How to Find the True Value Before You Put Your Austin Dental Practice for Sale

Your dental practice’s value is probably not on the forefront of your mind as you manage your practice’s day to day operations. However, there comes a time when every dentist needs to know the true value of their practice. If you are listing your dental practice for sale in Austin, or trying to prepare for retirement, you are likely wondering how much it is worth. Unfortunately, unlike a real estate comp for your house or a Kelley Blue Book value for your car, determining the true value of your dental practice takes a little investigation and a lot of experience.

There are several methods dental practice valuators use to determine what your practice is worth including using a multiple of collections, and finding earnings before interest, tax, depreciation, and amortization (EBITDA). While you don’t need to be an expert on these in order to sell your dental practice, it helps to know the basics. Below we explain what each of these methods entails.

Multiple of Collections: A Rough Estimate

When purchasing a dental practice buyers are paying, in part, for the steady stream of collections that takes years to build from the ground up. When using a multiple of collections method of valuation, your practice’s value is determined by multiplying the average of its collections from the past three years by a certain percentage. This method is relatively straightforward and can be a good starting point for those considering listing their dental practice for sale. However, there is some debate over the number to use as the multiplier. Conventional wisdom has the multiplier at 70-80%, however, in our experience, that is not always reliable and sometimes it’s too low for an accurate valuation, depending on the practice. 

Our reservations about this method go to it’s main weakness: it does not take into account any other factors that make your practice unique. For example, one owner may have worked hard to keep their overhead costs low compared to the national average, at only 55% of their annual collections. Another owner’s overhead is much higher than the average at 80%. If both practices bring in $1 million in collections each year, the first practice—with its low operating costs—is actually worth more. For this reason, we don’t use this kind of back-of-napkin estimations. Rather, we rely on a more comprehensive valuation prepared by the dental CPAs and certified business valuators at Blue & Co.

Earnings Before Interest, Tax, Depreciation, and Amortization 

Using earning before interest, tax, depreciation, and amortization (EBITDA), while more complex, provides a more detailed look at how your practice works. With the increase in group practices, entrepreneurial dentists, and outside investors, using this method has become increasingly popular. When you decide to put your dental practice for sale in Austin your valuator will want to see your debt-free earnings and use that as an assumption for future success. 

When using this method, a dental practice’s net income (or EBITDA) is divided by a cap rate, typically a number between 23-31%. The result is taken as the value of your practice. For example, a practice whose net income is $250,000 divided by a cap rate of 30% = a value of around $833,000. As you can see, because this method takes into account your net income rather than your gross earnings it results in a much more accurate picture of what a buyer can expect to take home after the sale is finalized.

What Other Factors are Important?

If you, like most dental practice owners, are saying “wait, what about my real estate?” or “what if I just bought a new x-ray machine?” we hear you. Each dental practice for sale in Austin is unique, and will bring its own tangible and intangible assets to the table. That is why it is crucial to work with experienced, dental-specific practice valuators. At DDSmatch Southwest we work closely with Blue & Co. to provide valuation reports. The experts at Blue & Co. provide a detailed, 70-page report so you can see everything that goes into determining your practice’s value. Here are a few other items that will be factored into your dental practice’s value:

  • Practice location
  • Fee Schedule
  • Referral Rates
  • Cosmetic appearance of office including how well-maintained the equipment is
  • Payer mix
  • Whether office is leased or owned
  • Transition plan
  • Community goodwill
  • Financing availability

Blue & Co. will provide the seller with a draft of their report and allow time for feedback before delivering the final version to the buyer. This report is respected by banking institutions and will give your buyer confidence moving forward with the sale. At the end of the day it is important to remember that your practice is only worth what a buyer is willing to pay for it, which is why it is so important to work with a team like DDSmatch Southwest who knows the local market.

How to Add Value Before Listing Your Dental Practice for Sale

What happens when your Austin dental practice isn’t worth what you thought it was? For dental practice owners, especially those moving toward retirement, we recommend getting your practice evaluated early in the process to give you time to increase its value. Since much of your practice’s value is determined by your net income you should focus on increasing this. How do you increase net income? 

First, look at your active patient records and think about how you can increase your patient base. Bump up, or at least maintain, your current marketing efforts to new patients, and focus on creating an environment each new patient wants to return to. Ideally you should attract 25-30 new patients per month with a 12-14% attrition rate.

Next, consider your patient fees. How often do you increase your fees or renegotiate with insurance companies? It may be worthwhile to hire a PPO advisor to help you rework your accepted plans and increase your revenue before you list your dental practice for sale. 

Finally, take a look at your overhead expenses. It is easy to fall into a certain rhythm as a small business owner, but you need to be careful with every purchase you make. If you have an office manager make it a point to sit down and discuss every expense, from your office’s electricity bill to your supply of pens. Rather than sticking with what you’ve always done, shop around for the best price. The less overhead cost your practice carries the more it will be worth when you sell. 

Retiring? Use the Practice Optimizer Experience

If retirement is less than ten years away, now is the time to start preparing your Austin practice for sale. Giving yourself ample time to prepare, both your own mind and your practice, will ensure a smooth transition when the time comes. The first step you should take is to contact the transition experts at DDSmatch Southwest. We have developed a process called the Practice Optimizer Experience to help dental practice owners retire with confidence.

Our transition experts are concerned with more than just whether or not your practice sells, we want you and your practice to continue to thrive for years to come. Using Practice Optimizer Experience we will review every aspect of your practice and your finances to determine the best time for you to retire, solidify your legacy, and fully prepare you for the future. Here is what you can expect from the Practice Optimizer Experience:

  • Conceptual Transition Experience: What do you imagine when you think about retirement? In this first step our transition specialists will help you visualize your ideal future, set achievable goals, and map out strategies to meet those goals. 
  • Trusted Valuation Analysis: Before you list your dental practice for sale in Austin you need an accurate valuation, using the method discussed above. As part of your transition into retirement we recommend two valuations, one at the beginning of the process and one when you are ready to sell.  
  • Ideal Retirement Calculation: How much do you have set aside for retirement? Unfortunately, many dentists don’t have enough money to retire and maintain the lifestyle they want. Our partners review your current and future projected income to give you a full financial picture and ensure you are on the right track for retiring on your own terms.
  • Estate Preparedness Gameplan: What will happen in the lives of those you love after you are gone? With a well-prepared estate plan you can be sure to leave the legacy you want and provide for your loved ones well after you are gone. We refer you to an experienced, local attorney who will create or update important legal documents including wills, trusts, and estates.
  • Dental Insurance Navigator: Don’t list your dental practice for sale in Austin without first reviewing your accepted dental insurance plans. Our transition experts will refer you to a PPO advisor who will take a comprehensive look at your current payer mix. Your advisor may recommend new plans to add, or suggest plans to discontinue. She will also negotiate with insurance companies, leveraging her established relationship with them so you can increase your practice’s revenue.
  • Clinical Opportunity Blueprint: There are hidden revenue opportunities in every dental practice. Using Dr. Charles Blair’s “Practice Booster Clinical Treatment Analyzer” we investigate and uncover where you could maximize growth in your practice. In this 70-page report you will find a blueprint for increasing your practice’s value so you can get the most out of your sale.
  • Critical Metrics Analysis: Your practice is always changing and evolving. As you prepare for retirement you need to be aware of every change that happens so you can make sure your practice continues to produce at high levels. We provide the customized Practice in Your Pocket Ongoing Report so you can keep track of critical items right from your phone, tablet, or workstation. In addition we will include an annual review of these findings as you work toward listing your dental practice for sale in Austin.
  • The Trusted Transition Process™: Finally, when the time comes to list your dental practice, we will start you on our Trusted Transition Process. This tried and true process ensures you know exactly what to expect from your transition. We will work to find the right buyer to carry on your legacy, and make sure you get what your practice is truly worth so you can retire with ease. Our full range of professional services and commitment to transparency means you never have to wonder what is happening with your transition.

Not Sure When to Start? Contact Us Today!

If you are like most of our clients, you probably have a lot of questions about business valuations, adding value to your practice, and when to start your transition. You don’t have to be an expert in dental practice transitions to have a successful sale. The truth is, starting the process early and working with a team of experienced professionals are the best steps you can take toward a smooth transition. We are here to help with any questions or concerns you have. We offer guidance for anyone looking for information about listing their dental practice for sale in Austin and across the Southwest. 

Just take it from our numerous client testimonials, like Dr. Bill Wolfe who explained,

It was a pleasure doing business with [DDSmatch Southwest]. You were able to sell my practice when three other brokers failed. Selling one’s dental practice and retiring from 48 years in dentistry is not an easy, painless decision, but through your guidance (and a bit of counseling too), you made it happen with a buyer to whom I feel very comfortable turning over my practice. Your professionalism was absolutely critical to the successful sale and transition of my dental practice, and I am deeply grateful.

The dental practice transition experts at DDSmatch Southwest are ready to provide you with a free, no-obligation consultation so you can start preparing for your transition, whether it happens 6 months or 6 years from today. Fill out the request form on our website or call 855-546-0044 to get started.

Selling a Dental Practice in San Antonio: Planning for Your Future Starts Today

How often do you think about what your San Antonio dental practice is worth? Most dentists only consider the value of their practice when they buy it and when they sell it. In between these milestones they focus on providing care for their patients and supporting their employees. As a small business owner it is vital to focus on the day to day aspects of running a business, but too often dentists realize too late they could have been taking steps throughout their career to build value. Only when retirement is on the horizon and they start to think about selling a dental practice do they realize they should’ve started planning earlier. Fortunately, the dental transition experts at DDSmatch Southwest are here to help you prepare and prioritize for your future, even if you’re not planning to sell your practice anytime soon. Read below to learn our best tips for planning for your future.

Changing With Your Community

Most dentists stay in one office space for their entire career. Moving locations is expensive and not usually worth it unless there are extenuating circumstances. That means you will spend 30+ years in one neighborhood and community, watching it grow and change with time. The challenge now becomes adapting to your community’s demands. 

For example, if you started your practice in a San Antonio neighborhood with young families, you built your practice around serving those families. You bought equipment and designed your marketing to meet the needs of that demographic. Now, 30 years later your neighborhood has changed and you find yourself serving an older population. If you don’t change your practice’s operations to reflect this, you will lose business. Selling a dental practice becomes much more difficult when you are not in tune with your community. Your buyer will have to come in and adapt quickly if they want to keep their new practice afloat, and most buyers aren’t willing to do that. At the very least, your practice will lose value because your buyer sees how much work and money they will have to pour into the practice immediately.

Adapting to your community isn’t difficult, time consuming, or expensive if done properly and over time. In fact, you are probably already doing this in some small ways. But it is worth paying attention to your patient’s needs. Instead of repeatedly referring patients to an outside office, consider buying the equipment, or getting the training you need to serve your patients in-house. Not only will you add value through increased production and collections, you will see better patient retention. Small, incremental changes like this will help you increase your practice’s value in the long run.

Tangible and Intangible Assets When Selling a Dental Practice

You have probably heard of the two types of assets that make up your San Antonio practice’s value. Tangible assets, like the equipment you use every day, and intangible assets, like the goodwill you have in your community. Both of these asset types need to be strong for a successful business, and eventually a successful sale.

Tangible Assets

When you have practiced dentistry for 30 years or more you can get used to things being a certain way, whether it is your cracking dental chairs or the clunky software you use to bill patients and insurance companies. These tangible assets will be passed to the next owner, and many times is not worth updating right before listing the practice. However, throughout your career, you should keep an eye on these assets. Is the carpet in your office worn and stained? Are your employees waiting several minutes for their computers to start up in the morning? Keeping your equipment up to date will make a difference when you are selling a dental practice in San Antonio. 

Intangible Assets

The unique business practices you have cultivated over your career are what make your practice “yours.” Often they are the reason patients keep returning. The goodwill and trustworthiness you have with your community and staff members are intangible assets that add to the value of your practice. These factors are not things you can add to your practice at the end of your career, like updating your x-ray machine. A solid patient base doesn’t just spring up overnight, it is developed and fostered over a long time. Long-term, knowledgeable employees are also a sign of a well-run, high-value, practice. If you don’t have these intangible assets your buyer will have to build them after the transition, at which point it might make more sense for them to simply start up a practice from scratch. Start building up your intangible assets as soon as you start practicing dentistry so you can get the most out of your practice when you sell.

Write Your Handbook Before Selling a Dental Practice

One of the intangible assets your practice holds is its policies and procedures, some written and others unwritten. For example, maybe your front desk staff collects insurance co-pays and deductibles at the time of service rather than billing the patient for them later. This ensures cash flow and protects from patients falling into collections. While you may not have a written policy outlining this task, your staff and patients have come to understand it is the way your office works. 

Take some time to think and talk to your staff about these unwritten office policies, there are probably more of them than you think. From billing policies to how you remind patients about their appointments, these rote tasks are worth taking note of. Write down these “unofficial” policies so every new employee, and your eventual buyer, will know how to operate your practice and maintain its unique environment. With a solid handbook in place your employees and buyer will have confidence moving forward after you retire.

Beware the Technology Trap Before Selling a Dental Practice

One of the traps many dentists fall into as they prepare to retire and sell their practices is investing in depreciating assets too close to their sale. It is easy to put a dollar amount on technology, such as your billing software or other equipment, and think you have added that exact amount to the value of your practice. However, these assets depreciate, so even if you spend $20,000 on the latest technology you may not see your practice’s value increase by $20,000. If you are within five years of retirement, large purchases typically will not result in a 1:1 return on investment. 

Of course, there are always exceptions to this rule. For example, if you have not switched to digital imaging technology you should consider upgrading before you list your practice. Most newer dentists are not trained on older systems, which makes your practice less marketable.   This is one example why it is essential to work with experienced dental transition specialists like DDSmatch Southwest. Our experts will help you determine whether a certain investment is worthwhile right before selling a dental practice in San Antonio.

Along with overvaluing certain tangible assets, dentists tend to undervalue intangible assets. They pour time, money, and energy into building up their tangible assets, but ignore what makes their practice unique. Pay attention to your employees and patients needs, and recognize the role intangible assets take in making your practice successful.

Find Your Niche In San Antonio

Every dental practice has something special that makes it unique. When you pay attention to your employees needs, adapt to your changing patient base, and build your tangible and intangible assets, you will learn what makes your practice work well. In other words, you will find your niche in the San Antonio market. 

Why is it important to know this? When it comes time to sell your practice the right buyer will be one who fits into this niche, continuing your legacy. At DDSmatch Southwest we work hard to match the right buyer with the right seller. This is because, just like our clients, we care about what happens after you finish selling a dental practice. Our transition experts will help you identify the aspects that make your practice run smoothly, and find a buyer who is looking for a practice like yours. 

Don’t Wait Until It’s Too Late: Utilize the Practice Optimizer Experience

The earlier you start thinking about building value in your practice and creating a legacy, the smoother your transition will be. That is why we created the Practice Optimizer Experience. If you are within 10 years of retirement you need to start taking steps to prepare your practice and prioritize your future. Our transition experts will help you take care of every detail leading up to your sale, so you can retire on your own terms. Here is what to expect from the Practice Optimizer Experience:

  • Conceptual Transition Experience: Our experts will help you visualize your ideal transition and give you realistic expectations about selling a dental practice in San Antonio. This step leads to concrete strategies that will carry you forward through the end of your transition time. 
  • Trusted Valuation Analysis: In order to get the most out of your practice you need to know what it is worth now. We arrange for a trusted third party valuation before you start the process to give you insight now, and another before you sell to give your buyer confidence.
  • Ideal Retirement Calculation: How much do you need to make on your sale to retire with the lifestyle you envision? We make sure you are prepared by reviewing all of your investments, giving you a full picture of where you stand.
  • Estate Preparedness Gameplan: What will happen to your estate when you are gone? Getting legal documents in place will give you and your loved ones added peace of mind as you move forward toward retirement.
  • Dental Insurance Navigator: Negotiating with insurance companies is a vital part of running a successful dental practice. Oftentimes, our clients find they can increase revenue before selling a dental practice through negotiation with their current accepted plans. 
  • Clinical Opportunity Blueprint: Whether you know about it or not, your San Antonio dental practice has untapped potential. Using Dr. Charles Blair’s “Practice Booster Clinical Treatment Analyzer,” we identify areas of growth you can utilize to build value.
  • Critical Metrics Analysis: Your dental practice is not static, especially while you are working hard to build value and prepare it for a sale. We send regular reports on your practice to ensure you are on the right track to meet your goals.
  • The Trusted Transition Process: When you’re ready to start your dental practice transition our experts are ready to help with a clear roadmap to success. We value transparency and clear communication, so you’re never in the dark about what is happening.

Selling your practice without the Practice Optimizer Experience isn’t impossible, but we have found that dentists who work with our system are more confident about their transition into retirement. The Practice Optimizer Experience not only ensures you are getting what your practice is truly worth when you sell, it prepares you for every aspect of retirement. You can have more confidence selling a dental practice when you are certain your patients, employees, finances, family, and the legacy you worked so hard to build, will be taken care of after you leave.

Contact DDSmatch Southwest Today

Whether you implement the above suggestions early in your career, or right before you retire, you deserve to reap the benefits of the years of work you poured into your practice. Don’t leave money on the table simply because you don’t understand the process. Our transition team is made up of professionals with extensive experience in the San Antonio market. When you’re ready to start thinking about your future practice transition contact our office for a free, no-obligation consultation. 

Remember, the earlier you start thinking about retirement, the more successful your transition will be. We will help you prioritize and prepare for your future so you can retire with confidence. To contact our office today simply call 855-546-0044 visit our contact page

Finding Your Purpose Before You List Your Dental Practice for Sale in Austin

There are times in every dentist’s career when they lose sight of why they started and where they are going. In the past year of COVID-19 chaos, many dentists have considered whether or not they really want to continue working at a private practice, or if it makes more sense to sell and move on. Even with the ups and downs of the past year, now is a great time to list your dental practice for sale in Austin. But before you do, you should think about your future goals. Sit down and consider why you started your practice in the first place, what your career goals are, and what you want from your future. If you decide it is time to move on you should know that your current attitude toward work impacts your practice’s value. Learn why it is important to consider this fact as you make a plan for the future.

Looking Back to Plan for the Future

You may have started your career with specific milestones in mind, such as buying a practice by year five, expanding it to two or more offices by year 15, and retiring comfortably by year 35. Or, you could have started with the goal of simply serving your community and spending your free time with family and friends. 

Whether your goals were specific or vague, you had a plan at the beginning. Now that you own a practice, look back at your original goals and compare them to where you are now. Do you have the same goals or have you changed your desires for the future? Are you happy with where you are in your career? Most importantly, how do you feel about your practice after a long day of work? Do you feel accomplishment at the end of the workday, or are you longing to list your dental practice for sale? If you aren’t sure what you want next from your career, ask your family, close friends, and business advisors. Those close to you can help you decide if you should keep on your current path, or sell your dental practice and start down a new road.

Sometimes all it takes is a little soul searching to reinvigorate your career goals. However, many dentists realize mid-career that they are holding too closely to the goals they made as young dentists, goals they simply don’t want anymore. If you decide it is time to sell your dental practice and move on you should move quickly as the market for sellers in Austin is booming. 

Selling Your Dental Practice Now

When you decide it is time to sell your practice, what is the first step you need to take? In order to get the most out of your sale you need a team of trusted, experienced, advisors. A dental practice transition expert is key to listing your dental practice for sale and moving through the process with efficiency and transparency. If you don’t already have a dental specific CPA and attorney, contact our office for referrals. Professionals with experience in the dental industry will be invaluable as you decide when is the best time to sell, negotiate contracts, and allocate funds.

Many prospective sellers we speak to assume the chaos of 2020 has decreased the value of their practice. While every market has its unique ups and downs, we can say with confidence that now is one of the best times to sell a dental practice in Austin. The housing market in Austin and around the Southwest is growing at an unprecedented rate as the area floods with new industry and residents move in from other states. Most dental practices fully reopened several months ago and patients are rescheduling dental work they put off during the early months of the pandemic. This means production and collections are returning to pre-pandemic levels, or in some cases higher. This is great news for dentists listing their dental practice for sale right now.

In addition to the booming real estate market, now is a great time to list your practice because of the current demographics of dentists. According to the American Dental Association 21.1% of dentists in 2020 are between the ages of 55 – 64, and 16.3% are 65 years and older. In addition, the average age of retirement for dentists in 2020 was 68.2. This means a significant number of dentists will reach retirement and list their practice for sale in the next ten years. If you are considering selling your practice in the next five-to-ten years it is worthwhile to take advantage of the current market and not wait until it shifts out of your favor. 

Planning for a Future Sale in Austin

After some soul-searching you may decide now is not the right time to sell. However, even if you plan to keep practicing for five-to-ten years, it is never too early to start prioritizing your future and preparing to list your dental practice for sale. This is especially true if you are preparing for retirement. Small changes you make around your practice now can have a big impact on its value ten years down the road. The closer you are to selling your practice the more you should focus on increasing production and decreasing unnecessary costs.

If you’re planning for a future sale, check with our practice transition experts to find out steps you can take now to increase your practice’s value and make your transition as smooth as possible. Try to be flexible with your timeline so you can make the most of the Austin market while it’s hot. If you’re planning for retirement, take advantage of our Practice Optimizer Experience to ensure you get the most out of your retirement years. 

Vibe Check: How to Boost Your Austin Practice’s Value

One of the first steps in listing your practice for sale is getting a trusted practice valuation. At DDSmatch Southwest we work with Blue & Co., a group of experienced dental practice valuators. The experts at Blue & Co. provide a report to the seller, detailing everything included in the sale and what the true market value is. They also work with the seller and include important feedback before making a final draft that will be presented to the buyer. We recommend getting a preliminary practice valuation as early as possible, as there are several ways to boost your practice’s value before you list it. 

Since we are focusing on listing your dental practice for sale, we must address how your attitude toward your practice impacts its value. As a dental practice owner you set the tone for your practice, a tone that impacts your staff and patients. If you come into the office every day in a bad mood your staff will reflect that and your patients will feel uncomfortable. This ultimately leads to higher rates of employee turnover and low patient retention, all negative things when you are selling a dental practice. On the flip side, if you are excited about your work and encouraging to your staff and patients this typically results in higher satisfaction for both employees and patients. Patients are more likely to keep up with routine visits and refer their friends and family members.

So while “office environment” is not a line-item on your valuation, it does have a lot to do with your practice value. A welcoming environment will translate to higher practice valuation as patients return to a place they trust with people they enjoy being around. If you are feeling unhappy in your current career situation try to put those feelings aside so you can get the most out of the practice you built.

Listing Your Dental Practice For Sale With Our Trusted Transition Process

Whether you want to list your practice 6 months from now or 6 years from now you can benefit from the DDSmatch Southwest Trusted Transition Process. We want to help you maintain the legacy you worked hard to build, while also helping you get the full value of your practice when you sell. Our team of transition experts values clear and consistent communication, which is why we created this process. Here is what we do for you:

  • Conceptual Transition Experience: Well before your transition we help you visualize your future, strategize, and set attainable goals.
  • Strategic Practice Outreach: Using technology and a human touch we share your practice’s unique qualities with our network of pre-screened candidates, looking for the best possible match.
  • Trusted Valuation Analysis: As we mentioned above, your practice will be analyzed by a Certified Valuation Analyst. This third-party report is fair and respected by banking institutions.
  • Clinical Opportunity Blueprint: We analyze your practice to reveal untapped potential, which gives your buyers confidence for their future success.
  • DDSmatch Interview Alignment: After you list your Austin dental practice for sale, we identify potential buyers and lead an in-depth interview so you can determine who the best candidate is to take over your practice. 
  • Dental Advisory Connection: You need trustworthy advisors on your side. We connect you with local professionals like attorneys, accountants, and real estate brokers to ensure every step of the process runs smoothly.
  • Vision Alignment Completion: We work with advisors on both sides of the transaction to move everything forward with transparency and timeliness, until your vision is made into reality. 

Our Trusted Transition Process has worked for hundreds of dentists in Austin and across the Southwest because of our high attention to detail, transparent processes, and the human connection we make with each of our clients

If you are still unsure whether or not you want to sell, give us a call like Dr. Gwen Eaker did. Unsure about whether she wanted to sell, Dr. Eaker turned to our team for help,

[Randy and Andy] helped me come to grips with even just making the decision. They helped me work it through  . . . no pressure to sell it because, you know, that’s how they make money, is to sell my office. But they did not pressure me to do that. They would have helped me jumpstart it, and make it more of a success if that was the road I chose to take. They helped me decide. They were very good friends . . . I have faith in the company and I really enjoyed the experience I had with them. I mean, I would not recommend anybody else. And I’d never do it alone.” 

To read more of Dr. Eaker’s story visit our dental transitions blog

List Your Dental Practice For Sale In Austin Today

No matter where you are in your career our practice transition experts are here to help. We want to help you reach your lifestyle and career goals, whether that means you want to sell outright, take on an associate, or simply plan well for retirement. 

We work with dentists who are on a short timeline, like Dr. John Wells who told us, “Thank you for selling my practice in record time. Do you realize that it only took four months from start to finish? Plus we got our asking price.” 

As well as those who would like to take a little more time, like Dr. Bill Wolfe who explained, “It was a pleasure doing business with [DDSmatch Southwest]. You were able to sell my practice when three other brokers failed. Selling one’s dental practice and retiring from 48 years in dentistry is not an easy, painless decision, but through your guidance (and a bit of counseling too), you made it happen with a buyer to whom I feel very comfortable turning over my practice. Your professionalism was absolutely critical to the successful sale and transition of my dental practice, and I am deeply grateful.

Don’t list your dental practice for sale in Austin without contacting our transition experts for a free, no-obligation consultation. Learn why now is a great time to list your practice in Austin, how our Trusted Transition Process works for you, and what you can do to boost your practice’s value so you can get the most out of what you built. To schedule your free, no-obligation consultation with DDSmatch Southwest today visit our contact page or call our office at 855-546-0044. 

The Importance of Setting Goals Before You Sell a Dental Practice in Austin

Ideally, every dentist who owns their own practice will eventually retire and list their practice for sale. The hard work dentists put in over the course of their careers should be rewarded when they sell a dental practice. Too often, however, dentists don’t plan well or set specific goals for their career. When it comes time to retire, these dentists scramble to get their practice running smoothly in order to get the full value when they sell. One of the keys to a successful dental practice transition is setting goals early. Learn our best tips for setting goals so you can plan and prioritize your future.

When to Start Setting Goals

As a young dentist, fresh out of school you probably didn’t think much about retirement. At most, you set up a retirement savings plan and contributed part of your income to it every year. There is nothing wrong with focusing on building your practice at this point, throwing your energy into growing your practice is a good career choice. However, every decision you make, even early on in your career, will have repercussions later on when you decide to sell a dental practice. 

The American Dental Association reports the average age for dentists at retirement is 68, much higher than the average retirement age of the general U.S. population. While this fact suggests dentists love what they do and decide to work longer than those in other professions, it may also indicate something else. Many dentists nearing retirement age aren’t financially ready to retire and maintain their current lifestyle. 

Too often dentists assume the proceeds from the sale of their practice will carry them through their retirement years, without actually knowing how much money they will need. They end up making the difficult choice between reducing their lifestyle to match a lower income, or working longer than they really want to. Dentists who start to plan at least ten years ahead of their desired retirement date are able to retire on their own terms. Individuals who plan even further in advance are setting themselves, their practices, and their families up for success.    

Even if you do not plan to sell a dental practice in the near future there are goals you can set for yourself that will make a difference down the line. That is why we recommend dentists at every age sit down and think about the trajectory of their career such as whether they want to own a dental practice with multiple locations, if they want to be part of a group practice, and what age they would like to retire at. Knowing what you want out of your career can help you make a roadmap for the next five, ten, or fifteen years and more.

Setting Goals Early in Your Career

If you are still a long way from retirement, your energies are likely spent on building your practice and learning how to be a successful small business owner. Believe it or not, this actually plays a large role in how successful your future practice transition will be. When it comes time to sell a dental practice, your buyer will want to know the practice is running smoothly, patients are happy with their care, and employees are competent and loyal. More than anything though, your buyer will want to know they are buying a practice with a long standing record of goodwill in the community. 

In Austin and the surrounding areas there is a lot of competition for general dentists. According to Texas Health and Human Services there were 584 general dentists practicing in Travis County in 2020. Early on in your career you need to think about what will make your practice stand out in the marketplace, and how you can become an essential part of the community. The better established you are the more value you build. 

Early in your career is also the best time to form relationships with other professionals who can help your business. You’re a dentist, and as such you don’t need to be an expert in tax law or real estate. Hire experienced professionals like a dental-specific CPA who can guide you through important business decisions. Learn about running a small business by signing up for continuing education. Educate yourself on how to find great employees and empower them to do well. Set yourself up for success by recognizing you don’t know everything, but you can learn.

Write Down Career Goals, Sell a Dental Practice at The Right Time

Early on in your career your timeline can be flexible. For example, at 35 you may decide you will retire at 65, but when that time comes, you may decide you want to keep working another three years. The purpose of goal setting isn’t to be rigid, it is to give yourself time to do things right so you can retire on your own terms. Once you determine what your overall career goals are you should make specific goals for the next five years, ten years, and so on. Ultimately, each goal should build off the last one in order to build your practice and retire when you want.

What do we mean when we say you should make specific goals? We are talking about physically writing (or typing) your goals out so you can refer back to them periodically. Take out a notebook and pen, or open up your computer and list the goals you want to accomplish in the next five years. Do you want to open a new practice location? Hire more hygienists? Increase your production by 10% every year? Sell a dental practice in Austin and relocate? When you finish your five year goals, start writing your ten year goals, then continue on until you get to the year you want to retire. 

One thing to remember when you are creating your roadmap is to make sure each step makes sense in relation to the others. For example, five years before you plan to retire is not the best time to buy a new dental practice. By the time you are five-to-ten years away from retirement you should be thinking about getting your current practice ready to sell

In addition, each goal needs to be realistically achievable with the resources you have available. 

You may set the goal of adding additional services, but if you don’t have the training to offer these services the goal becomes achievable. If you want to meet the goal of offering additional services you need to set out a time and place to get the training you need. If you take the time to list out all the goals you have for your career, you can plan to sell your practice on your own terms.

Refer to Your Goals Often as You Plan to Sell a Dental Practice

When you have your career goals mapped out keep the list in a safe place and refer back to it yearly. Look at your next milestone and make a plan to meet it. For example, if your goal is to hire an associate, you need to make sure your practice is producing at a high enough level to take on an additional dentist. If you take steps now to increase production your practice will be ready to take on an associate by the time you planned to bring one on. 

Each time you refer back to your goals you should make sure you are still on track for your ultimate goal, selling your practice when the time comes. If you are unsure whether your roadmap is realistic and achievable talk to our transition experts. We can help you determine the right time to take specific steps such as reducing your hours or remodeling your office.

Reevaluating Before You Sell a Dental Practice

Again, the aim with setting specific goals is not to be rigid. That is why we recommend looking at your list of goals regularly. Maybe when you were fresh out of dental school you imagined owning a dental practice with multiple locations in Austin, but ten years down the road you decide you would rather slow things down and focus only on one location. There is nothing wrong with changing your mind, as long as you are the one in control. 

Reevaluating is also important to make sure you are on track for both short term and long term goals. Your goals are like dominoes, which is why you cannot focus solely on your next milestone when you take out your list of goals. You may find you need to adjust your current actions in order to meet your 20 year goals. In the example above, when you decide you want to focus on owning one location instead of multiple locations, that will have a great impact on what you do with your time and energy. In this case you need to adjust your long-term goals to match your change in direction.

Prioritizing Retirement Goals

What if you are less than five years away from your desired retirement date and you have not planned ahead to sell a dental practice? While it is never too early to start planning, it is also never too late. The first step you should take when retirement is on the horizon is to contact the dental transition experts at DDSmatch Southwest. We have created the Practice Optimizer Experience to help dentists plan and prioritize for their retirement. Our goal is to take the stress and worry out of planning for retirement by guiding you through every step and helping you build value in your practice. Here is what we do for our clients:

  • Conceptual Transition Experience: Our experts will sit down with you to discuss your desires for the transition and how you want to live after retirement.
  • Trusted Valuation Analysis: Our partners at Blue & Co. perform two analyses. One at the beginning of your journey to give you an idea what your practice is worth now, and one to provide your buyer before you sell a dental practice. 
  • Ideal Retirement Calculation: What plans do you have for life after retirement? Our partners at HK Financial Services review your investments as part of your Retirement Check-Up in order to ensure you have enough set aside. 
  • Estate Preparedness Gameplan: Retirement is about more than traveling and playing golf. Our team will refer you to an estate planning attorney to help you set up important legal documents to protect your assets.
  • Dental Insurance Navigator: Renegotiating your insurance plans can add value to your practice. Shelley DeGroff at Integrative Dental Solutions will help you review your plans for maximum profit. 
  • Clinical Opportunity Blueprint: Are there areas in your practice that could boost your growth? This analysis shows opportunities you can take advantage of to increase your practice’s value.
  • Critical Metrics Analysis: This periodic report shows how your practice is performing over time. It will help you determine how to improve production and value.
  • The Trusted Transition Process™: When you are ready to sell a dental practice in Austin our Trusted Transition Process™ provides a clear and consistent roadmap. We are committed to transparency at each step so you can sell and move on with your retirement. 

With the DDSmatch Southwest transition team on your side you will have expert help to decide things like whether to renegotiate insurance plans, what areas of your practice to invest in, and whether or not to take on an associate. The Practice Optimizer Experience ensures no detail is overlooked so you can retire with confidence. 

But don’t take our word for it, see what clients like Ryan S. have to say.

“Tremendous experience! Working with DDSmatch was so easy and they went above and beyond to help us through the entire process. Truly personalized service, super responsive and detailed. I would highly recommend them to anyone buying or selling a practice!”

When you’re ready to talk to an expert about your dental practice transition, call DDSmatch Southwest. Our team is ready to help you plan and prioritize for your future. Set up a consultation today by calling 855-546-0044.

What is the Ideal Timeline for Selling a Dental Practice in San Antonio?

There are a variety of reasons dentists decide to sell their practices. Some dentists only start thinking about selling a dental practice when they decide it is time to retire. Others want to move from a rural to an urban area, or decide to move to a new city or state for personal reasons. Whatever the reason may be, one thing holds true for every dentist planning to sell a practice: the sooner you start planning, the more successful your transition will be. But what exactly do we mean by “soon”? Your ideal transition timeline should be tailored to your specific needs before, during, and after the sale. To pin down an ideal timeline you need to know the factors that make up a successful sale. Below, we outline what factors you need to consider, and what a typical timeline is for dentists planning to sell a practice in San Antonio and the surrounding areas.

First Things First: Why are You Selling a Dental Practice in San Antonio?

As we stated above, there are several reasons dentists decide to sell their practice. We have worked with dentists who want to retire from owning their own private practice, but plan to stay active in the industry, as a consultant for example. Other dentists may decide they want to sell their San Antonio practice and buy one in Dallas in order to live closer to extended family. 

The main distinction when planning for a sale is whether or not you are planning to retire after the sale is finalized. Where will your income come from after you sell? Do you need the proceeds of your sale, combined with your current retirement investments, to carry you through the final 20+ years of your life? Or do you only need the proceeds to fund your next venture? 

Why does it matter what your next steps are? If you are selling a dental practice in San Antonio for personal reasons, your sale will likely need to line up with external factors such as selling your home or starting a new job. If you are selling before retirement you may have a little more flexibility in your timeline. While it is certainly possible to complete a dental practice transition in a matter of months, taking time to plan out your transition and build value in your practice will result in a more successful sale. That is why as soon as you start thinking about selling your practice you should contact a practice transition specialist

Variables to Consider Before You List Your Practice

Each dentist and practice has a unique set of variables that may help, or hinder, reaching their specific transition goals. Several unexpected variables need to be considered before you decide on your ideal transition timeline. Here are the variables that will impact your transition timeline.

The Value of Your Collections

Not only do your collections impact the sale price of your practice, they are an indicator to buyers of what they can expect to make after they take over. When you are selling a dental practice in San Antonio your buyer will need to know they can cover operating costs and still take home enough to support their lifestyle. The US Bureau of Labor Statistics reports, “the median annual wage for dentists was $159,200 in May 2019.” Your actual annual income will vary based on your location, specialty, overhead costs, and the ebbs and flows of the economy. In addition, newer dentists will likely have significant student loan debt. According to the American Dental Education Association the average debt for dental school graduates was $219,169 in 2019, with 39% of the graduates reporting student loan debt over $300,000. So, whether or not they are freshly out of dental school, it is highly likely that a younger dentist will have to take their student loan debt into consideration when evaluating practices to buy. Will your current take home pay support a dentist in this situation? The higher your take home pay the more attractive your practice will be to buyers, and the shorter your transition timeline can be.

Practice Location

Selling a dental practice in Alamo Heights is a much different experience than selling one Shertz, even though both locations are within the greater San Antonio area. Urban areas are more densely populated, and tend to attract more potential buyers. If your dental practice is located in an urban area you can expect a practice transition to be completed six to twelve weeks after finding a qualified buyer and obtaining a practice valuation. It is worth noting, though, that urban areas tend to have more competition for buyers and highly successful practices that may be financially out of reach for younger dentists.

Practices in rural areas typically take longer to find a buyer, up to three years in some cases. However, the economic health of your specific community will have a lot to do with finding a qualified buyer. San Antonio and the surrounding areas are growing rapidly, and suburbs that were once considered “sleepy” are now growing at incredible rates. Even if your area is still considered “rural” it may be in an up-and-coming area where buyers are looking to snatch up space quickly.

When you’re selling a dental practice in an area that is urban, rural, or somewhere in between, it is important to discuss your ideal timeline with a local broker. Someone who is experienced in dental practice transitions in your area will have their finger on the pulse of the market and can help you decide the right time to list your practice.

Retirement Age

Have you put much thought into when you want to retire? The American Dental Association found that the average age of retirement for dentists in 2017 was 68.9. If you are within ten years of your ideal retirement age it is time to start planning. A successful transition into retirement takes years to plan and involves much more than just putting your practice on the market. That is why our transition experts created the Practice Optimizer Experience, which we will discuss in more detail below. Even if you aren’t planning to retire in the next ten years it is wise to consider how your current sale could affect you down the road.

Selling a Dental Practice Without Retiring

If you are not planning to retire soon, what can you expect your transition timeline to be? Oftentimes our clients who are moving on without retiring need to sell their practice quickly because of external factors. However, this doesn’t mean you can’t get the full value of your practice, or even increase your practice’s value before selling. As soon as you know selling your practice is a possibility, contact one of our transition specialists to talk about a practice valuation. 

A practice valuation will give you an accurate record of what is involved in the sale and what the total value of your practice is. At DDSmatch Southwest we work with third-party valuator Blue & Co. for reliable valuations. Your 70-page report will give you insight not only into how much you can expect your practice to sell for, but what you can do to boost value before selling a dental practice in San Antonio. If you have the flexibility to wait a few years before listing your practice there are many things you can do to increase your practice’s value. If you only have a few months before you need to sell, talk to your transition specialist about whether there are any quick and effective ways to increase value in your practice. It is important to note that some “quick and easy” ways many dentists think will add value actually do not provide a 1:1 return on investment. For information on cost-effective ways to add value to your practice visit our dental transitions blog

Your Retirement Timeline

Even if you don’t know the exact age you want to retire at, you probably know a general range. When you first start to plan your dental practice transition you don’t need to set out specific dates for your retirement. In fact, it is a good idea to remain flexible with your plans in the early stages to make sure you get the full value of your practice. In addition, if you want to take on an associate or reduce your hours before selling a dental practice you need to plan these steps well in advance to avoid unintentionally decreasing your practice’s value.

Ten Years Before Your Dental Practice Transition

As we mentioned above, the average dental professional retires in their late 60s, which is why we recommend dentists in their 50s start preparing their practice for sale. Now is the time to take a look at the equipment and software you use and consider upgrading them. Replacing outdated x-ray equipment or billing software can be costly, and should only be done if you have the time to pay off the equipment and train your staff to use it. Bringing your practice up to date at least ten years before you sell will allow you to benefit from the upgrade while making your practice more attractive to future buyers.

Five Years Before Your Dental Practice Transition

Five years or more before selling a dental practice in San Antonio you should start focusing on streamlining your practice for optimal value. Depending on your practice’s makeup this could mean reducing specialty procedures to make your practice as mainstream as possible. Look at each aspect of your practice and consider whether you could make it more efficient. If you haven’t already, make the switch to a digital filing system and digital x-ray equipment. While these upgrades may be expensive you need to start thinking about your future buyer. Younger dentists won’t know how to use outdated systems and are less likely to choose a practice that will require them to learn or pay to upgrade them.

Two Years Before Your Dental Practice Transition

At least two years, but as many as five years before you plan to sell, review your fees to see where you can raise them and find ways to increase your patient base. Research comparable procedures in your area and consider setting your fees in the 80th percentile. Avoid adding new, specialty procedures, as you will not have time to gain the skill and experience needed to be competitive before you retire. 

Remember, when you are selling a dental practice in San Antonio you are selling much more than just the equipment. Now is the time to make sure you have qualified staff in place and that they are paid fairly. Too much turnover is a red flag to potential buyers, while hyper-inflated salaries will reflect lost value. Look at the local job market to make sure your staff’s income reflects their qualifications, abilities, and loyalty.

With a few small exceptions, the time for upgrading your office is over. Focus your efforts on small cosmetic improvements, such as repainting, but avoid larger office remodels. Your goal now is to make a good first impression on your patients and future buyers.

Time To List Your Practice

With the time and effort you put forward over the last ten years, selling your practice should be a breeze. Your dental transition specialist will guide you through the final steps of selling your practice, including getting a reliable practice valuation and connecting you with a dental specific attorney and CPA. 

Practice Optimizer Experience

A lot goes into preparing for retirement and selling a dental practice, which is why we created the Practice Optimizer Experience. When you take advantage of these services you can be sure no detail will be overlooked and you can retire on your own terms. The Practice Optimizer Experience includes important steps such as an Ideal Retirement Calculation, Estate Preparedness Gameplan, Dental Insurance Navigator, and Clinical Opportunity Blueprint. Learn more about how we help dentists in San Antonio and beyond prepare, plan, and prioritize for the future by visiting our webpage here.

Contact the experts at DDSmatch Southwest today to learn more about successful dental practice transitions in San Antonio and across the Southwest. 

How an Accurate Post-COVID Valuation Can Help You Sell Your Dental Practice

You’re probably tired of hearing how 2020 and 2021 are “unprecedented” or “unpredictable” but the truth is we are sitting in a much different place than we were a year ago. Most dental offices are up and running again, but with stricter guidelines for how daily operations are run. Patient load in some offices is low as they strive to reduce the number of patients in the waiting area at the same time. More of the practice’s budget is dedicated to protective equipment and sanitization. 

If you are looking to sell your dental practice in Austin you may be asking yourself, how does this past year affect my valuation? Higher costs and lower collections in 2020 can’t be a good thing, can it? The good news is, every dental office in your market was affected equally by the pandemic and industry experts have developed strategies to find fair and reliable valuations. Find out how valuations have changed in the past year, and what this means for your practice.

What is a Business Valuation, and Why Does it Matter?

If you’re new to dental practice transitions you should know a business valuation is one of the most important documents you need as part of your transition. During the purchasing process the seller provides a business valuation that details every financial aspect of the practice. This document gives the buyer confidence, and is respected by banking institutions for lending purposes. 

Matt Howard, a Senior Manager at the consulting firm Blue & Co., performs hundreds of dental practice valuations each year. Before you sell your dental practice, an experienced valuator like Matt will walk you through the process. “My core value is helping you as a seller or as a buyer truly understand what is the market demanding for a practice that you’re looking at or you own today.” explains Matt. The valuators at Blue & Co. are, “trying to take the emotion out of it, trying to just really come in as that third party that gets paid exactly the same amount for every business valuation . . . and truly help you understand what is a fair price from both a buyer and a seller perspective for the practice.”

Do all business valuations work this way? Unfortunately, says Matt, the answer is no. “There’s some other entities out there that set their own prices, and it’s a one pager, and you have no idea how that value is determined.” Without a detailed report like the one provided by Blue & Co. sellers and buyers are left in the dark about what makes up the sales price. “That is not how I like to handle the process.” Matt says. When you sell your dental practice you should have a full picture of everything used to determine its value. At Blue & Co., Matt explains, “we have a very full valuation, 60 pages or more depending on the practice, that helps detail exactly how we arrive at the value. Again, transparency and intentionality is something that I love to bring to a transaction.”

How Dental Practices Were Affected By COVID-19

While COVID-19 shutdowns were not identical in time or length throughout the nation, it is safe to say every practice was affected in some way. Matt explains, “most parts of the country had some impact in March, April, and May, typically the months that we’re seeing where obviously we were either shut down for a period of time or all of that time.” 

But, as Matt points out, these three months were followed in most areas by a strong come-back, which is important when you are trying to sell your dental practice. “What I’ve seen over and over again, and I probably worked on 200 or so valuations since the closure, is we came back very strong in most cases . . . So we had three or four months of just better numbers than most practices have seen in general in their entire existence. And that’s that pent up demand, the industry trying to make up for two lost months or three lost months depending on where you’re at in the country.” 

In a normal year an individual practice showing ups and downs like this would be concerning from a valuation standpoint. It may indicate poor practice management, or something else going on beneath the surface that a buyer should be aware of. How are business valuators handling these COVID-19 related ups and downs? “In the end,” says Matt, “we have all these ups and downs in the integrity of the data, and it’s just going to make for a lot more looking at that data and making sure that whatever we use in our valuation is really the expectation of what is going to continue on in the practice post-COVID.”

Sell Your Dental Practice With an Accurate Post COVID-19 Valuation 

A typical business valuation pulls financial data from the past year in order to predict what your future practice earnings will be and create an appropriate value. “We are taking each month, and the profit and loss statement is basically the revenues minus the expenses, and that shows the profitability of the practice” says Matt. However, since 2020 was a year with so many ups and downs, how do valuations take this data and extrapolate? As Matt pointed out above, valuators are looking closely at the data and setting realistic expectations for how the practice will operate in 2021 and beyond. 

Here is how Matt explains the new process of finding an accurate value before you sell your dental practice in Austin: “we are trying to get each month of data for all of 2020. And that way what we can do is we can parse out those months that were most impacted by COVID. And . . . let’s say all three months were a wash for your practice, March, April, and May. We’ll take those out, take those three months out, and either tack on some of 2021 that we already have finalized, or going back into 2019 and adding on maybe November and December of that year. That way we can have 12 full months of data without the craziness of those two or three months.”

Overall, Matt explains, there is a continuity to how practices in certain markets shut down and reopened, which helps valuators determine what the true value of a practice is without the interference of COVID-19 shutdown data. “From a valuation component, I feel like the valuations, again, are substantially similar to what they were pre-COVID,” says Matt. “As long as the practice has shown that it was either proportionally down based on the amount of closure, or even some have been completely intact in 2020.”

Maintaining Value Before You Sell Your Dental Practice

The past year has been difficult, leading many dentists to wonder whether they should cut back their hours, take an extra few days of vacation, or retire earlier than planned. “I think that COVID has been an instigator for practice transitions.” says Matt. “I think some people woke up and realized ‘I have to figure out when my exit point is’ and maybe it’s sooner than later based on what’s going on in the world.” 

Before you take certain steps, we recommend thinking about how it will affect your practice’s value. Right now most practices are ramping up production and collections, and in some cases surpassing even their 2019 numbers. “In the end, 90% of the practices that I’ve looked at have either been proportionally down or even better than they were prior to 2019,” explains Matt. This is great news if you are planning to sell your dental practice in the near future, and a good reason to keep your numbers strong. 

Matt cautions dentists not to fall into a “slow fade” transition. As Matt explains, a “slow fade” happens like this: “It was a $1 million practice in 2017, and every year [they take] a couple more weeks of vacation, maybe trim a day, hours, maybe stop really pushing some of the dentistry that they think should be done. And at the end of the day, it ends up being a $700,000 or $600,000 practice by the time that we look at it, and that slow fade absolutely impacts the value of the practice.” 

As the practice owner you want to get the full value of your practice when you sell. Most dentists will still have that $1 million valuation in mind, not realizing the steps they took over the past few years had such a big impact. Again, Matt explains, “If it’s a $600,000 practice and it was a $1 million practice four years ago, that doesn’t matter as much to [the buyers]. They look at it as a $600,000 practice and so do the banks.”

The lesson here is that if you want to sell your dental practice in Austin you should worry less about the several months of lock-down and restrictions during 2020, and more about maintaining and increasing your value in 2021. “Sellers are still out there.” says Matt. “I do think [COVID] has been a big instigator to get a lot of them engaged. And again, I do think we’re in the sellers’ market still.” 

However, Matt also cautions that the market could flip in the next few years based on the current demographics of dental practice owners. The American Dental Association reports 37.4% of dentists are over the age of 55. This means that the market may soon flood as these dentists near retirement. “We do have older owners of dental practices, just based on the baby boomer generation [who] still owns the majority of practices.” says Matt. “So there will be a lot of activity over the next ten years or more as the baby boomers do exit practice ownership from a general perspective.”

Sell Your Dental Practice with the Experts

When you’re ready to put your practice on the market how do you learn about the process, avoid mistakes, and get the most value out of your investment? The experts at DDSmatch Southwest and our partners are here to help. One of our top priorities in every transition is transparency. We want both buyers and sellers to know exactly what to expect, be comfortable asking questions, and feel confident in the process. 

When it comes to your business valuation Matt and his colleagues at Blue & Co. take the same approach, “I mean, jumping on the phone with [the sellers] and helping them understand what the value is and how I got there and here’s the things that we consider.” explains Matt. “And they can ask questions, and sometimes they have their CPA on the phone too. And that CPA will ask questions. Again, there’s nothing to hide here. We’re trying to make it completely above board transparent, open and honest about everything that went into the valuation and how the value was determined.”

At DDSmatch Southwest we provide a Trusted Transition Process that allows you to sell your dental practice with confidence. This clear and consistent path will take you from thinking about your ideal transition to completing a successful sale. If you are 3-7 years away from retirement we recommend working with our experts to get the most out of your life’s work with our Practice Optimizer Experience. This program will walk you through everything you need before retirement, including an Ideal Retirement Calculation, Estate Preparedness Plan, Dental Insurance Navigator, and more. We will guide you through your final years of owning a practice so you can move on to the next phase of your life confidently.

Even with the ups and downs of the past year, now is one of the best times to transition your dental practice. As Matt pointed out above, you do not need to be concerned if a COVID shutdown affected your practice’s production in 2020. Take advantage of the current sellers market and contact DDSmatch Southwest for a consultation. Get started by visiting our contact page or calling 855-546-0044 today. 

Cost Effective Ways to Build Value Before You Sell Your Dental Practice

Owning your own dental practice is more than just a job. As a small business owner you care for patients, pour your time and energy into building your practice, make day-to-day business decisions, and manage employees. When it comes time to sell your dental practice, how do you know you will reap the benefits of the time you poured into the practice? Unfortunately, many dentists in Austin don’t think far enough ahead and make small mistakes that end up costing them big when it comes time to sell. When you’re five years away from selling your practice it is time to start thinking about building value in your practice.

Investing in Your Practice Before Selling

There are two extremes when dentists think about preparing their practice for sale in Austin. The first is to pour as much money into the practice as possible, with the idea that they will get it back, and then some, after the sale. These individuals remodel their office, buy new dental chairs for every exam room, upgrade their digital equipment, revamp their websites, and more. This approach can easily cost tens of thousands of dollars. These doctors are not likely to recoup this investment when they sell their practice.

The second extreme we see is to do nothing. Dentists who have been practicing in the same office for 30 years do not want to bother upgrading anything just a few years before they retire. Why waste money upgrading your billing software and training your staff when the next owner might switch to a different system right away? These dentists will likely see less interest in their practice and may not get what they could have from the sale.

So, which is the right way to go about things? The answer is: neither. After over 20 years in the dental industry, our team of transition experts has seen it all. The truth is, most dentists will land somewhere in the middle of these two extremes. No matter what, it is a good idea to get a preliminary practice valuation to see what your practice is worth now, and learn how you can increase that value before you sell. Our team works with the valuation experts at Blue & Co.  to provide fair and reliable practice valuations. Learn more about what goes into this report by visiting our dental transitions blog. If you’re just getting started, there are a few low-cost ways to upgrade your practice and get the most out of your sale.

Replace Your Handpieces Before You Sell Your Dental Practice

Despite the wide availability of electric handpieces, Dental Economics reports less than half of dentists use them. Dentists who still use air-driven handpieces often ask what the advantages of switching to electric are, considering the cost to upgrade. While making this switch certainly isn’t a “must have” for every dental office, we think the advantages outweigh the cost most of the time. Here are just a few ways you and your patients will benefit:

  • Torque: Electric handpieces provide consistent, and higher, levels of torque when compared to air-driven devices. This allows for smoother and more efficient work. Not only will your patients appreciate this, it will allow you to work more quickly and increase your patient load (increasing your production and, therefore, the overall value of your practice).
  • Noise and Vibrations: While dentists are used to the noise and vibrations of air-driven handpieces, many patients are made uncomfortable. In addition, the chattering caused by air-driven handpieces can produce a less efficient cut. Electric handpieces are more comfortable for the patient, and provide a smoother cut. Happier patients are more likely to return, and a stable patient base is integral to practice valuation.

If you are considering purchasing a new handpiece before you sell your dental practice in Austin, look into electric handpieces. There are plenty of models to choose from, with varying price levels and features. When you’re looking for the right model consider the attachments included, how much the model weighs, and how much maintenance it requires. 

Electric handpieces are relatively inexpensive, but they can add great value to your practice, which is why we recommend this upgrade for many dentists. Increased comfort and efficiency will mean higher levels of satisfaction from patients and a greater number of patients served. Both of these factors will increase the value of your practice. Still unsure if new handpieces are worthwhile? Check out Dental Economics in-depth review of the pros and cons here

See the Difference with an Intraoral Camera

Much like electric handpieces, intraoral cameras can add great value in terms of patient satisfaction. In addition, they aid in establishing a trusting relationship between patient and provider, whether you are just getting your Austin practice off the ground or are ready to sell your dental practice. 

During an exam, you and your team take note of areas that need extra attention, but your patients must simply take your word for it. Established patients typically have no problem with this, but newer patients might be more skeptical. An intraoral camera shows patients much more than they can see in a handheld mirror. With the help of an intraoral camera your patients can see exactly what you see, lending increased legitimacy to your recommended treatment plan.

In addition to seeing things like cavities, intraoral cameras can be used for patient education and increased buy-in when it comes to routine dental care. Show your patients the spots they tend to miss when brushing and flossing. Use pictures to document your patient’s progress over time so they have evidence of how routine dental care, or lack thereof, impacts their oral health.

At this point you may be asking, as a dentist with a well-established practice, why do you need this upgrade? If you’re planning to sell your dental practice in the next five years you need to make sure that you are growing, and your patient retention rate is high. With the help of an intraoral camera your current and new patients will have increased confidence in you, be more likely to comply with your treatment recommendations, and recommend you to their friends. All of these factors lead to an increase in production which boosts the value and attractiveness of your practice.

Give Your Practice a Fresh Face

How long have you practiced at your current location? For Austin dentists preparing to retire and sell their practice the answer could be 30 years or more. During that time funds were likely directed towards things like upgraded equipment and marketing campaigns rather than a new coat of paint or updated decorations. And, as long as the wallpaper is not starting to peel and there are no unsightly stains on the carpet, that was not a problem. However, when you are preparing to sell your dental practice in Austin you should try to think both like a patient and a potential buyer. 

We typically do not recommend remodeling your entire office, but small cosmetic upgrades can be a good investment. If you’re having trouble deciding what needs to be upgraded around your office try this simple exercise. Park in the patient section of the parking lot and imagine you are arriving for your first appointment. How does the outside of the building look? Curb appeal is important, even for dental offices. Enter the waiting room and sit in the chairs. Are they sagging or cracked? Does the paint or carpet have stains? Does the waiting room feel welcoming? Continue through the office taking note of the sights, smells, and atmosphere. Recruit your office staff and hygienists in this exercise as well, they will likely have an opinion if asked. A few small upgrades will go a long way in making your office feel more inviting, without breaking the bank. 

Making the Switch to Digital Before You Sell Your Dental Practice

The use of an x-ray machine is invaluable in dentistry, and technology in this area has come a long way in the past decade. However, not every dentist has changed with the times, and a significant number are still using outdated x-ray machines. Many dentists who are nearing retirement do not see the point in upgrading to digital radiography. Between the cost to install a new system and the learning curve for the dentist and staff it simply does not seem worthwhile. 

While these arguments are valid, what they fail to recognize is that digital radiography isn’t just the future of dentistry, it’s the present standard. Younger dentists have not been trained on older x-ray machines. They will be less likely to buy a practice that has not been updated to digital technology as this will require that they either learn quickly how to use the older system, or immediately invest in a new system. Investing in digital technology is not inexpensive, but in most instances it is worthwhile because it increases your practice’s value, and makes it much more attractive to buyers. 

What to Avoid Before You Sell Your Dental Practice in Austin

As we mentioned above not every investment in your practice is worthwhile when you are preparing your practice for sale. Large equipment purchases, other than making the switch to digital, typically do not bring a return on investment. Unless your equipment is malfunctioning or your software is out of date to the point it is unusable, we recommend holding off on replacing it.

Our best piece of advice for dentists preparing to sell their practice is to avoid making rash decisions. Think through the usefulness of each purchase, consider whether it will add value in the short term, and ask for the advice of your dental CPA and practice transition specialist. Making the right kinds of updates, like those mentioned above, will add tremendous value to your practice. Some updates we recommend avoiding before you sell your dental practice are:

  • New Furniture: Too often we see dentists replacing perfectly good waiting room furniture or dental chairs simply because they are the “wrong color.” Unless the furniture is broken, stained, or frayed, most buyers will not care or notice if you replace them.
  • Billing Software: Your office staff is used to a certain flow, and even if a new billing software promises more efficiency, there is always a learning curve. Slowing down collections in order to train your staff is not useful when you are trying to build value in your practice. That said, if your software is so out of date it is difficult to use, it may be a good idea to replace it.
  • Anything that Provides Long-Term Value: Plenty of equipment in your dental office is made to last a decade or more. This is great when you are first starting out, as your cost per use goes down over time. However, if you are making a large equipment purchase and planning to use it only for the next three years until you sell your practice, it does not make sense to buy.

Market-Driven Decision Making

When you are planning to sell your dental practice in five years or fewer, it is a good idea to invest in your practice in practical, cost-effective ways. Your goal should be to increase production, decrease overhead, and make your practice as appealing as possible to buyers in your area. This is why it is so important to work with a team of experienced professionals including a dental CPA, dental attorney, and dental practice transition expert. Your team will help you determine which upgrades are worthwhile, and which are a waste of money and time. 

One of the biggest factors in determining which upgrades are worthwhile is your local market. Dental practices in Salado will not have the same needs as practices in downtown Austin. In fact, it might make sense for one of those practices to remodel their office, while the other practice only touches up the paint. Working with a transition expert is key to determining the needs of your specific practice.

If you are considering selling your dental practice in the Austin area, or anywhere in the Southwest, contact the practice transition experts at DDSmatch Southwest today. With over 20 years in the industry we can help you determine which steps will add the most value before you sell your dental practice in Austin. Set up a consultation by visiting our contact page or calling 855-546-0044. 

4 Tips For Dentists Selling a Dental Practice Before Retirement

One of the best things about owning your own dental practice in San Antonio is knowing you have the power to choose how your career progresses. You decide when the time is right to plan a future transition, take on an associate, selling a dental practice, and retiring. Knowing this, you may assume that many dentists choose to retire earlier than individuals in other professions, reaping the benefits of a lucrative career. However, according to the American Dental Association, the average age of retirement for dentists was 69 in 2017. Not only is this more than the U.S. average retirement age of 63, it is an increase from 2001 data which found the average dentist retiring at the age of 65

There may be several reasons for this, one being that dentists love the work they do and choose to practice longer. According to U.S. News & World Report dentistry is in the top 10 best jobs in part because of the high salary, low stress, and great work-life balance. Another reason dentists might retire later may be that they aren’t financially ready to retire and maintain the lifestyle they have become accustomed to. Many dentists are not aware that in order to retire they will need to save a significant amount of money in addition to the money they will get from selling their practice. 

How do you ensure you land in the camp of dentists who can retire when they want? Between your current investments and selling a dental practice in San Antonio you should have enough money to carry you through your final years living the lifestyle you want. Retirement success isn’t something you stumble into, it is something you plan carefully for. Read our tips below to learn how you can start preparing today to retire on your terms.

Tip #1: Look at Your Lifestyle

The ADA reports, “The average net income for dentists in private practice in 2019 was $204,710 for general dentists and $343,410 for specialists.” This income is far above the U.S. average net income of just over $51,000 in 2019. These numbers likely come as no surprise to most dental professionals, but it is important to point out that a larger average income likely means higher average expenses. 

There is nothing wrong with having higher expenses, in fact you should be able to enjoy life both before and after retirement. However, make sure you account for all your expenses when planning for retirement. Think about both the lifestyle you currently lead and your retirement goals. Will your current investments and the profits from selling a dental practice allow you to do things like travel, eat out, and live comfortably during retirement? Or will you need to scale back your expenses in order to make your money last? It is important to note that retirement could last 25 years or more. If you do not have enough money set aside to maintain your current lifestyle and retire in the next few years you need to determine what your priorities are. Do you want to cut back your expenses so you can retire sooner, or work longer than you planned in order to put aside more for retirement?

These are obviously very personal and individualized decisions and should be made with the help of an experienced financial planner. At DDSmatch Southwest we encourage our clients to review their investments regularly, especially as they move closer to retirement. As part of our Practice Optimizer Experience we partner with HK Financial Services to perform a Retirement Check-Up. The experts at HK Financial Services will review your investments and projected future income in order to help you plan and time your retirement, including when selling a dental practice makes the most sense. This Ideal Retirement Calculation can be done in tandem with your current financial advisor, or simply as a supplement. Either way, it is important to get a full picture of your financial situation well before retirement so you can retire on your own terms.

Tip #2: Know How Much Your Dental Practice is Worth

You probably know how much money you have in your checking and savings accounts, what your investments are worth, and how much your home is appraised for. But do you know how much your dental practice is worth? Your dental practice may represent a large portion of your net worth, and will impact how much money you have to live off of during retirement. For that reason, it is almost impossible to make a retirement plan without an accurate estimate of your dental practice’s value. Unfortunately, many dentists nearing retirement rely too heavily on their practice’s perceived value without actually knowing what that value is. When it comes time to sell they are left with a smaller nest egg than they thought.

How do you get an accurate picture of your practice’s worth? Selling a dental practice in San Antonio involves more than just calculating the average of the practice’s collections in the past few years or finding the value of the equipment included. Our business valuation partners at Blue & Co. provide clients with a 70 page report detailing every financial aspect of the practice. They review specifics and ask questions such as, why did your marketing expenses increase by 10% in one year? Did that 10% increase result in an increase in revenue? In a post-COVID market it is especially important to parse out these financial details. Sterilization costs likely went up in 2020, while patient loads were down. However, as the industry recovers, your costs should follow a predictable curve. An expert valuation will account for situations like this. For more information on how practices are valued post-COVID visit our dental transitions blog. 

Our Practice Optimizer Experience recommends dentists who are planning to retire in the next five to seven years have two valuations performed. The first valuation at the beginning of your journey will show you what your practice is worth right now. Getting a clear picture of your practice’s worth well in advance of selling a dental practice in San Antonio is helpful for several reasons. 

  • You and your financial advisors can use the information to more closely estimate your net worth, and determine whether or not you are on track to retire on your timeline. 
  • If your practice is not valued as highly as you would like you can use the valuation to set growth goals. The transition experts at DDSmatch Southwest use Dr. Charles Blair’s “Practice Booster Clinical Treatment Analyzer” to uncover your practice’s unused potential and maximize growth.
  • You can use your valuation to plan out how much you need to work before retirement. Taking steps such as reducing your hours or adding an associate will affect your practice’s value, and you need to make sure your practice is prepared for the changes.

Then, when you feel you are ready to list your San Antonio practice, it is time for the second valuation. This valuation is what will be presented to your buyer. The valuations performed by our partners at Blue & Co. are accurate, fair, and trusted by banking institutions. For more information about what goes into your valuation contact our team of transition specialists.

Tip #3: Your Roadmap to Selling a Dental Practice

Once you know how much money you need in order to retire on your terms, and what your practice and investments are worth, it is time to make a roadmap. First, if you do not already have a team of dental transition experts in place it is time to gather them. Your team should include a dental CPA, dental attorney, and practice transition specialist. These experts will guide you during the final years of your career, helping you make decisions that will benefit you in retirement. For example, your team may help you determine whether buying new equipment for your office will result in a return on investment or just wasted money. 

When you have a team of trusted advisors in place you need to answer some important questions about how your final years will play out. A few things you need to review are:

  • If you do not have enough money to retire when you want, how can you add more to your nest egg?
  • Are you looking for a buyer who will pay top dollar or are you more concerned with maintaining the legacy you have built after selling a dental practice?
  • Do you want to take on an associate to cover some of your patient load while you make a gradual exit? Your advisors will help you determine whether your practice is financially able to carry another dentist and how that will affect your current lifestyle.
  • Is there a date you must sell by? How flexible are you with your timeline?
  • If you need to increase your practice’s value before you sell what are the best ways to do so, and when will you need to start these processes in order to get the best return?

As we mentioned above, DDSmatch Southwest partners with HK Financial to help our clients plan out their financial future. The experts you work with will help you map out your ideal retirement, giving you steps to make that dream a reality. Do you want to travel more after you retire? Buy a vacation home? Help your grandchild pay for dental school? If you do not have a big enough nest egg to support your ideal lifestyle your financial advisor should help you determine how much you need to put away in order to meet your goals, in addition to your current investments and the proceeds from selling a dental practice in San Antonio. 

A dental CPA is also invaluable in this process, as they will give you information on the tax benefits of certain retirement accounts, investments, and more. During the process of selling your practice your dental CPA will advise you on asset allocation, which determines how much of the money from the sale you actually keep. If you do not already have a CPA who works specifically within the dental industry talk to one of our transition experts for a referral.

Planning at least five to seven years ahead of your intended retirement date will give you more control over your career, allow you to finish well, and leave the legacy you intend. With the right team in place you can be sure your interests are being promoted at every turn. A detailed, yet flexible retirement roadmap will allow you to move confidently toward retirement knowing no details are overlooked. 

Tip #4: Contact Dental Transition Experts Before Selling A Dental Practice In San Antonio

How far away is retirement for you? The earlier you start planning for retirement the easier it will be to transition on your own terms. Even if you are just starting your career in dentistry you should be thinking about the future and putting money away for retirement. If you aren’t sure where to start, or if now is the right time, contact the DDSmatch Southwest transition experts. Our team works with dentists at every stage, but we offer a special experience to those transitioning into retirement. Our Practice Optimizer Experience was developed for dentists who are within 3-7 years of retirement. Your transition experts will walk you through these steps, ensuring no detail is overlooked.

  • Conceptual Transition Experience
  • Trusted Valuation Analysis
  • Ideal Retirement Calculation
  • Estate Preparedness Gameplan
  • Dental Insurance Navigator
  • Clinical Opportunity Blueprint
  • Critical Metrics Analysis
  • The Trusted Transition Process

Our job at DDSmatch Southwest is to ensure a smooth transition for everyone involved. We know that for dentists moving into retirement there is a lot of stress involved with selling a dental practice. We are here to take some of that stress away through planning, preparing, and prioritizing for your future.

Whether you are ready to list your San Antonio practice today, or the process is still years away, we are here for you. Request a consultation with our dental transition specialists by visiting our contact page or calling 855-546-0044. 

How to Add Value Before You Sell a Dental Practice

Your dental practice represents years of hard work, a career spent building your patient base, training employees, and forming relationships with the community. When you decide it is time to retire and sell a dental practice in Texas and New Mexico, how can you be sure you are getting the true value of your investment? When retirement is three to five years away, it is time to consider whether you can build additional value in your practice.

Making a Plan for Success

Before you take any steps toward selling your practice you should have an idea of how much the practice is worth, and how much you need to make on the sale in order to retire the way you want. If you don’t know where to start contact one of the DDSmatch Southwest practice transition specialists. Our Practice Optimizer Experience was created especially for dentists planning on transitioning their practices in five to seven years and covers everything you need to help you plan for the future. The first step is simply sitting down with one of our transition specialists to determine your vision for the future. What goals do you want to achieve before and after you sell a dental practice? What is your ideal transition timeline? Once you lay out some of these specifics you can create a roadmap to retirement success.

Why Business Valuation is Crucial to Building Value

You have likely heard of business valuation as something you need in order to determine the value of your practice before a sale. A business valuator will look at everything involved in your sale, from the physical equipment to your monthly cash flow, and determine its economic value and appropriate sales price.

At DDSmatch Southwest we recommend those moving toward retirement should plan to have two valuations performed. The first analysis will be at the beginning of the process, three to five years before you plan to list your practice. This valuation will give you a full understanding of what your practice is currently worth, and provide insight into how you can increase the value before you sell. For dentists moving toward retirement this first analysis is crucial for wealth management purposes.

Any business valuation done before you sell a dental practice in Texas and New Mexico should be performed by third party valuation experts, which is why we partner with Blue & Co. for fair and reliable valuations. The experienced professionals who perform your analysis will take a holistic approach to finding your practice’s value. 

Matt Howard, a dental CPA, accredited business valuator, and certified valuation analyst, explains the process saying, “The first part of the business valuation always has historical numbers of the practice.” After looking through these historical numbers, Matt explains, “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 on inside the practice,” Once they have finished their analysis, including gathering and incorporating feedback from the seller, they will provide a detailed report. 

Ideally your valuation will show that your practice is worth enough to carry you through retirement. However, this isn’t always the case. What happens if the value of your practice does not match up with your goals for the future? The good news is, most dental practices have significant, untapped opportunities for growth. Value can be added in many ways before you sell a dental practice, but as you inch closer to retirement you must be careful how you spend your time and money, as not every investment will yield a return.

Remodels and New Equipment: Is Now the Time to Invest?

One method some dentists turn to before listing their practice is remodeling the office space or buying new equipment. This method, according to Matt Howard, is not always effective for dentists who are selling their practice within five years. “Significant remodels at that point would probably not be a complete one-for-one return on your money” says Matt. 

Of course, there are several exceptions to this rule. For example, if your practice has not made the switch to digital technology now is the time to invest. The reason for this is that many dentists are not trained to use the older equipment, especially if they are newly out of dental school. Not only will new digital equipment increase the value of your practice, it will make your practice more marketable. 

One other area that is an exception is a basic tidying and sprucing up of the office. When you sell a dental practice in Texas or New Mexico you want to put your best foot forward. Housekeeping tasks such as a quick coat of paint go a long way in making your office look nice, without spending thousands of dollars on a remodel or brand new equipment.

Before making any large purchases or major renovations talk to your team of experts. Your dental CPA can explain any tax implications, and your transition specialist will be able to advise you on whether your plan will attract more buyers. Remember to keep your end goal in mind: a successful transition into retirement.

Maintaining Your Practice’s Value Through Production

Unfortunately one of the steps many dentists make in preparation for retirement is to slowly decrease their hours. While there is nothing wrong with wanting to make a gradual exit, you have to be aware how it affects your practice’s value. When you sell a dental practice the buyer will want to see evidence of its value through production. 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.”

If one of your transition goals is to slowly decrease your hours to one or two days per week, consider bringing in an associate to pick up the slack. With two doctors in the practice this method can even lead to increased production and collections, bringing your value up even more before you list your practice. However, there are other considerations when bringing in an associate and you need to make sure your practice can support an additional doctor. Visit our blog to learn more about the advantages of bringing in an associate before you sell.

Increasing Value Through Your Patient Base

Whether you choose to maintain your current hours, or bring in an associate so you can decrease them, you need to make sure your practice is still bringing in and retaining new patients. Ideally, in the three to five years before you sell a dental practice in Texas or New Mexico, you should have 25-30 new patients each month, with a 12-14% attrition rate. If your practice isn’t meeting these benchmarks, try to find out why. Some factors to look at include:

  • Marketing Efforts: Is your marketing strategy bringing in 25-30 new patients each month? If not, take a look at your current strategy and determine how you could adjust it to bring in more new patients.
  • Patient Turnover: A new patient may visit once, but if they do not make a second appointment they cannot truly be considered an active patient. Focus on turning new patients into active patients.

Patient turnover can have several causes. Investigate your current method of appointment scheduling to ensure it is easy and quick for patients to accept their care plan and set up their next appointment. Take a look at the overall patient experience. From the time a patient walks in the door you want to ensure they are greeted warmly and feel comfortable. An increasing patient base is one of the most valuable parts of any dental practice, which is why it is crucial to understand and get control of before you list your practice.

Revisiting Insurance Payments Before You Sell a Dental Practice

When was the last time you examined the insurance makeup of your practice? A significant number of patients choose their dentist based on their insurance benefits, which is why you need to take it into consideration when you are trying to build value before a sale. Look at the plans you currently work with, and consider the profitability of each one. As in any business, you should only offer services that bring a profit. 

If the services you are offering under a specific insurance plan are not profitable it is time to rethink your participation in that plan. After looking at the data some dentists decide to go out-of-network with certain insurers, but this isn’t the only option. Depending timing and where your practice is located you may be eligible to renegotiate plan rates. No matter what you choose, keep in mind that your end goal is to build your patient base and increase your practice’s value.

Sell a Dental Practice and Retire with Confidence

One of the best things you can do at the beginning of your retirement journey is to seek out the advice of a dental practice transition specialist, dental CPA, and dental attorney. These professionals have seen numerous dental practice transitions, and know what works when you are trying to build value. With a panel of trusted advisors you can be sure that you are making the right choice every step of the way.

As we mentioned above, the transition specialists at DDSmatch Southwest created a roadmap for dentists heading toward retirement, providing expert advice at every stage. Our Practice Optimizer Experience has helped countless dentists plan, prepare, and prioritize for their future. Here is what you can expect:

  • Conceptual Transition Experience: Sit down with our experts to determine your goals for before, during, and after your transition.
  • Trusted Valuation Analysis: As we detailed above, a reliable business valuation is crucial to anyone listing their practice. Our business valuation partners will analyze your practice twice, once at the beginning of the process, and once before you sell a dental practice.
  • Ideal Retirement Calculation: A financial review of all your investments and projected future income is needed to ensure you can retire comfortably. DDSmatch Southwest partners with HK Financial Services to provide a Retirement Check-up, either as a third-party opinion or alongside your current advisor’s calculation. 
  • Estate Preparedness Gameplan: Your estate should be prepared and protected in the event of an unforeseen death or disability. Our experts will refer you to a local attorney to create essential legal documents such as a will or trust.
  • Dental Insurance Navigator: As we touched on above, you should review the insurance plans in place before listing your practice. We arrange a customized consultation with Shelley DeGroff of Integrative Dental Solutions, a PPO Advisor, who will advise you on your current payer mix. 
  • Clinical Opportunity Blueprint: In order to pinpoint untapped growth opportunities in your practice we use Dr. Charles Blair’s “Practice Booster Clinical Treatment Analyzer.” This 70-page report will reveal ways you can add value before you sell a dental practice.
  • Critical Metrics Analysis: Your practice is constantly changing, especially as you focus on adding value before retirement. We provide periodic, customized reports aimed at keeping your practice producing at a high level.  
  • Trusted Transition Process: When you are ready to move forward with your transition our experts will start you on our Trusted Transition Process™. This roadmap lends transparency to the process of preparing and listing your dental practice, and will carry you through to the other side of your transition. 

While we are able to give general advice that applies to most dental practices in Texas and New Mexico, your specific practice needs a specialized approach. The transition specialists at DDSmatch Southwest have helped hundreds of dentists buy and sell practices across Texas and New Mexico, bringing a wealth of knowledge to the process. It is never too early to start planning, preparing, and prioritizing for your future. 

If retirement is three to five years away contact the experts at DDSmatch Southwest. When the time comes to sell a dental practice in Texas or New Mexico you need experts on your side who can advocate for you, protect your legacy, and ensure your transition into retirement is successful. Contact our team today by calling 855-546-0044.

Appraising a Dental Practice for Sale

Buying a dental practice is not something you do on a whim. Most dentists considering a transition spend significant time in the planning stages, from the time they first consider making a purchase to when they put an offer on a dental practice for sale. The dental practice you choose to buy will likely become the practice you grow throughout your career, and will be your legacy when you retire. It represents a significant investment, both financially and emotionally, which is why it is important to make sure you buy the right practice for you. 

While there are many factors to consider before purchasing a dental practice, the focus of this article is the appraisal. The appraisal will give you a clear picture of the finances, business model, and inner workings of the practice. This allows you to make an informed decision about whether or not you could succeed after taking over the practice. Below we outline what information you should request when appraising a dental practice.

You may notice we recommend requesting quite a bit of data as part of the appraisal. Is all of this data necessary, and what happens if the practice you are buying does not have the data you ask for? When making a large purchase like this you need a full picture of what you are buying, which is why every little bit of information helps. Most dental practices for sale in Texas and New Mexico have the software necessary to track and store all the information you will need, so obtaining all the data should not be an issue. However, don’t write off a dental practice just because they cannot provide you with every piece of information you request. Raise a red flag, then dig a little deeper to find out why they cannot provide what you are requesting. Are they unwilling to share information? Do they simply not have the tools to track the data you want? Talk to your dental transition specialist and team of advisors for advice on how to move forward, and whether or not to walk away.

Appraising the Facility

The first thing you should do before considering a purchase is visit the physical location. Take a tour of the space and try to picture yourself working there and growing the practice. During and after your visit consider these factors as part of your appraisal.

  • Equipment: What equipment is included in the sale? How old is the equipment? If the doctor putting their dental practice for sale has not upgraded to digital equipment is that a dealbreaker?
  • Expansion Opportunities: Does the space allow for expansion in the next 5-10 years? If you plan on expanding your practice to include more services or additional associates you do not want to be limited by the space.
  • Location and Vision: How does the physical location fit with your vision for the practice? Will it attract the type of patients you intend to direct your marketing to?

As you can see some of the facility details could affect the price, such as the equipment, while others only affect whether the practice will be a good fit. Keep in mind that when you are looking for a practice to buy you may have to compromise in some areas, such as the exact location of your future practice. A certain practice may be a great fit, even if it is a few miles from your desired location, or does not have updated equipment. Talk to your team of advisors for advice on what can and cannot be changed about the physical location and its contents, and how these changes may factor into the sales price. 

Financial Data to Request from a Dental Practice for Sale in Texas and New Mexico

It goes without saying that each appraisal should contain a significant amount of financial information. But what kind of financial information goes into each appraisal? As we mentioned above, requesting as much information as possible will only help you make an informed decision. Modern dental practices typically have the software necessary to track the information you need, and the selling doctor should be willing to share it. Here is the financial information you should have as part of the appraisal:

  • Tax Returns: At least three years of tax returns should be provided.
  • Practice Valuation: A third party valuation performed by an experienced valuator is invaluable in the dental transition process. DDSmatch Southwest works with Blue & Co. to provide accurate practice valuations. For more information on what goes into a business valuation visit this page.  
  • Lease Agreement or Real Estate Appraisal: Does the selling doctor own the real estate? If so, does he or she intend to sell it with the practice or lease it to you after the sale? Buying the real estate is a separate transaction from buying the dental practice. If the office space is currently leased by the selling doctor, find out the terms of the lease and what you need to do to take it over.
  • Cash Flow Model: How much money can you expect the practice to make after your transition? A cash flow model will help you get a good picture of how the business will work for the next five-to-ten years. The model should consider growth rates, factor in both variable and fixed costs, the debt payments needed to finance the transition, and how much you need to support your lifestyle. 
  • Production and Collection Reports: These reports allow you to see the production and collections of each employee, as well as how much revenue each procedure brings in. Knowing the current collections and production will help you plan for the future of the practice, especially if you know which employees plan to stay on after the transition.
  • Aged Receivables Report: How many outstanding payments does the dental practice for sale currently have, and what is the average length of time an invoice is outstanding? Too many outstanding accounts, or a significant amount of time between sending an invoice and receiving payment could indicate the practice is in trouble.
  • Employee List: The salaries and benefits of each employee should be provided in order to give you a full picture of the overhead costs of running the practice.
  • Financing Information: Lenders take two important factors into consideration when deciding whether or not to finance your purchase. First, the creditworthiness of the buyer. Second, the ability of the practice to continue producing enough to cover the loan. In addition, the buyer will need to provide or borrow working capital for the first few months after the transition.

Before moving on from the financial section we want to address what is surely on everyone’s mind when it comes to valuing a dental practice. One of the most frequent questions we have received in the past year is, “how do you know a practice’s true worth after COVID-19?” The value of a dental practice for sale is based partially on production and collections from the last few years. However, these numbers were greatly impacted by COVID-19 as offices were ordered to shut down or only see emergency patients for a time. Now most practices are back open, but production may still be lagging behind what it was in years past. The selling doctor wants to make sure they get what their practice is truly worth, while the buying doctor wants to have confidence the practice will continue to grow. To address these concerns we wrote a piece outlining the way business valuators are handling valuations in this unprecedented time. Learn more by visiting this page

Practice Characteristics to Consider

One of the great things about buying a practice as opposed to building your practice from the ground up is that much of the hard work is done for you. A typical dental practice for sale in Texas and New Mexico has a solid patient base, knowledgeable employees, contracts with insurance companies, and a legacy you can use to build your career upon. However, just because these things exist within a practice does not mean they are being utilized well, or that you are the best fit to carry on the work. Analyzing the patient and practice characteristics below will not only help you determine the practice’s worth, it will also provide insight into whether or not you will be a good fit to take over the practice.

  • Active Patients: How many patients have visited the practice in the last 12-18 months? 
  • Insurance Patients: Of the active patients, how many are on insurance and how many are cash patients?
  • New Patients: How many new patients does the practice bring in each month?
  • Overall Patient Demographics: What age group is most prevalent in the practice? Do most patients come from a specific area code? Demographic information will inform your future marketing efforts.
  • Hygiene Appointments: What percentage of appointments at the dental practice for sale are for hygiene? How significant is the revenue from hygiene appointments?
  • Insurance Adjustments: What insurance companies is the practice currently contracted with? How much does each insurer reimburse, and is there room to negotiate new terms?
  • Fee Schedule: Take a look at the list of procedures and fees associated with them. How do they compare to other practices in the area?
  • Employee Schedules: Review the weekly schedule of each employee, including the doctor and associates, to learn more about the flow of work in the practice.
  • Office Hours: Dental offices can vary in hours of operation. Find out which days and hours the office is open and determine whether or not the schedule suits your personal needs. We do not recommend changing schedules immediately after a practice transition. However, changing the office hours can be done in the long term.

As you can see, a dental practice appraisal is much more than a report detailing how much money the dental practice for sale is worth. There is much to consider beyond the price of the real estate and equipment, and you will likely find yourself pouring over the data trying to decide which factors are most important to you. That is why we recommend working with a team of experienced advisors. A dental CPA, dental attorney, and practice transition specialist will help you determine whether or not a practice is viable, and whether or not you are a good fit for taking it over. Success starts with careful planning, dedication, and knowledge of the process that comes from experience.

Finding the Right Fit

Many of the factors involved in an appraisal dive into both personal and professional territory. If you take on a practice and immediately change the hours, insurance providers, or fee schedule you risk losing your patient base and therefore your cash flow. However, the way you feel about your new practice will flow over to the atmosphere of the office, affecting the patients and staff. If you hate how it was run in the past, but don’t change anything because you worry about losing patients you may lose them anyway because of the new atmosphere. This is why, when you are looking for a dental practice for sale in Texas and New Mexico, it is so important to find the right fit.

At DDSmatch Southwest we focus on matching buyers and sellers in a way that benefits everyone involved. A dentist who lists their practice for sale is listing more than just the physical contents of the practice. They are parting with the legacy they built over many years. They should expect to be compensated in a way that reflects what they spent their career building. In the same way, buyers want to know that the legacy they are buying into will continue to thrive as they pour their time and energy into it. Each party wants a smooth transition and long-term success. With the help of our transition experts, and our clearly established Trusted Transition Process™, buyers and sellers know they can move forward with confidence. When you’re ready to move forward with your dental practice transition contact the experts at DDSmatch Southwest by calling 855-546-0044.