Selling a Dental Practice

Profit By Selling Your Dental Practice

To receive the maximum profit when selling a dental practice, you first need to create a practice that brings in maximum revenue. This can be a difficult task. Dentists have more competition than ever before. Building a successful dental practice does not happen overnight. It takes a strategic and purposeful business model.

Avoid Costly Mistakes

Behind every thriving business is a solid business model. Unfortunately, some dentists have learned this the hard way. But growing a dental practice is like building any other type of business. There are certain tools and methods that are proven in the business world to help entrepreneurs become profitable. At DDSmatch Southwest, we offer a few suggestions to help you get the most out of your dental practice. So whether you are starting up your first practice or trying to recover from a failed attempt, there are several key components you should consider, especially if you anticipate selling a dental practice in the future.

Increase Your Online Presence

If your business does not have an online presence in this digital age, you are in trouble. More and more people are turning to the Internet to find answers to their everyday questions, including the question of what dentist to go to. One major benefit of an online presence is that you can reach people at times that are convenient for them. What you put online is available for all to see 24/7/365. You can grow your dental practice on holidays, weekends, and even in the middle of the night.

According to statistics released by the United States Census Bureau, at the time of their survey:

“Among all households, 78 percent had a desktop or laptop, 75 percent had a handheld computer such as a smartphone or other handheld wireless computer, and 77 percent had a broadband Internet subscription.” To beat out your competition and create a profitable practice, you simply cannot afford not to go online.

Don’t Forget About Social Media

Dentists need to proactively work to reach prospective patients through social media. The world freely communicates and interacts through social media. It is one of the best ways to have potential patients learn about your practice through personal recommendations.

A 2018 report from the Pew Research Center states: “Roughly two-thirds of U.S. adults (68%) now report that they are Facebook users, and roughly three-quarters of those users access Facebook on a daily basis … Americans ages 18 to 24 are substantially more likely to use platforms such as Snapchat, Instagram, and Twitter even when compared with those in their mid- to late-20s.”

Make it About Your Patients, Not You

The average adult does not understand, nor care about, the technical points of certain procedures or the extent of your training as a dentist. Rather, make your marketing easy for any given adult to understand. Patients want a dentist they can trust, that will listen to their concerns, and provide superior care. When you advertise, do not market to impress other dentists. Have the needs of your patients be your priority. Explain how you can provide solutions to their dental problems. Point out the benefits of your procedures and how pursuing dental care is important. Help them understand why your dental practice can improve their quality of life.

Gather a Team

There are many elements to managing a dental practice. Dentists need a team of professionals to help them grow their business or when selling a dental practice. It is wise to hire out additional staff to handle the marketing, clerical work, accounting, and other responsibilities of your practice. A dentist’s time is best spent with patients. Patients bring in revenue. Patients are the ones that will spread recommendations to their friends and family. Invest your time into meeting the needs of your patients’ dental issues.

Selling a Dental Practice

Selling a dental practice takes time and preparation. You will get out of it what you put into it. You need to first create a successful dental practice to be able to have a profitable exit. Dentists need to consider:

  • How can I boost my online presence?
  • Am I utilizing social media?
  • What message does my marketing promote?
  • Do I have a sufficient team to build a solid dental practice?

The Services of DDSmatch Southwest

At DDSmatch Southwest, we help dentists buying or selling a dental practice. We are expert dental practice brokers and know how to make you successful. With our expertise and knowledge of the dental industry, we help you achieve the vision you have for your dental practice. The team at DDSmatch Southwest understands the challenges and needs of dentists. Put our experience to the test. Learn more about our services and get a free Practice Transition Assessment. Call today and let DDSmatch Southwest help you reach your financial goals.

Financing for Buying or Selling a Dental Practice

Whether you’re looking for financing for one or multiple dental practices or looking to transition into retirement and sell your practice, it’s crucial to have your financial package organized and ready for presentation. However, finding lending if you’re interested in opening up more than one practice will require more documents as proof that your business is and will continue to be a profitable one. If you’re buying or selling a dental practice, there are many variables to take into consideration and many questions to ask when shopping for lending.

Questions to Ask Lenders

The first and most important question to ask is “do you finance multiple practices?” Institutions should be able to give you a firm yes or no. Most institutions do finance multiple dental practices, but research shows that lenders providing this type of service may ask for more requirements and collateral if opening multiple practices.

There are different types of loans associated with dental practices, including SBA loans and alternative lenders, so you need to inquire about which type of loan serves you best. SBA loans tend to be more popular among dentists as the interest rate is lower than alternative loans and the term is longer. However, if you need lending quickly, alternative loans may be the right option for you. Consider that alternative loans have a shorter payback period and typically only loan up to $500K. Depending on your credit history, ask if your lender requires collateral. They may use a house, car, assets or equity to help qualify you. Ask whether the interest on your loan is simple or compound. Laid out simply, compound interest compounds on the outstanding balance and any interest accrued. This means your interest can change month to month. Simple interest is interest at a fixed rate, payment, and term. Whether you’re just starting out or thinking about selling a dental practice after 30 years of being in business, simple interest should always stay the same.

What Lenders May Ask if Lending for Multiple Dental Practices

The more practices you have, the more difficult it may be to find funding. When approaching a lender, make sure you have a clear vision of what you plan to accomplish. Take into consideration if you plan to own five practices, ten practices, or a larger number which would require a lot of infrastructures.

Lenders will only agree to give you a loan if you can prove that your business is currently profitable or has all its “ducks in a row” giving it a promising head start. And of course, based on credit history. Lenders can inquire as to the specific locations of the practices, so they can geographically see if it’s possible for a dentist to commute to all of his or her locations regularly. They may also inquire as to the amount of cash on hand. This could become beneficial in planning and emergency situations. Laying out a detailed business and marketing plan helps lenders see where the funds are going.

If you envision a large network, hiring a CEO and CFO will be needed to keep track of all credits, debts, invoices, and cash flow. If you intend on selling a dental practice down the road, having people in these executive positions will help you understand how much your practice is worth. The larger your practice, the more employees and organization you will need. Lenders can and will put a hold on funds to expand if you cannot prove that your practice is under sound fiscal control. Some lenders may put a limit on the number of practices you can open and own under your loan portfolio, while others may specify a dollar amount of the maximum debt you can incur.

Factors to Consider When Starting or Expanding your Dental Practice

When looking to start or expand your dental practice, consider the following costs:

  • Rent of new location
  • Utilities
  • Staff salaries
  • Dental supplies and lab equipment (if acquiring from someone selling a dental practice, equipment may be outdated and in need of replacement)
  • Office supplies
  • Marketing and Advertising Costs
  • Expanding your Insurance Coverage
  • Business License
  • Remodeling costs

In addition to costs, consider the time frame that you need the loan. Alternative loans provide quick funding. SBA Loans are known for taking weeks or months.

Making a Smooth Transition when Selling a Dental Practice

Whether you’re the seller or the buyer, you want to make certain that the sale doesn’t negatively affect your staff and patients. With over 25 years of experience, DDSmatch Southwest has a proven process that uses technology to reach a wide range of vetted buyers and long-standing relationships with 3rd party valuation analysts and dental industry experts to make certain your practice is priced fairly and competitively.

Transitioning or selling a dental practice requires careful planning and preparation. Leave it to the professionals at DDSmatch Southwest to ensure everything is handled safely and that the future is promising for everyone involved. Call us today.