Dr. John Ward has over 40 years experience providing dental services in all phases of dentistry and all ages—ranging from 18 months to 99 years of age. When presented with an opportunity for selling a dental practice, he put his trust in ddsmatch Southwest. Below, Dr. Ward explains in his own words, why he trusts ddsmatch Southwest and why you should too.
How did you come about deciding it was time to sell your practice?
I’ve known Andy [Edmister] since he was in college, and he now has a daughter in college, so I’ve known Andy for a long time. Andy came into my office one afternoon, the Thursday before Labor Day of 2014. At the time, Andy was selling large dental equipment, so I thought Andy was coming in to talk to me about selling a quarter of a million dollar x-ray unit. Andy walked in, said, “Doc, can I talk to you?” I said, “Sure.” We walked back and he said, “I’ve been working with the sale of Dr. X—I’m not going to use her entire name—Dr. X’s practice, and she said you might be interested in selling your dental practice.
At the time I had two full-time jobs. I was working my dental practice, and then on weekends I was driving 200 miles to work in a federal prison in Pecos. My normal routine was Tuesday, Wednesday, Thursday, Friday until 1:00 in my practice, take an hour’s break, drive 200 miles and then work 50 hours over the next three days, three-and-a-half days, and then do that week after week after week.
I looked at Andy. He said, “I heard you were interested in selling your practice,” and I laughed. We had a calendar on the board, one of those permanent calendars you erase and mark in. What I remember was that Labor Day was September first. I had September, October, November. I pointed to the last Thursday in November and I said, “Andy, in the next three months, that is my day off. I have one day off, Thanksgiving, in the next 91 days.”
Andy said, “I have a young man who might be interested in purchasing your practice.” And I said, “Well, I have no interest in selling my practice, but I have no interest in not selling my practice.” He said, “Well, he’d like to take a look.” I said, “Okay, Andy.” I was going to be heading to my other job the next day, so I said, “Here are the keys. You’re welcome to come in, look around the practice, see what you want.” Because I knew Andy, so I didn’t have any problem with the trust issue. I said, “Talk to me later.”
As it turned out, about four or five days later Andy stopped back in and said, “The young man is interested in buying your practice.” At the time, I owned the practice and I owned the building. Andy said, “Are you interested in selling the practice?” I sat there, sitting in a room with Andy, and I said, “Okay, Andy. If I sell the practice I’m selling the building. I don’t want to be anyone’s landlord.” What I didn’t want was if someone bought the practice and six months later walks out and I’m stuck with it, or if someone wants some changes in the building, and then you’re arguing over whose issue this is and that is.
I said, “Andy, here’s my number. This is what I want to walk away with.” I said, “I want full price for the building because it’s in a great location and there’s no need for me to give a bargain on that.” But I said, “I’m going to give a bargain on the practice because the equipment, even though it’s great equipment, is older equipment, and in the next three to five years he’ll have to replace a certain amount of it. I don’t think it’s fair that he should pay top price when he’s going to have to do that.” Andy said, “Sounds good to me.”
I said to Andy, “Andy, I don’t care. I don’t know what your percentage is, I have no idea, but this is what my number is.” Andy said, “Okay.” Then, over the next eight weeks, Andy worked very hard to put the package together. There was some issues going on because, since I had not planned to sell the practice, I had not prepared all the financial stuff. When they went to the bank, the bank wanted certain stuff that I had not prepared because, as I said, it was not my original intent to sell the practice.
Andy worked very hard to get all that together to obtain that, to help me to put that whole package together, so that the buyer could go to the bank and present it. Once we knew what the bank wanted, it was very easy in putting the package together because it was a solid, profitable practice. Part of it was based on my tax statement. You get towards the end of the year, you’re thinking, “Okay, I’m going to pay this much in taxes, so I need to buy this and do this so that I lower my tax liability.” The bank was looking at some of that thinking, “How could you be so profitable and have this tax setup?” Because I’m smart enough to know that I don’t want to pay taxes. Andy worked with me to get all the correct numbers so that when it went to the bank, it was an easy flow.
I then sold the practice on the first Monday of November. This went from essentially the beginning of September to the beginning of November, which was a two-month timeframe. Andy put this whole package together. When I left the practice, I then was working only in the prison, and that was pretty nice because now I had a pretty sweet job, only working one job.
Then at the end of July of 2017, the prison closed, and now I’m in East Texas, in Longview, Texas, working in a very busy fast-paced practice. Andy has come to me a number of times and said to me, “Doc, if you’re looking for any positions, I have positions open. I have positions available, and you know that I’d be tickled pink to move you into one of those.” I said, “Andy, right now I’m in a great position.” Andy has always been very, very supportive, very thorough, very proactive. I thoroughly, thoroughly enjoyed the process. He made it easy for me, and I couldn’t think of a better person looking in retrospect to have handled that than Andy. I give him all the kudos in the world because he handled that with smoothness, with grace, with intelligence. It was handled very, very well.
It sounds like you would definitely recommend them ddsmatch Southwest for selling a dental practice.
Oh, I would definitely recommend, definitely.
As a seller, what do you think are the main reasons that someone should choose ddsmatch Southwest?
Andy handled everything on a very personal level. Your issues were his issues. He did a really good job of balancing the concerns of the buyer versus the concerns of the seller. I know in my case he picked out a young man whose desires were very compatible with my practice. He helped the young man when the young man was running into some barriers because of what I supplied being much more rudimentary than most people would need. I will tell you that he’s not going to let anyone else get away with what I did, but Andy knew me on a personal level. Andy handled it from both sides in order to make it easy for the young man to be able to obtain the loan and for me not to have to get overwhelmed with all kinds of paperwork and bureaucracy.
It sounds like Andy is pretty patient and that working with him was very comfortable.
Very comfortable, very comfortable.
What kind of advice would you give to people thinking of selling a dental practice? Looking back, is there anything you wish you would’ve known?
Like I say, I was very lucky because Andy handled this for me. The funny thing was that I had known Andy for years and Andy was a friend. I don’t think I appreciated that, and it’s not a bad thing. Let’s put it this way, looking in retrospect, I appreciate more how hard he worked and how he was in my corner looking out for me, because I really had no idea on anything. Mine was, okay, all of a sudden one day I’m working and the next day I’m selling my practice. I just happened to find someone … and this is the way Andy is.
Like I say, I’ve known Andy for years. He’s an honest, straight shooting, very heartfelt person. He’s looking out for your best interest and he did that with me. On the other hand, he looked out for the best interest of the young man who bought the practice. I don’t think the young man who bought the practice appreciated that until he had the practice for a couple of years. I think it finally occurred to him, especially as he started talking to friends of his who had purchased other practices and who had used other brokers and realized those people weren’t looking out for my best interest. Andy did a great job of the balancing act and looking out for both the buyer and the seller.
As I said, the thing that was amazing with me was that I absolutely knew nothing, but absolutely had an amazing experience, and that’s because Andy took good care of me. Looking back, I wouldn’t know … Like I said, because it was handled so well, the experience was a totally positive experience.
He’s a good guy. He looks out for his clientele.
Selling a Dental Practice is Better with ddsmatch Southwest
Just as with Dr. Ward, ddsmatch Southwest can help you both prepare for your practice transition, and throughout the transition itself. First, we offer a free, no-obligation Practice Transition Assessment. If you are considering transitioning in the next five years, we’ll meet with you, look at your practice, and discuss what you should be thinking about with your specific market and whether there are investments or improvements that will get you the most out of your sale.
Second, we’ve assisted hundreds of dentists from across the country transition their practices. We’ve taken that experience and created a Trusted Transition Process—a clear, consistent path to selling a dental practice while maintaining the legacy you’ve worked so hard to build.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2018/10/3-selling-a-dental-practice_HERO.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2018-10-17 05:00:532018-10-31 18:46:49One Dentist on How ddsmatch Southwest Came Through in Selling a Dental Practice
Anyone with experience with putting up their dental practice for sale will tell you that you need an experienced team of specialized advisors: dental brokers such as ddsmatch Southwest, a dental CPA, and a dental attorney, at the very least. There are too many details that require expertise and, frankly, this is too important to let any detail slide. Below is our recent conversation with David Cohen, a dental lawyer, of the Cohen Law Firm in Dallas, Texas, giving his perspective on what dentists considering transitioning their practice should consider and why a broker is a crucial member of your team.
Please tell us who you are and what you do for doctors with dental practices for sale.
My name is David Cohen. I own a law firm that specializes in helping dentists and specialists from a legal, transactional business perspective. What that means is I do a lot of practice transition work. I help draft and review contracts in connection with practice sales and purchases and partnerships. I also work a lot on business formations, business structuring, real estate in terms of buying and selling real estate and review of leases. Those are the main things that my practice specializes in. We have clients all over the country, and we’re well known for being very expeditious and responsive.
Primarily dentists then?
Correct. 99% of our clients are dentists.
How was it that you came to have a relationship with ddsmatch Southwest?
I just ran into Andy [Edmister], I think, at the Texas dental meeting, and we hit it off and we just talked about doing some work together. Andy gave me an opportunity on one of our transactions that went really well, and so we’ve worked on other transactions together.
What has been your experience working with Andy and ddsmatch Southwest?
The experiences have been great. Andy’s a really hard worker. He’s incredibly expeditious. He’s on the ball, and he really does everything he can for the client, but he also understands the full transaction and the scope of it, and that it has to work for everybody. He does his best to make sure that it does work for everybody, and I think in the end that that provides a really successful transaction that closes and optimizes the opportunity for it to close.
Have you done both seller transactions where you’re advocating for the seller and for the buyer, or do you generally do one or the other?
I don’t represent both at the same time typically, but I am sometimes on the buyer’s side and sometimes on the seller’s side. It just depends on the transaction. I’ve done both.
What’s your advice from a legal standpoint for a dentist who is to put up their dental practice for sale, or is even just starting to think about selling their dental practice?
I think there are two primary pieces of advice that I would have for that particular individual. Number one is make sure that they’re ready to sell. I’ve dealt with some sellers in the past that think they may be ready to sell, and they’re not, and it ends up being time-consuming for all parties involved. There’s time, money, and headaches for that particular doctor as well. They get to the finish line and realize it’s just not for them. Now, sometimes it just takes getting to the finish line for them to realize that, there’s no way around it, so I’m not knocking them. But if they can do the best they possibly can to begin with to really do some soul-searching and make sure they’re ready to sell, I think that’s extremely important before they start paying legal fees and spending their own time and money, and also other people’s time and money.
The second piece of advice that I would have is to hire a good team around you. That’s really important to know that you can’t do everything yourself. You specialize in dentistry, and even if you specialize in other areas, you probably don’t have the requisite time to do everything properly. It’s really important to have a team that’s dental specific, in my opinion, and really lean on them to help you. A team could consist of people like ddsmatch [Southwest] and Andy, or a lawyer, or a CPA, an insurance agent if they’re on the buying side—they need insurance, they need to get credentialed. Or a bank if they’re buying.
When you say, “Make sure they’re ready,” are you speaking about being emotionally ready? Or are you speaking about financially?
I think it’s all of the above. I was referring a little more to the emotional side of it, but I think it’s important to have all of the physical things ready. The office ready, or the records ready, and all of that. And I think that also comes down to surrounding yourself with the proper team, because those people are going to help you be ready from an operational standpoint to sell, but the doctor—only they can be ready from an emotional standpoint. I think it’s really important. It’s hard for anybody to let go of a business that they’ve operated, particularly for a number of years, and so there’s nothing wrong with that. But you really have to do some soul-searching and recognize if you’re ready to let go. Because if you’re not, you can either come to the end of the deal and have spent the time and the money, and that goes to waste because you’re no longer doing the deal.
But also it can kill a deal, because then you may not be as realistic about having a fair deal or thinking, “Well, I need to go work for 10 years for this buyer afterward, because I don’t want to let go and I want to continue to do this.” Now of course, there are different transactions and every one is unique in its right, and from time to time, you’ll get a seller who says to a buyer, “Hey, I’m looking to sell, but there’s one condition. I need to work for X amount of years. I know that might be more than the norm, but that’s just what’s going to work for me.” And that does happen from time to time, but in my extreme example, it just wouldn’t be realistic on a normal basis for a seller to think that they would just be retained for 10 years by a buyer to continue to work. Again, unless it was unique circumstance like an investment practice or something like that. So it’s important to be ready for those reasons.
What is something that sellers sometimes overlook as they prepare to transition their practice?
There’s one key thing I can think of that’s outside the box that sellers need to be prepared for when they sell a practice, and it’s very important because it can affect in an adverse manner the value of the practice that they sell or their ability to sell at all. And that is, if they have associates in the practice, make sure that they have an associate agreement in place with those associates. Now that sounds like a no-brainer, but there are a lot of doctors out there that don’t have associate agreements with their associates. So it’s important to have that agreement, not only because you want to protect yourself as an employer, but also you want to have a non-compete, so long as you’re in a state where non-competes are valid and enforceable against associates.
Because if you don’t, even if you’re not in fear of that associate competing, the buyer’s going to want that. And if the buyer believes that the associate can open up next door, and that associate has goodwill in the practice because they don’t have a non-compete, then that’s going to be problematic and the buyer is either not going to buy the practice or say that it’s not worth as much, and try to negotiate the value of that practice down. It can be a mess to try and get associates to sign non-competes and associate agreements after the fact, because they really don’t have any incentive to do it unless they’re dying to have a job and they know that the buyer’s going to retain them. Then, maybe they’d be willing. So, long story short, if there’s one thing outside the box that’s really important—even if a selling doctor does not feel they need an associate agreement or they’re not worried about their associate competing—it’s really important for preservation of value of the practice that they’re looking to sell to have that in place.
If we’re talking about both buyers and sellers, what are things that might not be on their radar that they should be considering?
I think the one thing that people need to understand when they’re going into a transaction is that, particularly in the dental world, is that a transaction has to work for everybody in order to be successful, and if either side comes into the deal wanting to scrap for every inch for themselves and don’t understand that there’s another party involved, it can make for a very difficult transaction. And it can actually cause tension between the parties to the extent that if you’re a buyer and you’re being a pain, the seller won’t have the incentive to help transfer that good will after the closing to the best of their ability. Of course, they have to per the contract, but you want, as a buyer, the seller to go out of their way, above and beyond, to help you transfer the good will in the practice and have a smooth transition. On the seller side, you want to make sure that the buyer’s comfortable and that the buyer feels good about the deal.
So that’s really important, to have realistic expectations and understand what negotiation is all about. In my opinion, negotiation is all about making sure that you’re getting more of what you want, but that the other side is, not below the status quo, where it’s not a win or lose game.
Negotiation’s not about winning or losing or beating the other person, it’s about getting more of what you want in the deal, and I think that’s really important. People can lose sight of that from time to time. For instance, I’ve seen sellers say that they are going to sell, but then if the buyer decides that they might sell their practice to somebody else that the seller gets to swoop back and take it back. Well, that could obviously limit the market ability of the buyer, and so it’s not something typically buyers want to do. That causes problems both from the perspective that (a) the seller doesn’t want to let go, as we’ve already talked about at the beginning of this interview. But (b) it also is an unrealistic expectation that is not about getting more of what you want, it’s about taking as much as you possibly can and having a foothold in everything even after the transaction. So that’s just one example of maybe overextending or having unrealistic expectations in the process.
I think the biggest thing that people need to understand when they go into a deal is that it’s important to get more of what they want in the deal, but it’s not about winning and losing. It has to work for everybody or it’s not going to work. Either it won’t happen because it’s not going to work, or it does happen, and then there’s a number of issues after the fact. Nobody wants issues after the fact. The buyer just bought the practice, last thing they want to do is deal with issues when they’re trying to make good on their investment and run a practice. The seller wants to ride off into the sunset. They don’t want to be looking over their shoulder with problems after the deal.
Are there any other things that might be more specific to the legal aspect of putting a dental practice for sale? Is there anything that you’ve seen with your clients realizing, “Oh, whoa, I didn’t know that would matter.”
If they [the selling doctor] doesn’t own the building and they have a third-party landlord that they’re leasing from, often they’ll go into the transaction expecting that the landlord is just going to allow them to assign the lease to the buyer without recognizing that the lease they signed probably says that they cannot assign the lease without the landlord’s consent. Now, hopefully they have some language in their lease that says, “Consent can’t be unreasonably withheld or delayed,” meaning that the landlord can’t be unreasonable about it, but they still can withhold consent if they feel it’s appropriate. It’s important that sellers understand that some landlords can be a little bit funny, and it’s important to use your team, the ddsmatches of the world, to bridge any gaps that might be there.
Or if you have a preexisting relationship with that landlord, make sure to continue to have open communications about the fact that you are embarking on a sale transaction and that you need cooperation. And then you’ll do whatever you can to get cooperation from that. I think those things are really important, because it’s not a home run. Every once in a while a landlord does not allow the lease to be assigned, or they may require some egregious things like the seller continuing to guarantee the lease after the fact, even through a renewal term. I’ve seen landlords or sellers to do that. So I think that’s one thing that’s really important, is not only the associate agreement dynamics that I mentioned, but also making sure, acknowledging that the landlord is a big part of the deal if you’re leasing. And that they can actually stop you from selling in some instances. So it’s important to have a really good relationship there.
Are there any other things that can pop up if you own your property rather than lease?
Yeah. I mean, if you own the property and you’re planning to lease the property to the buyer, it’s important to have those terms outlined and a letter of intent so there’s no surprises down the road where you’re getting to the finish line of the sale transaction, and then the buyer doesn’t want to pay the rent that you’re asking for, right? So that’s important, but if you’re actually selling the building to the buyer, it’s important to make sure that your building is in the proper condition to be sold, because the buyer is most likely going to get an inspection and a survey done. And they’re going to do their due diligence on the property. So again, you don’t want to get to the finish line and then the buyer finds defects in the property or something, and now you have an issue and you can’t even embark on the transaction. I think those would be my advice as far as owning the building is concerned.
When a dentist is considering transitioning their practice, how quiet should they keep that. Is there a problem with too many people knowing about it?
I mean, every deal’s different, every situation is different. So this may be more impactful for some than others, but I would say one piece of advice that I just ran into in a transaction is, I was representing a buyer in a deal, and the buyer in the deal ended up not being able to get the financing to buy the practice. And they also couldn’t come to an agreement on the lease with the third-party landlord for the building. So they had to back out of the deal because they couldn’t get the financing for the deal, and also even if they could, the lease was going to be an issue. That’s pretty rare. I mean, most deals do go through, but this was sort of on the rare side that it didn’t. And the seller had told the staff in the practice about the deal, and had done so for a significant period of time, actually. Even before we even had a signed purchase agreement or had gotten that negotiated. So they made that mistake, and it’s going to probably cause them adverse effects.
They actually blamed the buyer for that. We actually see things a little bit differently in the sense that we didn’t tell them to tell their staff. If you’re on the seller’s side, it’s important to not tell the staff until you have to. Now, when you have to is going to depend on your practice and your situation. For some they have no choice, they’re going to have to tell them even before the purchase agreement is signed. For others, they can get away with making sure they have signed documents before they go and tell the staff. So that’s where you bring your team in. Andy [Edmister of ddsmatch Southwest] does a great job of that, facilitating it at the right time to make sure that they’re telling staff at the right time, and you can lean on your teammates as to when you’re supposed to do that.
What would you say to a doctor who thinks they don’t need the full team of advisors or a broker, that they can do this all themselves?
First and foremost, as I mentioned before, even if the seller is motivated and has the itch to go do all the things a broker would do, they probably don’t have the time. I would be certain they probably don’t have the expertise, but let’s just say they did, let’s say they’ve been a broker in the past before they have their own practice. They probably don’t have the time to do it properly, and when you’re selling a practice and you’re going to take in a lot of money, it’s important to do everything properly. And so it’s really important to retain a broker in the transaction if you’re selling because they are going to work really hard for you to, number one, locate a buyer. And not just locate any buyer, but locate the right buyer for your practice which is something ddsmatch does very well. They’re also going to help facilitate the transaction. There are a lot of things that go into a transaction that doctors don’t realize.
Many people think sometimes that brokers just sort of sit on the sideline, put parties together, and wait for the deal to happen, and that’s all they do. That’s not the case. Brokers work really hard to make sure that every part of the transaction is covered, and that they’re also bridging the gap between any kind of negotiations between the parties. Sometimes if attorneys are butting heads or something like that, the broker can step in and do a really good job to facilitate the deal to bridge any gaps and make sure that it goes as smoothly as it possibly can. We’ve already talked in this conversation about why it’s important to keep things very smooth in a transaction, because there is so much at stake and there are so many emotions that either, one, you don’t close a deal if you’re not able to bridge those gaps. Or two, you close the deal, but then you have problems afterward. As we know, nobody wants problems after the fact either.
Brokers are very important, not just to find the particular buyers that are good for your practice, but also to help hold your hand throughout the entire transaction.
Why would you recommend dentists use ddsmatch Southwest?
I would say that if someone came to me and said, “Hey, thinking about selling through ddsmatch. Should I do that?” I would say, “Yeah. They’re an awesome company. They have really hard working brokers.” Most of the work that I’ve done with ddsmatch has been with Andy Edmister, so that’s the person that I would talk about the most, but I’m sure the same goes for the other brokers. You want somebody who’s going to work really hard to not only get you a buyer, but get you the right buyer and cares about that, and who cares about the deal. They care about all the components that we’ve talked about on this interview, such as making it a good win-win for all parties involved. Even though the brokers represent the seller in the deal, and they do so zealously, it’s important that the buyer feels good about the deal too. Because, again, you don’t want problems that could derail the deal, you don’t want problems after the deal.
So they do a really good job at making sure that it’s a win-win and that everybody is happy, and that it’s fair and reasonable for everybody. Again, they work really hard, so certainly I would advocate their services.
We Can Help You Get What You Want from Your Dental Practice for Sale
At ddsmatch Southwest, we offer two things that will get you closer to what you want out of the sale of your dental practice. First, we have our Trusted Transition Process, a clear and consistent path to help you transition your practice while maintaining the legacy you’ve worked to establish. We put the wisdom and experience of hundreds of transitions from across the county to work for you.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2018/10/1-dental-practice-for-sale_HERO.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2018-10-05 05:00:492018-11-02 18:53:23A Dental Lawyer on Why it Takes a Team to Put a Dental Practice for Sale
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.
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.
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.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2018/10/2-dental-practice-for-sale-houston-TX-dental-office-for-sale_HERO.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2018-09-12 05:00:222018-10-05 22:54:12Low-Cost Tech Upgrades Increase Value for Your Dental Office for Sale
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 . 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?
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
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.”
“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"
No matter what you think of corporate dental service organizations (DSOs), they are now a major factor in the dentistry marketplace. DSOs continue to grow and, depending on the market, many dental practices will likely be impacted. Can your dental practice adapt? Some professionals worry that DSOs may change how dentistry is managed as a business. While you may not like the idea of your practice being acquired by a corporate interest, selling to a DSO may be your best financial move.
While DSOs seem to be everywhere, especially in urban markets, the actual numbers belie that belief. According to a recent study by the ADA’s Health Policy Institute, only about 7.4% of practicing dentists are in DSOs. Here at ddsmatch Southwest, we see the potential for growth in that number. However, for various factors beyond the scope of this article, we don’t see DSOs becoming a majority of dental practices. That said, there are certain advantages to selling a dental practice to a corporate dental service organization. Ultimately, it comes down to your goals for transitioning your practice. Whatever those goals our, our team at ddsmatch Southwest is committed to helping you meet them. It’s important to us that the dentists we serve are making an informed choice. To that end, its worth discussing DSOs and how they are changing the landscape.
How DSOs are Changing Small Dentist Offices
DSOs work on the economic principle of scale. The more offices they have, the more name recognition they have with consumers. This translates into more customers through the door. Also, by purchasing equipment and supplies in higher bulk quantities, they can get discounts for volume, reducing their overall costs (although they do have added costs related to a larger corporate structure).
As a corporation with investment capital, DSOs may be able to expand more easily than a solo office. This would include everything from marketing, to opening additional offices, to offering more services, to hiring staff and associate dentists. In fact, in our experience, while DSOs will acquire single practices, they seem to prefer to buy larger group practices that allow them to grow as quickly as possible.
For a small office competing with a DSO, this may mean that the small office will have to make changes to stay competitive. This might mean increasing your marketing budget, investing in the latest technology, and increasing your office hours and services. Without an increase in revenue, however, these changes can be hard. If this seems burdensome, there may be a way for you to adapt without running your business into the ground.
How a Small Office Can Function More Like a DSO
For a lot of solo dentists, DSOs may be anathema. After all, you’ve worked hard to build a practice and reputation for quality, individualized care for your patients. Can a corporate organization ever replicate that? Well, whether a DSO can or cannot do that doesn’t matter as much as whether you can compete against the larger entity. The good news is you can. Here are some ways how:
Bring on one or more associates. Expanding the number of dentists practicing under your roof will both increase your revenue overall and allow you to offer more services. Bring on associates with diverse specializations and you don’t have to refer work to other offices–keep it in house. Also, these associates may have new ideas that can make your practice better overall.
Open a second (or third or fourth) office. If DSOs can benefit economically from scale, so can you. Maybe not to the same degree, but it could be enough to make the difference. If you can get similar discounts on volume purchases, you can funnel the savings into increased marketing. If consumers see your billboards or online ads and are as aware of your offices as they are the DSO’s, you benefit from the same kind of name recognition. And remember, you’re local. You were there serving the community before the DSO came to town. Leverage that.
Combine practices with other small offices. If several dentists own their own individual practices, but operate within a shared space with shared staff, you can greatly reduce your costs. Those savings can be put into other growth-oriented business practices, like marketing or the hiring of associates. Also, you can consider splitting the costs of high price investments like new equipment. If the group sharing the space has a diversification of specialties, you can also have reciprocal referral arrangements, keeping it in house.
Most people get into dentistry to be dentists, not business managers. But a little entrepreneurial spirit can help you grow your practice in ways you might not have thought before. Remember, Goliath wasn’t brought down by the status quo, it was by David’s creative thinking.
Why You Should Think About Selling to a DSO
As mentioned above, at ddsmatch Southwest we want to help dentists get what they want out of transitioning their practice. That is our number one goal. But, the fact is, sometimes that means selling to a DSO.
When we talk to dentists thinking about retirement, we’ve found that every doctor has different expectations for transitioning their practice. That’s why our Trusted Transition Process includes so much more than just the dollar valuation of your practice. While a corporate organization may be solely focused on the bottom line, this has been your life’s work. You have a reputation, relationships with your employees and patients, and a role in your community. Concerned about what will happen to those things after your retirement? At ddsmatch Southwest, we care about your concerns and will put the time into finding you the right buyer to protect your legacy.
On the other hand, because you’ve worked so hard to build something of lasting value, it’s also reasonable that you want the best price you can get for your practice. You deserve to get all that you can out of a sale so you can enjoy the fruits of your labor during retirement.
So while selling to a DSO may not be right for everyone, it may be the right move for you. With capital to invest (rather than relying on financing), a DSO may be likely to offer more than an individual dentist.
Several dentists we’ve worked with are eager to give up the business management hassles, but not ready to be done practicing dentistry, especially with longtime co-workers and patients. DSOs often want the selling dentist to stay on for 1-3 years as an employee. This option allows you to end your career purely practicing your craft, not dealing with administrative headaches.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2018/07/3-selling-a-dental-practice-to-a-corporate-dental-service-organization-selling-to-a-DSO.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2018-07-20 05:00:572018-10-05 22:59:26Should You Consider Selling to a DSO? How DSOs are Changing Dentistry
When a medical need arises, most parents are quick to take their child to a pediatrician. The idea that the same principle should apply to dentistry–that the needs of children’s teeth are unique and require a specialized approach–is newer, but taking hold. Which means pediatric dentistry is on the rise. If you own a pediatric dentistry practice, now is a great time to consider selling. The market is primed to get you a good price for your practice. If you delay putting your pediatric dental practice for sale, its value may reduce as newer practices start up and become more common throughout the country.
Pediatric Dentistry: Promotion From Professional Organizations and Dental Hygiene Brands
The U.S. Bureau of Labor Statistics has dentistry on pace for a 19% increase for the period of 2016-26, higher than the average of other U.S. industries. Pediatric dentistry is projected to rise at the same pace. This is significant because pediatric dentistry specialization is a relatively new trend. In today’s world, more parents are choosing a pediatric dental specialist for their children over a general practitioner than ever before. The American Dental Association is supportive of parents making that choice, as there are unique aspects of tooth care for baby teeth and juveniles with new permanent teeth, and because they want children to develop lifelong healthy habits early on.
But it’s not just the ADA. A variety of dental and medical organizations are pushing for parents to take their children to pediatric dental specialists rather than general practitioners for those same reasons. And they are encouraging parents to get set up with a pediatric dentist as soon as their children get their baby teeth. “The American Academy of Pediatric Dentistry, the American Academy of Pediatrics, and the American Dental Association all recommend that parents establish a Dental Home – a home base for all of their children’s dental needs – by their first birthday” because “[while all parents know baby teeth eventually fall out, it’s important to keep them healthy. After all, they’re the blueprint for your child’s permanent teeth!”
In addition to the dental and medical associations, consumer dental brands are promoting pediatric dentistry. While it might not immediately seem significant how a toothpaste company sells its products, consider that most people first become aware that there is an ADA because of toothpaste advertisements. So when a company like Colgate promotes the reasons to choose a pediatric dentist, this will likely have more sway over parents than an ADA press release (it’s a hard reality that these corporations are more influential over public ideas about dental care than professional dental organizations).
And, the fact is, Colgate is right. Parents like pediatric dentistry because of how it’s specifically designed to meet children’s needs, both with regard to treatment and to the office setting and equipment. Children’s dental needs are not the same as adults, and parents are comforted by knowing their child’s dentist understands their concerns unique to children’s teeth. A pediatric dentist is trained to look for complexities related to a child’s growth and development, and will stress the importance of oral health and diet that will have positive benefits throughout their child’s life. As this way of thinking takes greater hold, it will drive an increase in demand for pediatric dentists.
Additionally, parents are more confident taking their child to a dentist in an office designed to appeal to the child’s sensibilities. This includes decor and furniture specifically selected to make children feel comfortable. More importantly, it means a dentist and staff that understands a child’s apprehension or even fear of going to the dentist trained to manage potentially negative responses. Understanding how children think and behave in these situations also allows dentists to effectively educate children in ways they understand.
Get Ahead of the Curve and Put Your Pediatric Dental Practice for Sale
With the professional organizations and consumer product companies in alignment about the importance of taking kids to a pediatric dentist, the trend toward this specialization will continue. Even without looking at the numbers, consider your own experience. When you drove through your town 10 or 15 years ago, how many pediatric dental practices or billboards did you see? How many do you see now?
Pediatric dentistry is on the rise in the public mind, making it on the rise in the dental industry as well. More young dentists entering the field will choose this specialty, meaning more young dentists are looking to buy or buy into practices. If you’ve been thinking about retirement, this makes now a great time to put your pediatric dental practice for sale. Even if you were thinking that retirement might be years away, the premium that your practice could net you now might make the difference that could justify your early retirement. You’ve worked hard to build the practice, why not enjoy the proceeds of that work sooner rather than later, when you can get the most from it?
At ddsmatch Southwest we have buyers looking for a pediatric dental practice for sale. If you are ready to discuss selling your practice, we can talk you through the process. It’s complex, but with our experience, we can help you with every aspect of the transition including legal matters, real estate issues, and employee concerns, in addition to considering your legacy. One of our specialities at ddsmatch Southwest is matching the right buyer and practice, so you’ll rest easy knowing your practice is in good hands before you begin enjoying your retirement.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2018/07/2-pediatric-dental-practice-for-sale.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2018-07-13 05:00:232018-10-05 23:19:36Why Now is the Time to Put Your Pediatric Dental Practice for Sale
If you’re planning on retiring and selling your dental practice in the next five-to-seven years, what do you need to know before you head down that road? There are many factors to consider before selling a dental practice, and your transition out of the business and into retirement can either be rocky or smooth. Fortunately, the brokers at ddsmatch Southwest specialize in finding you the perfect buyer and making the transition as easy as possible. To help you ease into retirement check out the tips below from Matt Howard at Blue & Co., and the dental brokers at ddsmatch Southwest. With careful planning, you can ensure a smooth transition.
Business Valuation: What Is It?
As a dental CPA, accredited business valuator, and a certified valuation analyst, Matt Howard knows a thing or two about determining the value of a dental practice. Before selling a dental practice, you need a business valuation to show potential buyers. This document will show buyers how much the practice is worth, taking into consideration the physical practice, operations, and average collections. “The first part of the business valuation always has historical numbers of the practice,” says Matt. (For his full webinar, see the video below on this page.) Has your practice grown, stayed the same, or decreased in revenue in the past five years? After that, your business valuator will look through financial statements and your practice operations. “We’ll go through the data. We’ll enter it into our models. We’ll ask very specific questions about that data… We want to really understand everything that’s going in going on inside the practice,” explains Matt. After taking into consideration market variables, a business valuator will present a draft to the seller and be open for input from the seller’s perspective. Then a final draft is made that the seller can present to potential buyers.
Building Value Before Selling a Dental Practice
When should you start preparing to sell your dental practice? Matt Howard says “anywhere from five, maybe even a little bit over five years would be a good time to meet with your ddsmatch Southwest broker and start discussing what do you want to do in the future.” It is important to start planning your transition early so you don’t make mistakes that could cost you when selling a dental practice. Matt Howard explains that “some things to take into consideration are knowing yourself and knowing what your aspirations or your goals are for the practice transition.” If you desire to slowly ease out of the practice, you may have already started to cut back your hours and started seeing fewer patients. What you may not realize is that decreasing your revenue stream in this way makes your practice less valuable for a future sale. According to Matt Howard, “A decreasing revenue stream in the valuation world is not exactly ideal. What we like to see is [the practice] either consistently growing by inflation or at least steady in the collection perspective.” Decreasing your hours and your revenue stream is not a bad desire but consider how it will affect a future sale before you take that step. It may be time to bring in an associate so you can still build your business while cutting back on your hours.
Office Remodels and New Equipment: Is It Worth the Cost?
Many dentists think adding value in the form of newer equipment or a remodeled office will be helpful when selling a dental practice, but as Matt points out, that is not always true. Matt suggests avoiding significant equipment purchases and remodels five years before you plan on selling, saying “significant remodels at that point would probably not be a complete one-for-one return on your money.” If your practice desperately needs updates to bring it up to an average standard of care then spending money on that makes sense. For example, if your practice has not moved into the digital age, now is the time to update your operating systems. But a newer x-ray machine or more comfortable dental chairs won’t get you a higher price if the ones you currently have are working well. Hold off on large business expenses that aren’t necessary to get your practice up to an average standard of care as you won’t see that money coming back to you when you sell.
Talk to a Dental Broker About Selling a Dental Practice Today
The American Dental Association released statistics stating that in 2015 the average age of dentists in the US is 50 years old. With so many dentists nearing retirement age, an increase in those selling a dental practice can be expected soon. Don’t get stuck trying to sell your practice in a flooded market. Depending on your specific market, you could get more from your sale if you decide to sell in three years instead of five. Talk to a dental broker at ddsmatch Southwest today for advice from local experts. We can help you plan, so you can take the appropriate steps in the coming years that will assure your smooth transition into retirement. Call today to find out how we can help you.
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.pngadmin2018-05-09 05:00:052018-10-05 23:58:58Retiring from Dentistry? Read These Tips to Get the Most Out of Selling a Dental Practice