How Asset Allocation Helps When Buying a Dental Practice for Sale

It’s easy to think of buying a dental practice for sale in a monolithic way. For instance, you might think, “What am I buying? I am buying a dental practice and it costs $500,000.” But, in reality, you are buying several different components that, together, constitute the dental practice. These things include: 

  • Equipment
  • Supplies (dental and office)
  • Improvements to the office or property
  • A covenant not to compete by the seller
  • Patient records
  • Goodwill

Each of these can be valued separately. When negotiating the price of each separately, you can get away from just talking about one number—the overall value. By breaking each item out by individual value—known as asset allocation—you can do a couple of things.  First, you can actually make negotiations go smoother by not just dealing with one big number that a seller (or buyer) can get hung up on. Second, your dental accountant or tax professional (and the IRS) will not categorize all of these items in the same way. By using asset allocation, you can save yourself from overpaying taxes. These two factors, together, result in a better conclusion to the deal for both you and the seller.

The Depreciation Rule

The rule the IRS will use when looking at the assets in the sale is depreciation. Depreciation is the allocation of value to an asset over its useful life. The goal with depreciation is to try and match an asset’s expense to the revenue it helps generate. For instance, if you spend $1,000 on a computer, you will likely use that computer for several years. Because of that, the cost of the computer will be viewed, for tax purposes, as spread over the period of its useful life, not just in the year it is purchased. This rule applies to any asset with a value over $600 and a useful life of more than one year.

Using the assets identified above, the IRS will typically view them as follows with regard to the buyer of a dental practice for sale:

  • Supplies (dental and office) – expensed in the year purchased
  • Equipment – depreciated over five to seven years
  • Improvements to the office or property – depreciated over 15 years
  • A covenant not to compete by the seller – depreciated over 15 years
  • Patient records – depreciated over 15 years
  • Goodwill – depreciated over 15 years

For the selling doctor, the IRS will typically tax the sale of these items like this:

  • Supplies (dental and office) – ordinary income
  • Equipment – ordinary income
  • Improvements to the office or property – long-term capital gain
  • A covenant not to compete by the seller – ordinary income
  • Patient records – long-term capital gain
  • Goodwill – long-term capital gain

Because long-term capital gains are taxed at a much lower rate than ordinary income, the seller will want as much of the value as they can get assigned to goodwill.

The Fair Market Value of an Asset is the Negotiated Price for Each Asset

After a transaction to buy a dental practice for sale, when it comes to tax time, both parties are required to independently report the values of the assets included in the sale. Both parties must be in agreement in what the value for each is. However, what values they assign to those assets is negotiable. 

The rule applied by the IRS to the valuation of assets is their fair market value. But fair market value is simply the price that an independent buyer and seller can agree upon. So, basically, you reach an agreement on overall price for the practice, then negotiate the value of the supplies, equipment, improvements, covenant not to compete, and patient records, and the rest of the value is assigned to goodwill. As long as both parties agree on the value assigned to each asset, then that is the asset’s fair market value.

Why Negotiating Asset Allocation Matters

Negotiation asset allocation is important because it allows you, when buying a dental practice for sale, to negotiate points beyond overall price. It allows you to find areas where your interests and the interests of the seller are aligned—or, at least, aren’t in opposition—and work toward a mutually beneficial final arrangement.

Here at ddsmatch Southwest, we believe a good deal is one where both parties walk away from the table satisfied with the terms of the deal. Asset allocation allows you and the person on the other side of the table to move pieces around to find the combination that works best for all involved. For instance, if a seller feels strongly about getting the full asking price, they may be willing to move some value out of the goodwill category and into equipment, which would benefit the buyer. Or, if the seller is concerned about their tax bill, they may be willing to come down on the overall price and keep more of the value in goodwill.

Everything is Negotiable

Saying everything is negotiable might be an overstatement, but, remember, there may be a lot more that is negotiable than you might first think. What we’ve discussed here has focused on the money involved in the sale of a dental practice for sale. There are a lot of things that don’t impact the valuation of the practice that can be negotiated to facilitate a successful transition. These include the buyer’s starting date, the seller’s letter to patients, ways to protect current staff, other restrictive covenants beyond the non-compete, or a right of first refusal on purchasing real estate (if the seller owns the building).

The key takeaway is that the more knowledge you have about your options, the higher the probability that you will close a successful deal. After all, both parties want essentially the same thing: the sale of a dental practice in which they have confidence. The seller wants confidence that the buyer will take care of the practice, patients, and employees—that their legacy will be protected. The buyer wants to own a dental practice with a steady income stream that they can feel good about.

We Have Dental Practices for Sale in Texas and New Mexico?

If you are ready to make this next step in your career, we have available dental practices throughout Texas and New Mexico. You can view our listings here. If you see any your are interested in, or have any questions, please contact us— it starts with a conversation.

Tips for a Successful Transition when Buying a Dental Practice

When it comes to owning your own practice, the big question, of course, is whether to start a new one or whether to buy an existing practice. While its a question you should think about carefully, there are a lot of considerations that support buying a dental practice. When you buy a practice, you get—from day one—an existing, paying patient base, established relationships with insurance providers, a reputation in the local community, staff, and an infrastructure for both providing patient care and handling the business and administrative side of things. 

At the point in your career where you’re making this decision, you’ve probably got at least a few years as an associate under your belt. You know the clinical side, you know how to manage your patients, but you likely have less experience on the business side. When you buy an existing practice, having staff and structure in place will go a long way toward easing you into the role of a small business owner, rather than having to piece it together yourself. 

In this post, the fourth in our series on preparing to buy a dental practice, we’ll discuss a few points about how to have a successful transition into dental practice ownership.

Patience is a Virtue

All good things come to those who wait. This is one of many maxims that are easier said than done. A dental practice transition can be a long process, and some even take years to complete. You might get to feeling, “Enough, already!” But being careful in your transition will likely pay off in the end.

First, you need to be patient to find the right match in buying a dental practice. At ddsmatch Southwest, our goal as dental practice transition specialists is to help facilitate that match. We believe a good deal is one where each party walks away from the table happy with the agreement they’ve made. 

The best way to accomplish this is to match a seller with a buyer who shares their practice philosophy. This way, you, as the buyer, get a practice with the kinds of patients you are looking for, which practices the type of dentistry you want to practice, and which has the type of office, staff, and location that matches your career goals. The seller gets the peace of mind knowing that their patients, staff, and legacy will be well cared for.

Figuring out this match takes some time. It might not be the first or second practice that you look at. And, even when you think you’ve found the right one, you’ll need to spend time in the office and with the doctor. Get to know how they practice and why they do it that way. Look at their management style, business methods, and even get to know them a bit personally. The more you know, the better you can determine how good of a match it is.

Since the selling doctor has more experience, you can learn from their successes. Importantly, you can also get a better sense of what can be improved. Finally, when it comes time to implement changes, you’ll be prepared to do so in a way that meshes with the established strengths of the practice.

Don’t Mess with Success (Yet)

If you’re buying a dental practice that’s thriving, there are reasons it is doing well. The doctor has put in a lot of time and thought into how the practice is managed, especially on the clinical side. The seller will know their patients and their community, what works and what doesn’t. Remember, the patients aren’t necessarily going to be thrilled about getting a new dentist—patients don’t stick with a dentist they don’t like. So you need to learn why they come to this practice. And, at first, you should strongly consider adjusting your style to mimic the selling doctor on things like how they explain treatment, how casual they are with patients (joking and conversational or not), and how they interact with and manage staff. This will help put everyone at ease. 

This doesn’t mean you necessarily have to be a clone of the selling doctor. This is simply providing a baseline of consistency as an important part of the success of the practice. Once you’ve got that down, then you will want to make small adjustments to bring in your own style. But too much change too quickly can spook patients. You want them to feel comfortable with the change, and assured that the care they’re accustomed to receiving and paying for will not be downgraded.

If it Ain’t Broke . . . 

While even the best practices have room for improvement, when it comes to buying a dental practice, those improvements are best incorporated slowly. Sometimes older doctors haven’t kept up with advances in technology, marketing, or even the current clinical practices. However, you will be well-served by taking the time to really get to know the practice—both from the clinical and business sides—before making big changes.

One reason has been addressed above: too much change too soon can make patients (and staff) uncomfortable. You need that steady stream of paying patients coming through your door each day and you need the confidence of a staff that feels secure to help serve your patient’s needs. Once you’ve earned their confidence, you can start tinkering with improvements. 

Starting small with things like improving efficiency or updating marketing practices is a good place to start. It will show your staff and patients that the quality of care isn’t being impacted by things that are making the practice better. These smaller changes will also show you how malleable the practice is; you can learn more about where to focus next and how much flexibility you have to make further changes.

Considering Buying a Dental Practice in Texas and New Mexico?

If you are ready to make this next step in your career, we have dental practices for sale throughout Texas and New Mexico. You can view our listings here. If you see any your are interested in, or have any questions, please contact us— it starts with a conversation.

What Information Do You Need Before Buying a Dental Practice?

One of the most important decisions you can make in your career is about buying a dental practice. It is essential that you be thoroughly informed in order to make a decision that will be a solid foundation on which to build your career. Your clinical skills can only get you so far. In order to run a successful practice, you must also have the requisite business knowledge and acumen to manage every aspect of your practice. And, in order to make a strong choice in what dental practice for sale you choose to buy, you should be working on developing those skills now.

However, there is truth in the saying that a jack of all trades is a master of none. It’s simply not possible to be an expert in everything. As you’ve likely heard, you will need to surround yourself with a team of professional advisors who have the education, training, and experience to be the expert in areas where you are not. These include, at the least, a lawyer, an accountant, and a dental practice transition specialist. In particular, a reliable dental accountant will help you evaluate potential dental practices for sale to determine their viability as good options for purchase.

Below we will discuss some of the essential information you will need about a dental practice for sale before you can make a fully informed decision. If a seller is unable or unwilling to provide this information, that should be noted as a warning sign. It indicates that they either don’t want you to know it (a major red flag) or that they don’t have or aren’t able to provide it (indications that the practice may be poorly managed on the business side).

Financial Information

  • Tax Returns – You should expect to see three to four years of tax returns for the practice. These documents provide insight into the historical financial performance and illuminate the practice’s earning trends and stability.
  • Practice Valuation – If the seller is serious about selling the practice, they should have had a professional valuation by a certified valuation expert. Here at ddsmatch Southwest, we use Blue & Co. for our valuations. Regardless of the valuation expert, you should consider how thorough the valuation report is and look into the qualifications of the firm that prepared it.
  • Cash Flow Model – This model is a projection of the practice’s earnings over the next five to ten years. The model should take into consideration growth rates, operating expenses, debt service for the practice purchase loan, and your take home pay.
  • Accounts Receivable – This will show you how well the practice is doing at making its collections.
  • Lease Agreement or Real Estate Appraisal – When considering buying a dental practice, you have to consider whether the practice is leasing space or whether the seller owns his own building and land. Taking over the lease, buying the real estate, or leasing from the seller are all options, but these arrangements are separate from the agreement to buy the practice. In any of these instances, you have to look at what the seller has and whether a deal can be reached that will work for the long term viability of the practice. Also, your lender may have terms that need to be satisfied (e.g., the lease being equal to the term of the loan).
  • Production/Collection Reports – These reports should break down what procedures the seller is performing and what they are actually collecting from those procedures, including those performed by associates and hygienists.
  • Associate Agreements – If there are associates, you need to review their agreements with the practice, especially the restrictive covenant mileage, the length of the agreement, and the non-solicitation terms (of both patients and staff). If there are associates, but not associate agreements, be aware that the associates are free to leave at any time and poach employees and patients. 
  • Employee Salaries and Benefits – This information provides two functions. First, it shows you in detail who the employees are and what they cost the practice. Second, it can show you whether the practice is appropriately staffed or over-staffed. While it is typically advisable to keep current staff on at their current compensation for a certain period of time, you will likely have no legal obligation to do so. However, staffing decisions, especially immediately after a dental practice transition, need to be made carefully. Staff morale can have a significant impact on patient retention.
  • Financing Ability – This involves two factors: your ability to borrow and the practice’s ability to be financially viable enough to service the debt and cover its other expenses, including your take home pay.

Information About the Office

In addition to financial information about the practice, there are some important things you need to know about the office before making a decision about buying a dental practice. 

  • Site visit – You must make a visit to the physical space and be able to see every part of it. Is it in an appropriate location? If it’s in a building with other tenants, how is the property maintained?
  • Equipment and Improvements – You must be able to see the equipment and its condition. If its old and outdated, or in poor condition, that may communicate things to you about the practice. Importantly, it will let you know what you are going to need to replace or upgrade.
  • Ability to Expand – If the practice can be expanded in regards to procedures and patient base, will the office space be able to accommodate it? If not, do you have the option to expand? You don’t want to be locked into a lease that will hold you back. 

Patient and Practice Characteristics

Finally, there are aspects of the patient base and other practice characteristics you need to examine.

  • Active Patients – How many patients have had appointments in the last 12 to 18 months?
  • Insurance – What percentage of the patients participate in insurance plans accepted by the practice?
  • Demographics – What are the patients’ age groups and zip codes?
  • New Patients – How many new patients are coming into the practice each month?
  • Hygiene – How many hygiene appoints are made each month and how much revenue are those generating?
  • Appointment Schedules – Ask to review several weeks of appointment schedules for both doctors and hygienists.
  • Fee Schedule – This would include the list of procedures offered and what the practice charges for out of pocket patients and what they get from insurance reimbursements. How are the normal procedure fees being adjusted for insurance reimbursement? This should be compared to local competitor fees and industry standards.
  • Office Hours – What days is the practice open and for what hours on those days? Consider whether this may be expanded to increase revenue.
  • Reason for the Sale – Why is the seller transitioning the practice? Retirement? Relocation? Selling off a second location? Financial distress? Licensing issues? Other reasons?

While this is a fairly comprehensive list of considerations, it’s not exhaustive. As you review the information relevant to these categories, it can point you to other areas where you may have questions. Be sure to ask those questions. The more information you have, the better prepared you are to make a reliable decision about buying a dental practice.

Considering Buying a Dental Practice for Sale in Texas or New Mexico?

At ddsmatch Southwest, we have dental practices available for sale throughout Texas and New Mexico. Contact us today for more information.

One Doctor Explains Why You Should Consider a Rural Dental Office for Sale

We’ve posted an interview with one doctor, Bill Dean, that we assisted with selling his dental practice. We also posted part one of an interview with the buyer, Dr. Kevin Shively, about his experience on the other side of the deal. Here, in part two, Dr. Shively discusses why he was looking for a rural dental office for sale. 

Let’s talk about the benefits of buying a rural dental office for sale. There are a lot of dentists out there that just think a city is where they need to be to have the practice they want. What would you say to people about considering smaller towns? Has it been good for you?

Oh, absolutely. I wholeheartedly support and agree going rural for opening a practice. Trying to make it in the big city, especially as someone new-ish coming out of dental school. “New-ish” being, you know, five to maybe seven years out of school.

Everybody’s business background is going to be different and, for me, being in the military, I never had to worry about the money issue. It was, “Okay, you need a crown. Let’s do a crown,” kind of thing. But trying to make it in a bigger city like Lubbock, or Odessa, Midland, somewhere like that, it’s going to be a lot harder and you’re going to have to look into participating with insurance, figuring out how to do reimbursements, things like that.

So, can you open a practice in a big city like Lubbock just on your own? Yes, you can. But it’s going to be much more difficult. I would wholeheartedly support and suggest looking into rural practices. The people need the treatment. They will come from, in some cases, hundreds of miles away to get the treatment. And at the end of the day, they know how much work went into it and they are so, so appreciative.

When you’re in the military and you have a bunch of 17 and 18-year-old kids, they don’t necessarily really understand how much work goes into things. They’ll say things like, “Yeah, I don’t know what I’m here for today. My leadership told me I had to come for an appointment today.” While they cooperate and do everything, here’s a case where you worked hours and hours on something, and they take a look at it and they’re, like, “Yeah, looks okay, I guess.”

So, you really kind of lose that love and that drive to do dentistry. Within the first week or two being in Floydada, I found that I was loving coming to work. I found that I loved getting to know and interact with my patients, and just having those moments where patients will cry because of how beautiful their teeth look again, and how they’ll fall over themselves to thank me for the work and everything that I’ve done. It really, really helped me reaffirm why I got into dentistry in the first place.

Let’s talk about your hopes for the future. We’ve talked to a lot of retiring dentists, and they have all sorts of plans of all the fun that they’re going to have. But we haven’t talked to a lot on the buying side. What are your hopes for this practice? How you see it playing out throughout your career?

I definitely want to grow the practice. Being out in the rural area, the patients … They understand there’s some procedures they can’t get around going to Lubbock for, but if they can stay in Floydada, they would appreciate it.

I want to grow the practice and ultimately start doing more procedures and make it a true … as much as possible, a true one-stop shop to be able to get everything done. That’s my hope for the future, is to grow the practice to really make it a well-rounded family dentistry practice.

Going back to rural practices, people might be worried about, “How do I market myself? How do I get more patients?” How are you getting patients to your practice?

Well, I would say rural is going to be more word of mouth. Those first few patients are going to be very leery, which mine were as well, because I’m not Dr. Dean and it’s a situation where you have to trust in yourself. You have to know that you’re doing the best for the patient and also treat them as you want to be treated. Treat them with the kindness and respect that you would love to have if you’re the one sitting in the chair. If you do that, it will come back to you a thousand-fold.

I do a little bit of marketing on Facebook. Dr. Dean, one of his main marketing ploys was, he would … There was a local restaurant in Floydada. He would frequent it, and if he noticed that one of his patients were sitting somewhere in the restaurant, when he went to pay he would also pay for that patient, as a sign of goodwill and “Thank you for your patronage with my practice.”

Because it’s such a wide area that you pull from, you’d want to have some face recognition. Word of mouth obviously would be huge.

We do have a website that we’re starting. It’s still a work in progress. But I want to, for those patients that are, let’s say, 45-50 miles away that are looking for a dentist, I’d like for them to be able to look at the website and look at what the practice looks like. And get to know our staff a little bit more, and what we can and can’t do for them, before having them make that trip out there.

There was also a transition letter that was sent out to all the active patients from the last five years. ddsmatch helped with that, but Dr. Dean and myself crafted it and then we sent it out to all the patients. So that was, I think, the biggest initial marketing plan that we had.

Looking for a Rural Dental Office for Sale? ddsmatch Can Help!

If you are considering a rural dental practice, here at ddsmatch Southwest, we have several available dental offices for sale in Texas and New Mexico, as well as across the country. Check out our listings online. Contact us today for more information— it starts with a conversation.

From the Other Side: A Doctor Discusses Buying a Dental Practice

We recently posted an interview with one doctor, Bill Dean, that we assisted with selling his dental practice. To shed light on the other side of the transaction, here is part one of an interview with the buying doctor, Kevin Shively, about working with ddsmatch Southwest, dental practice transition specialists, and his experience with buying a dental practice.

Could you please talk a little bit about your background and how you came to hear about ddsmatch?

My name is Dr. Kevin Shively. I’m originally from Louisville, Kentucky. How I came upon ddsmatch was, I was serving on active duty in the military in Germany and was contemplating my next step. I had found a job opportunity in Lubbock, Texas, that wasn’t everything that I was hoping it would be.

I had heard about ddsmatch when I was in dental school and it was a company that had interested me, and, ultimately, I knew that I was going to own my own practice one day. When I reached out to ddsmatch, they helped make that dream become a reality for me.

Can you just talk us through how the process went for you, from the time you first got in contact and how it proceeded?

Yes, absolutely. I accessed the ddsmatch website, the Contact Us portion, and put in some information, some basic information, name, things like that, email address. I was promptly called, I believe, within 48 hours by Andy. He started getting some background information on me, and trying to figure out exactly what I was looking for, and things like that. Because they don’t just help match up people wanting to buy practices, they also help find associateships and things like that. So, he was finding the best fit for me based on all those questions and everything. Going forward, we looked into some practices and went from there.

How long did the process of buying a dental practice take, from when you first started looking until you finally found a seller?

Well, it’s a little misleading, because I was dragging my feet. I had a little bit of cold feet in making such a big purchase. But all in all, I would say from the first conversation I had with Andy until the closing of the practice, no longer than about seven, eight months.

Did you look at several practices or did you find the right one early on?

Based on what my criteria were that I gave Andy, we found two that were the best fit for what I was looking for. At the time, with ddsmatch, there were several practices, but not within the Lubbock, Texas, area. And being that I had just moved halfway across the world, I wanted to stay in one place.

What were the major factors for you? What were the things that you felt were important to you in finding a match?

Well, you always have to trust your gut and your instinct on things … I toured both practices. I enjoyed and liked both practices, but I had a strong sense of one practice, which ultimately was the practice that I ended up purchasing. Once I started going through the numbers and doing the due diligence, it just further bolstered my decision to want to proceed with that practice.

Did you have any “deal-breakers” that you were looking out for?

I don’t really know if I had a whole lot of deal-breakers, this being my first time purchasing a practice. I had things that I really wanted in a practice which, going forward, if I were to do this again, they probably would have been deal-breakers. But with the practice that I ended up acquiring, it was, again, like the stars kind of aligned for me for that practice.

If someone were where you were a year ago, do you have any words of advice?

I would say it is a big step. There are a lot of unknowns, but it is a wonderful path to walk down. It is challenging work, but at the end of the day it’s extremely rewarding, and it really affirms my love for dentistry, with having patients that are extremely appreciative, and just doing what I love.

In terms of staff, do you have any thoughts on the experience of coming into a completely staffed-out and ready-to-go office? Has it been challenging?

Not so much. I learned early on in the military that a lot of change right out of the gate usually backfires on you. So, that was a lesson that I learned and implemented with this practice. I acquired all the staff from the outgoing doctor, and they were very, very hesitant and leery of the transition because change is hard for everyone. I think taking incremental steps in making changes has been very well received by the staff.

What has been your experience with the patients as they’ve come in and had a chance to meet you? What’s been your approach to making sure that you hold onto those patients?

Well, it is a small town practice. The city is only 3,000 people, but I pull from about 30 miles in any direction. Every day is a wonderful experience, in that the patients are so thankful. They are very appreciative. It’s very heartfelt. Here’s someone they don’t even know. I’m introducing myself, and the first thing out of their mouth is, “We are so glad you’re here.” And it’s such a rewarding thing to hear that.

Let’s back up a bit to the process of buying a dental practice itself. What did ddsmatch bring to the table to make the process easier for you?

As far as making the process easier, I could not have done it without ddsmatch. It’s one of those situations where you just don’t know what you don’t know, so Andy and Randy were absolutely instrumental in getting this whole thing going, as far as helping with going through the numbers, the due diligence, and they went beyond the scope of what they normally do to help.

They’re more than willing to do whatever they can to help. They’ll be the first to tell you, “Hey, this isn’t my area of expertise. Here’s my opinion, but I’m going to introduce you to so-and-so, who is the absolute expert in this.” Not only do they give you their advice, they set you up with professionals that have done this several times in the past and can guide you every step of the way. So, it couldn’t have been any easier using ddsmatch.

If someone else is in your shoes, and they’re trying to make the same similar decisions, trying to decide if they want to go with ddsmatch, what would be the selling points?

Well, my main advice with using ddsmatch is, they will guide you. They will help you in doing everything in the correct order … [If] you don’t have a strong business background, they can set you up with a CPA, with a business manager. If you’re wanting to change staff, they have connections with local dental assisting schools and hygiene colleges. If you need help going through the due diligence … It’s any and everything that you could need, they help you with. And if they can’t, they know the people that can help you with it.

Trust is a big deal. For anybody who feels like, “it’s just really hard for me to trust somebody in this situation,” what would be your thoughts for them?

The reputation of ddsmatch, in my opinion, is what can help bridge that trust gap, in that they’ve been around. There’s been, in my estimation, hundreds, if not thousands, of successful transactions and acquisitions using ddsmatch. The proof really is in the pudding, and it’s by far worked out for the vast majority of clients.

It sounds like you really felt like they had your best interests at heart.

Yes, absolutely.

With regard to the outgoing doctor, what was your timing in terms of transitioning him out and you in?

Well, mine was a little abnormal, in that I’m still in the army reserves. Uncle Sam said, you know, “You need to go to Hattiesburg, Mississippi, for 30 weeks,” right in the middle of my transition. It was a little bit of a hiccup and, admittedly, it threw the process off a little bit.

But Andy and Randy were awesome at communicating between myself and Dr. Dean, the outgoing doctor, and working out an agreement to where Dr. Dean would be an associate for me while I was serving my country. Again, it was a wrinkle in everything, but without ddsmatch I would not have been able to get the agreement in place, and get everything situated and done to allow me to go on that mission.

In conclusion, what would be the bottom line for your advice to a dentist in your situation?

The bottom line I would give anyone is, yes, purchasing and acquiring a practice can be scary, it can be a very daunting task. There will be pitfalls in areas where you can get tripped up very easily, but that happens with everything. If you buy a car, if you buy a house, things like that can occur.

ddsmatch knows where those pitfalls can occur, and they can help you navigate around them. They can help you network with other local dentists. They can help you network with people to help grow your practice, and help you to make it as smooth a transition as possible. Ultimately, ddsmatch will make your life so much easier in acquiring a practice.

Looking at buying a dental practice? Ddsmatch Has Practices for Sale

If you are considering buying a dental practice, we have several dental practices for sale in Texas and New Mexico, as well as across the country. Check out our listings online. Contact us today for more information— it starts with a conversation.

Hot Trends in Dentistry for Anyone Buying or Selling a Dental Practice

Wherever you are at in your career—whether you are looking at buying a dental practice, selling a dental practice, or somewhere in between—it’s a good idea to stay informed about dental practice and industry trends. If you are just starting out, you want your practice to be up-to-date. If you closer to the end of your career, you may want to boost the value of your practice by making it attractive to younger doctors who may be more aware of current trends. And at any time, it’s smart to see how you can improve your practice—either with tools that boost efficiencies, new technology, or ways to provide better patient care. To help out, we’re going to discuss some of the hot trends for dental offices in 2019.

3D Printers

3D printer technology is a major innovation that can have a huge impact for dentists. They can slash the time and money that you have to spend on the production of aligners, veneers, crowns, and tooth replacements. Owning your own 3D printer will allow you to manage production of these things on your own, without having to pay a third-party lab, which keeps more money in your pocket. You may need to hire someone experienced with the technology to operate the printer, but, in the long run, you may save thousands of dollars by being able to keep the production in house.

Additionally, by being able to produce items in-house, you will be measuring wait times in terms of minutes rather than days. A patient can have treatment completed in a single appointment whereas, if you rely on an outside lab, they will need to reschedule another appointment. This will be better for the patient and for your practice. It improves patient satisfaction and reduces your administrative costs.

If you are buying a dental practice, this is a great piece of equipment that you should consider acquiring.

Natural Products

More than ever, people are concerned about the materials they use, especially those they put into their mouths. Products like bamboo toothbrushes and charcoal toothpastes are becoming more popular. Consequently, practices that have integrated natural product options will attract patients for which these things are important. It’s a simple, low-cost change, and can easily be added to your existing marketing techniques. 

Even if you don’t want to fully commit to this, it’s a good idea to review the products you do have for the inclusion of unnecessary chemicals and see whether there are better options for your patients. Consider whether you can provide options that are healthier and more sustainable. 

Digital Impressions

Any dentist with experience knows the frustration of dealing with cracked and deteriorating casts. You don’t have to put up with this. Computer-aided design (CAD) and computer-aided manufacturing (CAM) software can be used to create more reliable impressions. The fact is, this is the way the industry is going, it’s simply a matter of whether you are coming along. New doctors are going to want this technology, so if you are looking to add a dental associate or considering selling a dental practice, you should consider this upgrade. It will make your practice more attractive. 

Laser Technology

Laser technology is a growing trend and for good reason. It’s a technology that has a major impact on the quality of patient care you can provide and its benefits are readily apparent to the patients. For this reason, it’s a good thing to consider if you are looking to add value before you sell a dental practice, if you are looking to expand your practice, and if you are looking for ways to add value after buying a dental practice. 

Among the many uses of laser technology, you can whiten teeth, remove tooth decay, repair enamel before filing, reshape gums, remove bacteria during root canals, and eradicate lesions. All of this makes your job easier and reduces the amount of time you have to spend on a patient. Less time in the chair also makes for more satisfied patients. Other patient benefits include less sutures, less reliance on anesthesia, reducing infections, less damage to gums for faster healing times, and less blood loss.

Group Practices

You don’t need to be told that consolidation of practices has been on the rise. However, the impending death of the individual practice has been greatly overstated. Group practices can be good for reducing costs but what makes you a good doctor may be lost in a more rigid corporate model.

That said, if you like the treatment side but hate the business end, you may want to consider selling your dental practice to a group practice. You can have a regular paycheck and lose the headache of running a business.

If you have an entrepreneurial spirit, however, you probably will still be best suited by buying a dental practice that you run on your own. 

Automated Patient Tracking and Management Software

Chances are you’ve already experienced this—getting appointment confirmation notices by text, pre-recorded follow-up calls, online portals for patients to schedule appointments and send and receive messages with your office, and using handheld tablets to complete forms. These things reduce the workload on your staff and, thereby, save you money. It also allows patients to manage their appointments and treatment on their own schedule, which is appreciated in an increasingly busy world.

ddsmatch Southwest Can Help You Know What is Best for Your Dental Practice

Here at ddsmatch Southwest, we are dental practice transition specialists and our nationwide organization has experience with hundreds of successful transitions from around the country. For ten years we have been advising doctors on how to best prepare for transition. If you are considering selling a dental practice in the next five years, we offer a free, no-obligation Practice Transition Assessment, part of which is helping identify areas of investment that will add value to your practice. Contact us today to find out how we can help you—it starts with a conversation.

Ten Steps to Buying a Dental Practice for Sale in Texas or New Mexico

This is the second in our series of articles about how to best be prepared to purchase a dental practice for sale in Texas or New Mexico. In this article, we’ll go through the major steps of a dental practice transition. While the process can seem overwhelming, once you’ve reviewed these steps, you may find it’s not as difficult as you think, especially once you’ve enlisted a team of trusted advisors.

Before we get into the details, however, we’ll briefly address the question of why to buy a dental practice for sale in Texas or New Mexico as opposed to starting a new practice. The main answer is because of the existing patient base. A successful practice that is up and running has a steady stream of patients, which means you have cash flow from day one. If you start a practice, you have to build it yourself. And if you start a practice in an area where there is already a dental practice on the market, someone else is going to buy it and you will be competing with them and their built in patient base. Depending on your career goals, you might not want to have to deal with the headaches of building a practice from the ground up, especially if you are a new doctor without an established reputation.

Step One: Put Together a Team of Trusted Advisors

As a doctor, you no doubt are a smart and capable person with a strong skill set. That said, no one person has all of the knowledge and experience to manage every detail of a dental practice transition. You need professional advisors who can help you make what is likely the most important (and complicated) decision in your career. You will need the following specialists:

  • Dental Attorney: you will need an attorney with experience in dental practice transitions. There are issues, and potential liabilities, that are unique to dental practices, so do not assume that a general practice or general business attorney will have the expertise. If they have to get up to speed, it will slow down the process, cost you more money, and you still won’t be certain that they aren’t overlooking important details. Find an attorney, with solid recommendations, that has counseled other doctors in the sale of dental practices. 
  • Dental CPA: as with the dental attorney, you need an accountant who understands the specifics of dental practice finances. You will need to rely on this accountant to understand the financial records they are reviewing in advance of making an offer and closing the deal. You need to know that they won’t misunderstand any details that may not be apparent to an accountant without dental practice experience.  
  • Dental Practice Transition Specialist: a practice transition specialist can be extremely useful for consulting on matters such as employee management and patient retention.
  • Dental Banker: dental practices are somewhat unique among business from a banking point of view. They require a lot of capital but are also very good investments for banks. A banker without experience with this type of business may not offer as favorable terms, failing to understand the particulars of dental practice valuations, where “goodwill” accounts for the bulk of the value. 

Step Two: Make an Offer with a Letter of Intent

This is your formal offer to buy a dental practice for sale. Before you make the offer, you should have reviewed the practice’s financial disclosures with your advisors and be comfortable with what is being offered. A letter of intent is non-binding, but it is a strong signal to the seller that you are serious about this deal. The letter should specify: 

  • The assets to be included in the sale
  • The assets to be excluded from the sale
  • The price offered for the practice
  • The closing date for the sale

Any item not addressed in the letter of intent should be negotiated and reduced to a written agreement before the closing date.

Step Three: Apply for a Practice Purchase Loan

Ask your dental CPA or dental practice transition specialists for recommendations to banks with professional practice lenders that have dental practice experience. You should submit applications to multiple banks so you can choose the terms that will be most favorable for your deal. The earlier you get started on this process, the better, so there is no holdup on your end in closing the deal. 

Step Four: Insurance Policies

What insurance you will need will depend in part on the other parties. If you have a landlord, they may have business liability insurance requirements you have to meet. The seller may have their own requirements, as will the bank. Generally, when you buy a dental practice for sale in Texas or New Mexico, you will likely need:  

  • Malpractice insurance
  • Life insurance
  • Disability insurance
  • General business liability insurance
  • Personal property insurance

The application processes for these may take some time, so, again, the earlier you get started, the better. Your team of advisors can also help you know what you should be looking at and may recommend some insurance companies to go to for coverage.

Step Five: Establish a Business Organization

If you haven’t already, you will need to set up a company. What kind of company you organize will vary from state to state, as local laws will govern what kinds of business organizations can operate what kinds of businesses. You’ll also want to consider how you will be personally liable for taxes or liability in lawsuits with each organization. Discuss your options with your attorney and CPA and pick the type of organization best suited for your situation. These are typically pretty easy to set up yourself and it can often be done online through the state government website. 

Step Six: Have Your Dental Attorney Review the Practice Purchase Agreement

This is the document that details the terms of the purchase. If a detail is not in this document, it is not a part of the deal and, therefore, not enforceable. Review this document closely and have your dental attorney explain its provisions, making sure you understand each part. This document should address:

  • The seller and buyer’s respective representations and warranties
  • The assets that are included in, or excluded from, the sale
  • Who will control the patient records
  • The scope of the non-compete covenant (time and geographic distance)
  • The collecting of the seller’s accounts receivable and patient credits
  • Procedure for handling any repair of defective dentistry
  • Allocation of the purchase price for tax purposes
  • Ongoing contractual obligations or liabilities
  • The firing and hiring of staff
  • The transition letter notifying patients that the practice has been sold

Step Seven: Office Space

If you are buying an existing practice, the selling dentist is either leasing the office space or owns it. You will be either taking over the lease, buying the space, or leasing it from the seller. In any of these circumstances, these are details that need to be worked out with your dental attorney and are separate from the practice purchase agreement. It is important to understand that the purchase of the practice does not include any rights to the office space. That needs to be negotiated on its own.

Whether you want to lease or buy the office space will depend on the practice, the location, and your goals for the practice. Discuss these matters with your attorney, CPA, and practice transition specialist. They can each help you understand that benefits and drawbacks of your options.

Step Eight: Sign the Documents and Take Ownership

Once all of the details are solidified and you are in agreement with the terms of the deal with the buyer, you sign the documents and submit them to your lender. Once the bank has the signed documents, they can finalize the lending process and transfer funds to the seller. When that happens, you can take ownership of the practice. 

It’s not uncommon for the sale to remain confidential to this point. Therefore, after this point, you can have a meeting with the dental office staff and start the process of taking over the practice. 

Step Nine: Send a Transition Letter to Patients

As mentioned above, a major advantage of buying a dental practice for sale is having a built-in patient base. Once the sale has closed, that is the time to let patients know that the dental practice will have a new doctor. This is the opportunity for the selling doctor—who has the trust and confidence of the patients—to endorse you as the new doctor. This letter can be drafted and agreed to before the deal closes, which may be a good idea so there is no conflict when it comes time to send the letter. Your dental practice transition specialists can provide guidance and advise as to how to compose the letter and its contents.

Step Ten: Staffing, Billing, and Licenses 

Once the deal is closed, all of the things owned and controlled by the seller’s company have to be transferred to yours. This means the seller will terminate his employees and you will hire them to your company. Utilities and other service contracts will have to be assigned and decisions made about pro rata payments, if necessary. You will need to make sure that you are in compliance with all local, state, and federal licensing and registration requirements. Again, your dental attorney and practice transition specialist can help you identify these details.

ddsmatch Has Dental Practices for Sale in Texas and New Mexico

If you are looking to buy a dental practice for sale in Texas or New Mexico, ddsmatch Southwest has several appealing options. Check out our available matches online. If you are considering transitioning your practice in the next five years, contact us today for a free, no-obligation Practice Transition Assessment and find out what we can do for you.

Prepare to Buy a Dental Practice for Sale: First Steps

At ddsmatch Southwest, we are dental practice transition specialists who focus on matching the right buyer for doctors who have placed a dental practice for sale in Texas or New Mexico. We believe that the right match is important because a successful practice transition is one where the practice continues to thrive, protecting the legacy of the selling doctor and providing the buying doctor with a solid foundation on which to build their own legacy. Because of this, we believe it is important for the buyers in the practice transitions we facilitate to be well prepared and well informed, with everything they need to have confidence in both the practice they are buying and the fairness of the transaction. 

To this end, we will be posting a short series of articles about how to best be prepared to purchase a dental practice for sale in Texas or New Mexico. In this article, we will provide a brief overview of the first steps of the dental practice transition process, from the buyers point of view, and some general principles to keep in mind. 

Assemble a Team of Advisors

After you have decided the time is right for you to buy a dental practice, and have an idea of where you would like that practice to be, you should identify and retain a small group of trusted advisors to counsel you through the process. This should include, at least, a dental CPA, a dental attorney, and a banker with experience lending for dental practice purchases. You may also want your own dental practice broker.

You may wonder why you can’t use your family member who is a respected attorney or a friend who is a CPA. While these types of contacts may be great for general purposes, you need advisors who understand the particulars of dental practices and the accounting and legal issues that are unique to your industry. You don’t want something important overlooked because your CPA didn’t recognize its significance. And you don’t want to pay an attorney’s hourly rate while they get themselves up to speed on an issue. You’ll save money and time by retaining specialists with experience.

Before you get anything but the most cursory information about a dental practice for sale, you will be required to sign a non-disclosure agreement. This agreement will protect your personal and financial information, as well as the selling doctor’s, and will protect the dental practice from staff and patient concerns if knowledge of a transition is leaked too soon. It’s a good idea to have your own dental broker or attorney to help you review and understand the agreement.

Have a Realistic Idea of What You Can Afford (and Need the Practice to Earn)

In 2018, the average dental student graduated with over $285,000 of student loan debt. When you are buying a dental practice, you have to consider both what you can afford to buy and what you are going to need to earn to cover the practice’s expenses, pay off the practice loan, keep paying on your student loans, and still have enough for your personal expenses and savings.

Depending on the practice, you may need some operating capital to keep things going in the early days after the transition. You may also need to compensate the selling dentist if you both agree it will be mutually advantageous to keep the doctor on for a period. A dental CPA and a dental practice broker can help you better understand how to look at a dental practice for sale and see its potential—or its problems. A banker with dental practice experience can also discuss with you how much you might expect to be lent for the practices you are considering.

Know the Value of the Existing Dental Practice Staff

When you are buying a dental practice, you are also getting the existing employees: hygienists, billing staff, receptions, etc. Although you will be the doctor, they are the ones that really know the patients and how the practice runs. Their institutional knowledge will be invaluable to you, both during and after the transition, to keep the operation running smoothly and help the patients feel comfortable with you, the new doctor. It is imperative to show them respect to help the transition be as smooth as possible. It’s a big change for them as well!

See It for Yourself

Every dental practice is different. You won’t really know what the practice is like until you can experience it in person. You also will want to look closely at details indicating the health of the practice: how many patients have visited the office over the past 18 months, whether the practice is appropriately staffed, patient flow, and cash flow. Those last two items, in particular, can show you whether a practice is growing, stable or shrinking. If the practice is underperforming, there may be some untapped opportunities for growth.

Look Closely at the Practice’s Financials

The asking price may not reflect the actual value. Many people tend to overvalue their assets because of their emotional attachment to them. Dentists are no different. The price of a dental dental practice for sale in Texas or New Mexico should be a reflection of its value based on sound accounting and valuation methods, not a reflection of what a doctor has put into the practice. Have your team of trusted advisors review the financial information with you to help you understand what it really says about the practice and whether its in line with what a business of its type should be doing.

Understand What Is and Isn’t Part of the Deal

If a selling doctor is asking $750,000 for a practice, you need to understand what you get for that amount. That may not include the equipment. It probably won’t include the accounts receivable. If the doctor owns the building, and you want the building as part of the deal, that can be a separate transaction and will definitely be a cost in addition to the practice sale price. If you have to purchase a lease, that will also have to be negotiated.

The selling price is a good place to start, though. If you and the selling doctor can reach an agreement on the sale price, usually negotiations on the other aspects will be smoother as both parties are motivated to complete the deal.

Be Wary of Owner Financing

Simply stated, a bank is more objective. Banks certainly have an interest in the money they lend—they want it back with a return on that investment. But this means they will perform a thorough due diligence relying on independently verifiable information. In a seller-financed deal, the seller is less likely to have a third-party valuation of the practice and asking price. They are likely looking to finance their retirement out of the sale and want to capture the interest as well as the principle. This can result in them trying to get a certain number rather than the true value of the practice. 

Consider the Value of the Seller Staying On After the Transition

It is common for the selling doctor to remain working in the practice for a period after the transition. This can be useful for helping to ease the transition for the patients, the staff, and the new doctor. It can be an attractive option for a doctor who is not ready to fully retire but wants to be rid of the business responsibilities and just focus on patient care, perhaps with reduced hours, before fully stepping away. Occasionally, however, it can indicate a seller who wants to have their cake and eat it too: sell the practice but not really have to give it up. Discuss this with your advisors. But be wary of a doctor who is proposing a period in terms of years, rather than weeks or a few months.

We Have Available Dental Practices for Sale in Texas and New Mexico

As stated, as ddsmatch Southwest, we focus on finding the right buyer for dental practices we have available for sale in Texas and New Mexico. If you are ready to make your move into practice ownership, check out our listings. If you see any your are interested in, or have any questions, please contact us— it starts with a conversation.

Should I Sell My Accounts Receivable when Selling a Dental Practice?

When selling a dental practice, there are a lot of things to consider and details to manage. Among those are how to value your practice. However, one thing that is generally not factored into the selling price is the accounts receivables. Accounts receivable are the amounts owed by patients who have been provided service but either they or their insurance (or some combination of the two) have not yet remitted payment. Accounts receivable are generally handled as a separate item as a transitioning dentist may or may not want to make them part of the deal.

Similarly, when buying a dental practice, the buyer might not want to buy the accounts receivable because they can impose an unwanted administrative burden and cost. Typically, however, it may be to the advantage of a buyer to try and get them. They are usually sold at a discounted rate (for reasons explained below) and can provide a source of operating capital from day one as opposed to borrowing additional funds from a bank.

In this article we’ll discuss the three basic options you have when and the advantages and drawbacks of each. Whether you ultimately decide to sell or not sell your accounts receivable will depend largely on the particulars of your practice and, importantly, the counsel of your financial adviser and dental practice transition specialist.

Sell the Accounts Receivable

If you include the accounts receivable when selling a dental practice, you are doing two things. First, you are releasing any claim you have on payment for work you did prior to the sale. It now belongs to the buyer. Second, you are also getting rid of the responsibility of trying to collect those outstanding payments. Under this scenario, you get to walk away with no further responsibility with regard to the accounts (except having to possibly endorse some checks over to the buyer).

As mentioned, this can be advantageous for the buyer who can use the funds as operating capital. If your buyer has reached the limit of their borrowing capacity, this can be a good way for them to make sure they have funds to keep the practice operating in those early days after the dental practice transition. If they need the accounts receivable for this reason, it may also be to your advantage to sell them, to ensure that the sale closes.

And while you will receive some compensation for the sale of the accounts, it will not reflect their full face value. This is for two reasons. First, simply stated, an agreement by a patient or insurance company to pay for your services is not the same as cash in hand. There will always be risk involved in collecting payment and this risk is reflected in the discounted rate. If you use dental accounting software, you probably know that it groups your accounts receivable into different categories, 0-30 days outstanding, 31-days days, 61-90 days, and so on. The longer the account is outstanding, the less likely you are to collect, and the more expensive it will be to do so. So a buyer may offer 85% for accounts that are due in 30 days or less, 75% for 31-60 days, 50% for 61-90 days, and so on.

The second reason, acknowledged above, is that there are costs involved with collections, costs which increase with each billing cycle. This will be discussed in more detail below.

Don’t Sell the Accounts Receivable and Have the Buyer Collect Them

If, when selling a dental practice, you and the buyer choose to not make accounts receivable part of the overall deal, you still have to have someone collect on those accounts. Basically, this can be either you or the buyer. Administratively, this is a more complicated option, but it means you get to keep the payment for the work you actually did.

Two things have to be considered. One, how the buyer will keep your accounts separate, making sure you get the funds that belong to you. The administrative staff will have to keep track of your accounts and the new doctor’s accounts separately. This will become increasingly complex for patients with ongoing treatment that you started and that the buyer is completing.

Second, when buying a dental practice, the buyer may not relish the idea of running a collection and accounting office for a retired doctor. The new doctor will be incurring the costs of collections and will rightly expect you to compensate the practice for this work out of the money being collected. Some of the expenses (in terms of either employee time or actual money spent) may include: electronic statements or paper statements, electronic claims (or in rare cases manual insurance claims), postage, labor, phone calls, secondary insurance submission, and communication time with patients or account holders. These costs can take between 5-12% of the revenue being collected, with an additional 5% convenience fee (that is, you are paying for your convenience and the practice’s inconvenience), and an uncollectable debt percentage of 3%. Therefore, you could reasonably expect about 83-85% of the money that is actually collected.

Whether this is more advantageous than simply selling the accounts receivable along with the dental practice will depend on how much you have outstanding, how long its been outstanding, and who is obligated to pay (insurance companies likely being more reliable than individual patients).

Keep the Accounts Receivable and the Responsibility for Collecting

Under this option, your only costs are your own and you get to keep everything that ultimately gets paid out, less whatever administrative costs you incur. This option is really only best in circumstances where you have a minimal amount of accounts receivable and from sources that are likely to pay.

Resources are also a factor. You may be able to do it all yourself. You may also be better off just paying your (former) administrative staff to work on the project on their own time. It is also most easily done in circumstances where the person selling a dental practice is staying on in the practice for a period of time after the dental practice transition.

Get Expert Advice on Selling a Dental Practice 

A big takeaway you should get from this article is that there are a lot of factors particular to your dental practice that will determine whether selling the accounts receivable is the smart move. For help in navigating this decision, you should rely on expert advisors with experience in dental practice transitions who can help you identify and weigh your options. 

Here are ddsmatch Southwest, we are dental practice transition specialists with experience in hundreds of successful practice transitions from across the country. We find out what your goals are for your transition and bring that experience to bear to help you meet those goals. If you are considering transitioning your practice in the next five years, we offer a free, no-obligation Practice Transition Assessment, including advice on how best to prepare your practice. It all starts with a conversation. Give us a call today and find out what we can do to help you. 

Dental Practice in Rural Areas: Better for You and Your Bottom Line

Typically, the plan for a recent dental school graduate is to practice in a suburban area around an urban city. A dental practice in a rural area is seen as less appealing. However, what young doctors are finding out is that these areas are already at or over capacity for dental practices and doctors. This means more competition for jobs and patients, lower salaries, and limited opportunity for growth. More often, practices are resorting to extended and weekend hours to try and capture more patients. Costs of living are higher. Participating in PPO plans may be necessary if the competition is doing it (especially when considering student loan debt, practice loan debt, and overhead and personal expenses).  So while the urban area may appear to offer more in terms of lifestyle, dentists practicing in these areas may not be able to enjoy those supposed benefits as they imagined they would.

Below we discuss some of the advantages of dental practices in rural areas. But don’t just take our word for it, read what a recent satisfied ddsmatch Southwest client has to say about his career in a Texas small town.

Dental Practice in Rural Areas Provide More Economic Opportunities

While high-density areas leave dentists scrambling for jobs and patients, and established dentists may have deferred retirement due to economic conditions, dentists in small towns are experiencing the opposite. Most small town dentists are doing quite well because they don’t have the same kind of competition. In fact, many rural areas are underserved, making patient demand for dental services high in comparison to urban areas. 

Dr. Bill Dean, recently used ddsmatch Southwest’s dental practice transition specialists to help him sell his practice. In a recent interview about his practice transition, he noted this benefit of small town dentistry,

“We’re a town of about 3,500 people, but we’re about 50 miles from Lubbock. It’s the nearest town, large town. And, I have a drawing area of probably 20,000 patients and coming from three or four different counties that don’t have dentists, and it’s hard for young dentists coming up to realize that they can come to a real community and have an instant practice when they start out.”

“Particularly if they’re buying a practice. There’s a ready-made client base that they can go to work from day one and be busy. They don’t have to try to develop a clientele, and they get to know their patients and the patients . . . Once they’ve won a patient over they will tell all their friends, and it just is an ongoing process of good people.”

Small Town Overhead with Urban-Level Fees

Fees charged by dental practices in rural areas are comparable to those charged in suburban and urban areas. But the overhead is much lower. A small town practice typically has its overhead expenses in the 50-55% range. Two major factors are lower wages and lower real estate or lease costs. Combined with less competition (meaning you save in your marketing costs as well), this means higher profits for your practice, and more money in your pocket. The faster you can accumulate wealth, the sooner you can retire, and the easier it will be to do on your own terms.

Dr. Dean also addresses the belief that being in a small town might make you feel isolated. To the contrary, given the realities of transit in sprawling urban areas, his access to larger city amenities wasn’t an issue, and the increased opportunities to earn and own a practice are accelerated by the built-in clientele and lower overhead:

“Lubbock is a town of about 200-and-something-thousand people, Texas Tech University is there, and they’ve got everything you could want. It’s 45 minutes away. If you’re living in Houston you may drive an hour to go eat somewhere and if you’re living in Floydada, you could be anywhere in Lubbock within an hour, and you’ve got anything you want. You got a major airport that’ll get you where you want to go, and, as I said, you’ve got an instant practice the day you open up your doors and in a large city you have to work to get people to come in. Or, go in as an associate and work for five years before you can actually become a partner.”

Student Loan Forgiveness Programs

Because many rural areas are underserved, some state agencies have established loan forgiveness programs based on the number of years a doctor practices in one of the underserved areas. So, in addition to earning more, you can also work to reduce your debt faster than otherwise, accelerating your savings. Some of the programs may require participating in Medicaid. Visit ADA.org for more information.

Small Town Life Style

Many dentists who do practice in more densely populated areas grow tired of the tough economics of urban life, the competition, and the stress. These are factors that are intrinsic to city life. We’ve discussed above how a dental practice in rural areas can increase your income. It can also greatly decrease your stress while increasing job satisfaction. 

The slower pace of life allows to you both be more flexible in your schedule and to get to know your patients better. Creating a personal bond who those to whom you provide care adds an additional dynamic to your work day that can make it more enjoyable, and less of a chore. You also will have more time to enjoy the things that make life worth living, like friends and family, and hobbies and recreation. The ability for better life balance will reduce the likelihood of burnout.

Additionally, you can enjoy the esteem of your community. A dentist is a valued member of the community, providing a valuable service. You can be seen as a respected professional whose advice is valued. Diagnosis and treatment plans are more readily accepted by patients who know and trust you. 

Dr. Dean confirms these benefits. Speaking of the doctor who bought his practice, Dr. Dean noted that he was looking specifically for 

“[s]omeone that would be a part of the community, that was more than just drilling and filling and seeing patients. And, [Dr. Shively, the buyer, has] been with a corporate firm in Lubbock for the last six months and it wasn’t a matter of getting to know the patients, it was a matter of production, and Dr. Shively didn’t like that, didn’t want that. He wanted to be a part of the community. . . .

“He said when he came out there was little league baseball playing, and he said that’s what he’s looking for, and, you know, that’s what I’ve had for the last 27 years. We’ve known for two months . . . that Dr. Shively was taking over, and that I would be leaving. And, the last two months with patients have the most humbling and rewarding of my entire career. The patients just saying, ‘we appreciate you and love you,’ and that’s what dentistry’s all about. It’s getting to know people. . . . 

“Probably half of my patients call me Dr. D., the other half call me Bill, because I go to church with them, or I’m on the school board. I’m just one of them. Particularly for these that, like the Davidsons, where I see their kids and grandkids and great grandkids, they’re really more family than they are patients. And that’s the beauty of working in a small town. When you leave the office you may see them at the grocery store, you’re going to see them at the football game, or the basketball game.”

ddsmatch Southwest Has Rural Practices Available Now

The dental practice transition specialists at ddsmatch Southwest have dental practices in rural areas in Texas and New Mexico ready for buyers. If you are looking to start your career, or are looking for a change of pace where you can own your own practice and enjoy the benefits of that ownership, take a look at our available practices

If you are considering transitioning your practice in the next five years, we offer a free, no-obligation Practice Transition Assessment during which we’ll our experience to work for you, advising on how best to build value and get ready to transition on your terms. Contact us today.