not prepared enough. Even if you never need a contingency plan, you’ll benefit from the peace of mind of knowing that, should the unexpected happen, the people you care about and the practice you’ve built will be taken care of.
Clearly Define Your Retirement Goals
First, you should have a reasonable retirement plan that can be put into place at any time. Wherever you are in your career, it pays to thinking about what you need to get out of a sale of your practice if there were an emergency, so you could be able to live and support your loved ones in the way that you want. This requires a fair amount of advance planning and outside help.
If you don’t have a dental CPA, find one. The same goes for a dental attorney, a practice broker, such as ddsmatch Southwest, and possibly an insurance advisor and a practice consultant. If you don’t know how to find qualified team members, your broker can help. Here at ddsmatch Southwest, we have a large team of strategic partners and can make referrals to experts based on our extensive experience in dental practice transitions.
Once you have your team in place, they can work with you to clearly identify the amount you think you need to net from the sale of your practice. Then have your dental CPA, insurance advisor, and practice consultant take a look at your books and your practice to determine whether its realistic with your current practice. If you need to increase collections or cash flow, your advisors can help guide you well in advance about what investments will bring the most reasonable returns, and which won’t. They can suggest or talk you through other changes that can help you maximize your earnings, investments, and savings, while reducing costs and taxes.
Maximize Value without Losing Value
The old maxim that it takes money to make money is true. If you need to invest in or expand your practice to meet your retirement goals, it’s going to require a capital investment. A common mistake is a dentist investing in growth without adequately protecting their current assets and practice. Also, value-saving measures don’t have to be austere. It can include non-compete agreements with your key staff members and associates. It can include an insurance review. It can include better tax planning to identify areas for savings. It definitely should include a solid plan to protect your personal and practice assets. Your advisors can help you make a plan that won’t overly burden your current practice, savings, or income.
Remember, your goals here are to grow the practice and increase cash flow, while still being prepared for whatever comes your way. There are established methods of doing this in the dental industry: grow your patient base, optimize treatment plan acceptance, improve your patient’s overall experience (customer service). You should regularly review your fee schedule and, when you do, negotiate those with the insurance providers. This simple step can add 5-10% on average to your revenue.
Finally, an important asset to your practice is your staff. Create an office culture that inspires loyalty and, when the time for transition approaches, work with your staff to ensure they stay on through the transition.
Figure Out What Kind of Sale You Want
Basically, this is about whether you want an outright sale of the entire practice to an outside dentist or whether you want to bring on an associate with a buy-in agreement.
An outright sale can be good, as it yields a lump sum payment for the entire value of the practice. It allows for a fast transition and, financially, is less risky than a buy-in. But there are things to watch out for:
If you think retirement is still a long way off, you may want to consider an inside transfer. That would mean something like selling to an associate over a period of years, three to five being fairly typical. A benefit of this is that it allows you to grow the practice in the interim, and perhaps take more time for your own interests. It can also be motivating to associates and encourage them to stay.
Again, however, it will require diligence and careful planning in conjunction with your team of advisors. Your lawyer in particular will be key–you’ll need a solid agreement that clearly details the agreement and its terms: when the transition will be, how the transition will occur, what will be the measure for valuing the practice, how will everyone be paid, and how and under what conditions can the agreement be cancelled.
Contingency Planning for the Practice
The first three steps all apply when you are putting your dental office for sale on your own terms. This step, and the next one, address contingency plans for when you must do it on life’s terms, instead. If you pass away, are injured, or start seeing signs your body is not going to cooperate with your timelines, you need to ensure that your practice continues operating at the highest level possible until a sale can be completed. This will allow you and your family to get the full value of the practice, while protecting your employees and providing continued care for your patients.
Some contingency plans may include a buy-sell agreement. This is an agreement used to reallocate a share of a business if an owner dies or leaves the business and requires that the business share is sold to the company or the remaining members of the business according to a predetermined formula. Life and disability insurance plans also play a role. The proceeds from insurance can be used in a variety of ways, including hiring an associate to work in the practice until a sale is complete.
Your Personal Contingency Plan
If you haven’t done so already, work closely with your dental lawyer and dental CPA to get your affairs in order. If you have already done this, review it with your advisors and make sure its adequate to meet your retirement and contingency goals. It should be adequate to cover your family’s needs, but also to take care of you long-term in case of disability. If you are lacking assets to cover these costs, consider life and disability insurance plans. Your documents should also include things like assigning power of attorney and an advance medical directive.
Start Planning Now: Be Ready to Put Your Dental Office for Sale
A common rule of thumb is that two to five years is the window for planning for transitioning your practice. But, when it comes to being prepared, it’s never too early to start. Here at ddsmatch Southwest, we offer a free Practice Transition Assessment for dentists who are looking at transitioning in the next five years. It’s an easy way to get a professional look at your practice and what changes would be advantageous to maximize value before you put your dental office for sale. Contact us today for your no-obligation assessment.
Ten Things to Consider when Buying a Dental Practice
/in Buying a Dental Practice /by adminBuying a dental practice is one of the most important decisions a new dentist or dental associate can make in the course of their career. No detail is too small to consider, and there are a lot of factors outside your area of dental expertise that require skilled advisors.
While that may seem daunting, the good news is that people have been doing it successfully for years when they’re backed by the right team. There is a tried and true process, and a clear set of considerations. When you follow the guidance of experienced professionals, it will greatly enhance your chances for success.
In this post, we discuss things to consider as you get ready for the next exciting step in your career.
Start Day One with an Existing Patient Base
An existing patient base means a paying patient base. If you start a new practice, unless you have a loyal base of patients who will follow you from an associateship, you are starting from scratch. You’ll invest a lot in overhead to establish an office and hire staff and then . . . wait for the patients to come. But, when you buy an existing practice, you have patients in the door from day one. Now, that doesn’t mean you’ll keep all of those patients (more on this below) but you will be starting ahead, instead of behind.
This, of course, doesn’t mean you don’t have debt to worry about. The practice will likely have been purchased with a loan, and you’ll need to be able to earn enough to keep the lights on, service your debt, and take something home for yourself. Look at the practice’s cash flow and expenses to see if your expenses will match that, whether you can cut costs, and whether the practice is really sustainable. According to Bank of America, “Lenders usually look for the practice 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.”
Rely On a Team of Experience Professionals to Do what You Can’t
It’s likely you haven’t had experience buying and selling small businesses, dental or otherwise. There can be a lot of complexities in these transactions, depending on how the practice is set up, and there will be a lot of details you won’t even know you should worry about. Without a team of experienced professionals, you could walk right into a common pitfall without even knowing it.
To be successful, you will need these members on your team:
The Term of Your Practice Loan
There is some flexibility here, with most loans ranging from five to 15 years. A longer term can be beneficial, as it will reduce both the impact your debt service has on the practice’s cash flow, and the risk inherent in losing some of the existing patient base (it will happen to some degree). You also may want to consider a flexible repayment option. If you grow your practice or otherwise increase your cash flow, you want to have the option to prepay the loan. If you are concerned about cash flow in the early days, ask about the loan being structured for interest-only payments for the first six months to a year.
Also, as with any loan, consider your interest rate. Often, a low, fixed rate is the best option. While an adjustable rate can have lower payments initially, eventually rates will rise, and so will your payments.
The Advantages of Buying a Dental Practice
As discussed above, an established practice has an established patient base, with a cash flow from day one. Also, the practice has established relationships with the local insurance providers.
The practice has an experienced staff. You don’t need to find, hire, and train a staff. However, remember that the practice was built around the dentist who, depending on the term of your contract, may not be around. Try to arrange to keep the existing staff on for at least a year. This way, you don’t have the hassle and expense of hiring new staff while learning how to run a practice. Also, the patients know the staff, and familiar faces will help with patient retention.
On that point, while the practice has a patient base, despite your best efforts, you will lose some of that base. Your broker can help advise on the best strategy to retain patients, which often starts with a letter explaining the practice transition. Ideally, the selling dentist will write the letter, as that dentist is someone the patients know and trust.
The Disadvantages of Buying an Existing Practice
While there are several advantages, there can be downsides as well. You aren’t just buying a business, you are buying the philosophy upon which that practice has been built. Your approach will certainly be different, and that may cause some strife with staff and patients, who may look for a new dentist.
Changes in workplace practices and policies can be tough for staff, especially when they don’t see why change is necessary or desirable. Also, if the staff members have been around for awhile, their compensation may reflect that, making them seem overpaid. Carefully consider this before making any staffing changes.
Before you finalize the sale, look closely at the office equipment and decor. Consider what updates or upgrades are required and what the cost of those will be. Factor this into the valuation process.
You Are Not Just Buying a List of Patients and an Accounting Ledger
As indicated above, the practice you’re buying was built around a personality and method of organizing that practice. This brings in a lot of things beyond just dentistry. The selling dentist had a vision for their practice and worked to achieve it. Is your vision for your practice compatible with that? If not, it may be a painful transition for you, the staff, and the patients.
When you own a dental practice, you quickly learn that you have to become a jack-of-all-trades. You are the CEO, CFO, and the human resources department. This is all in addition to being both a practicing dentist and the lead clinical director. Be sure you are ready to take on these responsibilities.
Other things to think about include:
What Type of Acquisition is Best for You and for the Practice?
The common types of acquisitions include:
Practice Valuation
As in most transactions, there is frequently a gap between what the seller thinks their practice is worth and what the buyer thinks it is worth. As the buyer, you should consider that, for the seller, it’s very personal. They have spent their career building their practice and represents a significant investment of time, money, blood, sweat, and tears. Also, depending on the practice, the dentist may have provided care for generations of families and have strong community ties. All of this will impact the value they place on their practice.
Typically, what buyers are willing to pay (market value) is what the practice will sell for. A rule of thumb can be 70-90% of the last year’s revenue. Speciality practices may value for less because they rely on referrals, which are less predictable.
If You’re Planning Changes for the Practice, Take it Slow
Unless you’ve done a buy-in or option to buy, you are well advised to take your time to get to know the practice: the staff, the equipment, the patient flow, the patients themselves, the billing, and all of the processes and policies. Make sure you understand how it all works together (or doesn’t work) before you start making changes. There might be things that seem odd, but become clear once you are on the inside. Making changes too fast could create disruptions that would cause staff and patients to go elsewhere unnecessarily.
Due Diligence
In every business transaction, due diligence is essential. This means that you undertake a comprehensive appraisal of every aspect of the practice. You may want to retain a consultant to evaluate each aspect of the practice, including staffing, systems, and a complete chart audit and patient count. This type of consultant can also advise post-sale on ways to improve the practice according to your career goals without too much disruption.
At ddsmatch Southwest, we specialize in bringing sellers, buyers, and associates together. Using the experience of hundreds of transitions all across the country, we can help you with buying a dental practice and help it go smoother by avoiding common mistakes and finding the right match for your career goals. Contact us today and find out what we can do for you.
In His Own Words: “Call DDSMatch Southwest”
/in Selling a Dental Practice /by adminDr. Mitch Conditt, a dentist from Fort Worth, Texas, found himself in an unexpected and unfortunate position: he was having increasing difficulty holding a handpiece, and he knew it wasn’t going to get better. Retirement wasn’t yet on his radar, yet it was clear he needed help with something he’d never done in his 30-plus-year career: selling a dental practice. He didn’t know where to start, but he knew that ddsmatch Southwest did. Here, in his own words, was his experience.
“My Hands Just Were in Real Bad Shape”: How Dr. Conditt Came to Need Guidance in Selling a Dental Practice
“I’m a general dentist in Fort Worth, Texas. I’ve been practicing since 1985, mostly a restorative and cosmetic practice. Been in the same location, everything, since day one. Noticed probably about three or four years ago that I was starting to get some ailments with my body. Had some neck surgery, shoulder surgery, hand surgery, different things like that. I could see the writing on the wall that this wasn’t going to go on for a long, long time before I couldn’t really work much more.
“I started getting into a different field of dentistry, which was sleep and TMJ [temporomandibular joints], where I didn’t really have to hold handpieces, use my hands so much, do things like that. I started getting into that, knowing that this was going to happen, that one day I would need to sell. Actually, it happened a lot faster than I thought. It almost happened overnight. All of a sudden, I couldn’t hardly hold a handpiece. My hands just were in real bad shape.
“Interestingly, I had talked with Andy [Edmister] with ddsmatch [Southwest] probably about a year and a half earlier. Ran into him at Chicago Midwinter Meeting. He just showed me what he was doing. He just took me over to his booth, because I’ve known Andy for a long, long time. He just showed me what was going on, how things were doing, and what he was doing now. He said, ‘If you ever want to have your practice evaluated,’ he goes, ‘We’ll come in and evaluate it to see what’s going on.’ I kept that in mind. Then literally it must have been about the summer, maybe even the early fall of the following year, it hit me and I thought, ‘Oh, this is going to happen really, really quick.’
“I called Andy and I said, ‘I’m ready,’ and he said, ‘Well, thinking, what, another six months?’ I said, ‘No, I’m ready, like, tomorrow.’
“He got out here, he did the evaluation on the practice and all this stuff. I said, ‘Look, if you can just do this for me and let me keep doing what I’m doing, that would be great.’ He said, ‘Don’t even hardly need you,’ and he just did everything he needed to do. It took very little effort from me or my time.
“It’s not maybe two months later, he calls me up and he says, ‘We’ve got someone that I think you might want to talk to.’ I said, ‘Great.’ He said, ‘Let me get everything really kind of figured out before we even pull you in on it, but we think we may have a possibility.’ Weeks later he said, ‘This thing is, I think, going to work.’ Apparently he was working with Dr. Blair, who bought my practice. He was working with her and they were getting their ducks in a row and all that. I didn’t even know if I knew who it was back then, but I know that I didn’t do anything. Basically at one point, not much longer, he said, ‘Well, I think we’ve got a done deal.’
“Then we got a couple of attorneys to wrap it up, and in no time at all it was done. It could not have been easier. I’ve had several of my friends that I’ve talked to that have gone through prospective buyer after buyer after buyer after buyer, and nothing ever panned out, things fell through. It just didn’t work out for some reason, whether it was funding or whatever it was. This thing just went smooth as silk. Literally by March 2, we closed.
“Literally, there was no way it could’ve gone any better.”
Putting Your Dental Practice for Sale Doesn’t Mean You Have to Stop Practicing
Although Dr. Conditt was selling a dental practice, he still wanted to practice, and he “still wanted to do sleep and TMJ.”
“It wasn’t even really in the contract that I had to do that, but . . . [w]hy would I really want to leave here? This is where I’ve been coming for 30-something years, every day. We had a spot where I had been doing sleep and TMJ out of this office. I kept the same little place I was at. It’s worked out great for me. . . . I wouldn’t say I’m looking at full retirement for a good while, but I only practice about eight days a month. . . . That’s not a lot of work really. I would practice more if I wanted, if my body’s fine, and I’m doing something that I could do for ten more years if I wanted to do it.”
Why Having Trusted Advisors is Critically Necessary
When selling your dental practice, you need a professional team with experience in things like dental accounting and valuation, real estate, legal transactions, and more. Because your speciality is dentistry, not in dental brokerage, ddsmatch Southwest can help you find the right team to get you what your practice is worth. ddsmatch Southwest has a strategic partnership with Blue & Co., an accounting and consulting firm with dental CPAs and certified business valuators.
Dr. Conditt explains his experience with Blue & Co. and the other professionals ddsmatch Southwest matched him with and why its essential to follow the advice of experienced professionals:
“The terms of the deal were exactly what we asked for. [Blue & Co.] came in and did all the work. . . . As far as I can remember, and I’m almost positive, we didn’t change one single thing in the contract. It went just exactly as Andy and them put it out there. That’s how it went.”
Dr. Conditt’s Tips to Dentists Looking to Retire in a Few Years
Get an Evaluation
“Obviously I’d ask Andy to make sure on something like this, but I’m thinking if you’re even close to a year, maybe even two years out, why not go ahead and get your practice evaluated, have Blue [& Co.] come in and take a look at it and see what’s going on for one, there may be things that they find that they say, ‘You know, if you change this or if you did this a little better, we could get more money for your practice down the line.’ Andy told me that. He said, ‘Probably with your practice it’s not,’ because mine was basically a cosmetic practice, so it’s a little bit different, but he said a lot of times there are things that they can tell you to do that will increase the value of your practice. That would be one.”
Start Early
“I don’t know if they would suggest that to be two years out or three years out. [NOTE: ddsmatch Southwest recommends dentists begin the planning process 3-5 years ahead of retirement.] The fee to have that done was not very much. I don’t know if they still do it, but that fee was refunded back to me once the practice sold. That was a no-brainer.”
Hope for the Best, Plan for the Worst
“The second reason is you don’t know when anything’s going to happen. You don’t know when you’re going to need to sell. From everything I’ve heard, it takes a long time to get everything in order. Particularly if something happens, it’s a little bit of an emergency to go in and try to get everything you need to get done in a short period of time. Then you go through a lot of different people to see who’s going to work best, what’s going to happen and what have you. When you’re going through all of that, that can become a little bit of a hassle. If you get that done and get completely prepared, I think everybody’s going to feel a whole lot better about everything.”
Keep the Sale Under Your Hat
“The other thing, I don’t think everybody does this, at least the friends I’ve talked to didn’t do that. One of the things that they do, or at least Andy did, maybe this is the philosophy of ddsmatch [Southwest], and I never heard of this before, was don’t tell anybody you’re going to sell. Don’t tell anybody you’re thinking about it. It was all one of those things where if everybody knows and your practice has been on the market for a year, I guess it’s like if your house has been on sale for a year: ‘Nobody’s bought it? Something’s wrong. It’s either priced too high, there’s something wrong with the house.’ Everybody gets to thinking, ‘Well, how come nobody’s bought it in a year?’ If no one even knows your practice is for sale, and all of a sudden they bring someone to the table, they have no idea what’s going on.
“I found out with a good friend of mine in Tennessee, that’s exactly what happened to him. He had just whoever come out and evaluate it. The evaluation was fine. It’s almost like he put it up in the paper that the practice was for sale. He didn’t do that, but it was certainly not kept a secret. He didn’t sell for probably two years, and that’s exactly why, because everybody thought, ‘Now, wait a minute. This guy hasn’t sold his practice in a year. Something must be wrong.’ There wasn’t anything wrong with it. It was a great practice. I don’t know if that’s [ddsmatch Southwest]’s philosophy or if that’s Andy’s philosophy, but that was tremendous to do that right there. Just keep it silent, let Andy do all the work, and it worked out beautifully.”
Dr. Conditt’s Advice to Anyone Considering Selling a Dental Practice: ”Call ddsmatch”
“Without a doubt, I would have them call and talk to ddsmatch [Southwest] and just ask them, ‘What do I need to do? Should we get evaluated now?’ I’m sure they’ll ask you, ‘How long out do you think you are?’ I would literally tell anyone, call those guys up. Follow exactly what they say to do, and just let them do it. There was zero effort on my part to do this.
“ddsmatch [Southwest] . . . were very honest. They were very forthright in everything they said. There was no hiding anything. They let you know exactly how the process is going to work, what’s going on. Blue [& Co.] . . . has a great reputation. They did everything very well. What I noticed afterwards is that once some of the banks and the lenders saw who was evaluating the practice, there was no discussion on what the evaluation. Was it really worth that? Was it not worth that? I guess they had the reputation that you just take their word for what it’s worth. That was great.
“Andy actually hooked me and Dr. Blair, who bought my practice, hooked us both up with attorneys. Even I asked her about her attorney. Both our attorneys were fantastic. They didn’t drag anything on. They were not expensive. They said everything exactly like it ought to be. They actually knew each other. They had done this before, so they knew how to get this handled. That was incredibly smooth. Andy was a dream to work with because literally, like I said, I did nothing. When he had to get some numbers, he just basically said, ‘If you don’t mind letting me go into your computer, I’ll do it while you’re working. I’ll just get the numbers, and you can go on.’ They’re asking us to pull numbers off of our software system, and it’s like, ‘We don’t know how to do that. We have no idea how to get these numbers you’re asking.’ They just go in it and do it themselves. Those things right there are really, really invaluable for us when, particularly, we don’t know how to get that stuff, and we don’t want to jack with that. We don’t know, are the attorneys good? Are the evaluations going to be good? Are the people behind the evaluations honest and everything?
“Everything was completely on the up and up and even above that.”
“Call ddsmatch [Southwest] and just say, ‘Look, hold my hand. Walk me through this thing. Tell me what to do.’ It’s the easiest thing you can do.”
If you are considering putting up your dental practice for sale, ddsmatch Southwest will give you a free, no obligation Practice Transition Assessment. Contact us today to learn more about their Trusted Transition Process and what ddsmatch Southwest can do for you!
Dentistry in Rural Areas: Higher Esteem and Higher Profit Margins
/in Dentistry in Rural Areas /by adminIt’s a common idea: put in your time at dental school and in a residency, then settle into a practice in the big city where you can really enjoy the proceeds from your hard work. Urban living has a lot to recommend it–the cultural opportunities like symphonies and art museums; great restaurants and an exciting nightlife; trendy shopping boutiques and hip loft apartments. But there can be some disadvantages, especially when compared with dentistry in rural areas.
Urban living, for all of its excitement, can be taxing both psychologically and financially. Cities are crowded. The crowds and lack of open or green space can make some feel claustrophobic. The competition for living and work space drives up costs. And when it comes to a dental practice, there is a lot of competition for patients. If other dentists are open early and late on weekdays, or take patients on the weekend, then you might feel pressure to do the same.
Why it’s Smart to Consider Buying a Dental Practice in a Rural Area
On the one hand, as said above, city living can be exciting, but it’s not called the rat race for nothing. If you asked your dental school classmates, probably 9 out of 10 would say that they wanted to practice within 30 minutes of a major city. By contrast, rural dentistry doesn’t have nearly that level of competition. The rural areas are often underserved, which means you have a ready patient base without much, if any, competition. This translates into several benefits that can greatly improve quality of life.
You may be concerned whether you can retain existing patients if you are buying a practice in a rural area. However, many small towns only have one dentist. This means the practice will have a built-in patient base, without any local competition. In rural areas, patients are less likely to drive 45 minutes out of their way to see a dentist in the big city.
Plus, living in a rural area doesn’t mean you don’t get to enjoy what a larger city can offer. What you save in overhead and living expenses can be turned into weekend getaways and vacations. A rural dentist can enjoy the quiet life while indulging in city life when they choose.
Associates Should Also Consider Dentistry in Rural Areas
If you’re not yet ready to buy a practice but are more interested in an associateship, dentistry in rural areas can be a great option. Many of the benefits listed above also apply to associates. Lower stress levels and shorter hours means more time for you to enjoy your hobbies and free time. If your compensation is based on collections, in a rural area your compensation can go further.
When you begin your career in a rural area, especially if you have an eye toward eventually buying into or acquiring the practice, you can create lifelong community ties. Rural areas and smaller towns have less anonymity, meaning that the services you provide are not simply transactional, but can be more meaningful on a personal level. You’ll treat the school teachers, the civic leaders, your children’s friends and parents. A rural dentist can be embedded into the fabric of their community in a way that’s not possible in the city. It may ultimately become one of the most personally fulfilling aspects of your professional life.
Selling a Rural Dentistry Practice
If you are one of the dentists who practice dentistry in rural areas or small towns and are thinking about transitioning your practice for retirement, you have a lot to offer potential buyers. But also take time to consider updating your office equipment, furniture, and decor. Has your practice gone digital or is it still paper and filing cabinets? Younger dentists looking to buy an established practice often want the latest technology and service options already implemented into the running of the business. No doubt your office runs well, but be aware that expectations have changed about how offices operate and information is managed.
At ddsmatch Southwest, we offer a free Practice Transition Assessment where we can advise you how to get the most value out of your practice. We’ll look closely at your practice, being mindful of the community you serve, and offer advice based on the hundreds of transitions we’ve facilitated across the country. We want to help you get the most for your practice and find the buyer best suited to match.
If you are considering transitioning your practice within the next five years, give us a call to arrange your free assessment. Find out what ddsmatch Southwest can do for you today.
ddsmatch Southwest to Join Austin Dental Panel
/in Events & Conferences /by adminDentists, please join us in Austin on August 10th and get the information you need to successfully navigate our quickly-changing industry.