Let’s talk about the benefits of buying a rural dental office for sale. There are a lot of dentists out there that just think a city is where they need to be to have the practice they want. What would you say to people about considering smaller towns? Has it been good for you?
Oh, absolutely. I wholeheartedly support and agree going rural for opening a practice. Trying to make it in the big city, especially as someone new-ish coming out of dental school. “New-ish” being, you know, five to maybe seven years out of school.
Everybody’s business background is going to be different and, for me, being in the military, I never had to worry about the money issue. It was, “Okay, you need a crown. Let’s do a crown,” kind of thing. But trying to make it in a bigger city like Lubbock, or Odessa, Midland, somewhere like that, it’s going to be a lot harder and you’re going to have to look into participating with insurance, figuring out how to do reimbursements, things like that.
So, can you open a practice in a big city like Lubbock just on your own? Yes, you can. But it’s going to be much more difficult. I would wholeheartedly support and suggest looking into rural practices. The people need the treatment. They will come from, in some cases, hundreds of miles away to get the treatment. And at the end of the day, they know how much work went into it and they are so, so appreciative.
When you’re in the military and you have a bunch of 17 and 18-year-old kids, they don’t necessarily really understand how much work goes into things. They’ll say things like, “Yeah, I don’t know what I’m here for today. My leadership told me I had to come for an appointment today.” While they cooperate and do everything, here’s a case where you worked hours and hours on something, and they take a look at it and they’re, like, “Yeah, looks okay, I guess.”
So, you really kind of lose that love and that drive to do dentistry. Within the first week or two being in Floydada, I found that I was loving coming to work. I found that I loved getting to know and interact with my patients, and just having those moments where patients will cry because of how beautiful their teeth look again, and how they’ll fall over themselves to thank me for the work and everything that I’ve done. It really, really helped me reaffirm why I got into dentistry in the first place.
Let’s talk about your hopes for the future. We’ve talked to a lot of retiring dentists, and they have all sorts of plans of all the fun that they’re going to have. But we haven’t talked to a lot on the buying side. What are your hopes for this practice? How you see it playing out throughout your career?
I definitely want to grow the practice. Being out in the rural area, the patients … They understand there’s some procedures they can’t get around going to Lubbock for, but if they can stay in Floydada, they would appreciate it.
I want to grow the practice and ultimately start doing more procedures and make it a true … as much as possible, a true one-stop shop to be able to get everything done. That’s my hope for the future, is to grow the practice to really make it a well-rounded family dentistry practice.
Going back to rural practices, people might be worried about, “How do I market myself? How do I get more patients?” How are you getting patients to your practice?
Well, I would say rural is going to be more word of mouth. Those first few patients are going to be very leery, which mine were as well, because I’m not Dr. Dean and it’s a situation where you have to trust in yourself. You have to know that you’re doing the best for the patient and also treat them as you want to be treated. Treat them with the kindness and respect that you would love to have if you’re the one sitting in the chair. If you do that, it will come back to you a thousand-fold.
I do a little bit of marketing on Facebook. Dr. Dean, one of his main marketing ploys was, he would … There was a local restaurant in Floydada. He would frequent it, and if he noticed that one of his patients were sitting somewhere in the restaurant, when he went to pay he would also pay for that patient, as a sign of goodwill and “Thank you for your patronage with my practice.”
Because it’s such a wide area that you pull from, you’d want to have some face recognition. Word of mouth obviously would be huge.
We do have a website that we’re starting. It’s still a work in progress. But I want to, for those patients that are, let’s say, 45-50 miles away that are looking for a dentist, I’d like for them to be able to look at the website and look at what the practice looks like. And get to know our staff a little bit more, and what we can and can’t do for them, before having them make that trip out there.
There was also a transition letter that was sent out to all the active patients from the last five years. ddsmatch helped with that, but Dr. Dean and myself crafted it and then we sent it out to all the patients. So that was, I think, the biggest initial marketing plan that we had.
Looking for a Rural Dental Office for Sale? ddsmatch Can Help!
If you are considering a rural dental practice, here at ddsmatch Southwest, we have several available dental offices for sale in Texas and New Mexico, as well as across the country. Check out our listings online. Contact us today for more information— it starts with a conversation.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2019/10/4-dental-office-for-sale.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2019-09-26 23:36:052019-10-21 23:38:51One Doctor Explains Why You Should Consider a Rural Dental Office for Sale
We recently posted an interview with one doctor, Bill Dean, that we assisted with selling his dental practice. To shed light on the other side of the transaction, here is part one of an interview with the buying doctor, Kevin Shively, about working with ddsmatch Southwest, dental practice transition specialists, and his experience with buying a dental practice.
Could you please talk a little bit about your background and how you came to hear about ddsmatch?
My name is Dr. Kevin Shively. I’m originally from Louisville, Kentucky. How I came upon ddsmatch was, I was serving on active duty in the military in Germany and was contemplating my next step. I had found a job opportunity in Lubbock, Texas, that wasn’t everything that I was hoping it would be.
I had heard about ddsmatch when I was in dental school and it was a company that had interested me, and, ultimately, I knew that I was going to own my own practice one day. When I reached out to ddsmatch, they helped make that dream become a reality for me.
Can you just talk us through how the process went for you, from the time you first got in contact and how it proceeded?
Yes, absolutely. I accessed the ddsmatch website, the Contact Us portion, and put in some information, some basic information, name, things like that, email address. I was promptly called, I believe, within 48 hours by Andy. He started getting some background information on me, and trying to figure out exactly what I was looking for, and things like that. Because they don’t just help match up people wanting to buy practices, they also help find associateships and things like that. So, he was finding the best fit for me based on all those questions and everything. Going forward, we looked into some practices and went from there.
How long did the process of buying a dental practicetake, from when you first started looking until you finally found a seller?
Well, it’s a little misleading, because I was dragging my feet. I had a little bit of cold feet in making such a big purchase. But all in all, I would say from the first conversation I had with Andy until the closing of the practice, no longer than about seven, eight months.
Did you look at several practices or did you find the right one early on?
Based on what my criteria were that I gave Andy, we found two that were the best fit for what I was looking for. At the time, with ddsmatch, there were several practices, but not within the Lubbock, Texas, area. And being that I had just moved halfway across the world, I wanted to stay in one place.
What were the major factors for you? What were the things that you felt were important to you in finding a match?
Well, you always have to trust your gut and your instinct on things … I toured both practices. I enjoyed and liked both practices, but I had a strong sense of one practice, which ultimately was the practice that I ended up purchasing. Once I started going through the numbers and doing the due diligence, it just further bolstered my decision to want to proceed with that practice.
Did you have any “deal-breakers” that you were looking out for?
I don’t really know if I had a whole lot of deal-breakers, this being my first time purchasing a practice. I had things that I really wanted in a practice which, going forward, if I were to do this again, they probably would have been deal-breakers. But with the practice that I ended up acquiring, it was, again, like the stars kind of aligned for me for that practice.
If someone were where you were a year ago, do you have any words of advice?
I would say it is a big step. There are a lot of unknowns, but it is a wonderful path to walk down. It is challenging work, but at the end of the day it’s extremely rewarding, and it really affirms my love for dentistry, with having patients that are extremely appreciative, and just doing what I love.
In terms of staff, do you have any thoughts on the experience of coming into a completely staffed-out and ready-to-go office? Has it been challenging?
Not so much. I learned early on in the military that a lot of change right out of the gate usually backfires on you. So, that was a lesson that I learned and implemented with this practice. I acquired all the staff from the outgoing doctor, and they were very, very hesitant and leery of the transition because change is hard for everyone. I think taking incremental steps in making changes has been very well received by the staff.
What has been your experience with the patients as they’ve come in and had a chance to meet you? What’s been your approach to making sure that you hold onto those patients?
Well, it is a small town practice. The city is only 3,000 people, but I pull from about 30 miles in any direction. Every day is a wonderful experience, in that the patients are so thankful. They are very appreciative. It’s very heartfelt. Here’s someone they don’t even know. I’m introducing myself, and the first thing out of their mouth is, “We are so glad you’re here.” And it’s such a rewarding thing to hear that.
Let’s back up a bit to the process of buying a dental practice itself. What did ddsmatch bring to the table to make the process easier for you?
As far as making the process easier, I could not have done it without ddsmatch. It’s one of those situations where you just don’t know what you don’t know, so Andy and Randy were absolutely instrumental in getting this whole thing going, as far as helping with going through the numbers, the due diligence, and they went beyond the scope of what they normally do to help.
They’re more than willing to do whatever they can to help. They’ll be the first to tell you, “Hey, this isn’t my area of expertise. Here’s my opinion, but I’m going to introduce you to so-and-so, who is the absolute expert in this.” Not only do they give you their advice, they set you up with professionals that have done this several times in the past and can guide you every step of the way. So, it couldn’t have been any easier using ddsmatch.
If someone else is in your shoes, and they’re trying to make the same similar decisions, trying to decide if they want to go with ddsmatch, what would be the selling points?
Well, my main advice with using ddsmatch is, they will guide you. They will help you in doing everything in the correct order … [If] you don’t have a strong business background, they can set you up with a CPA, with a business manager. If you’re wanting to change staff, they have connections with local dental assisting schools and hygiene colleges. If you need help going through the due diligence … It’s any and everything that you could need, they help you with. And if they can’t, they know the people that can help you with it.
Trust is a big deal. For anybody who feels like, “it’s just really hard for me to trust somebody in this situation,” what would be your thoughts for them?
The reputation of ddsmatch, in my opinion, is what can help bridge that trust gap, in that they’ve been around. There’s been, in my estimation, hundreds, if not thousands, of successful transactions and acquisitions using ddsmatch. The proof really is in the pudding, and it’s by far worked out for the vast majority of clients.
It sounds like you really felt like they had your best interests at heart.
With regard to the outgoing doctor, what was your timing in terms of transitioning him out and you in?
Well, mine was a little abnormal, in that I’m still in the army reserves. Uncle Sam said, you know, “You need to go to Hattiesburg, Mississippi, for 30 weeks,” right in the middle of my transition. It was a little bit of a hiccup and, admittedly, it threw the process off a little bit.
But Andy and Randy were awesome at communicating between myself and Dr. Dean, the outgoing doctor, and working out an agreement to where Dr. Dean would be an associate for me while I was serving my country. Again, it was a wrinkle in everything, but without ddsmatch I would not have been able to get the agreement in place, and get everything situated and done to allow me to go on that mission.
In conclusion, what would be the bottom line for your advice to a dentist in your situation?
The bottom line I would give anyone is, yes, purchasing and acquiring a practice can be scary, it can be a very daunting task. There will be pitfalls in areas where you can get tripped up very easily, but that happens with everything. If you buy a car, if you buy a house, things like that can occur.
ddsmatch knows where those pitfalls can occur, and they can help you navigate around them. They can help you network with other local dentists. They can help you network with people to help grow your practice, and help you to make it as smooth a transition as possible. Ultimately, ddsmatch will make your life so much easier in acquiring a practice.
Looking at buying a dental practice? Ddsmatch Has Practices for Sale
If you are considering buying a dental practice, we have several dental practices for sale in Texas and New Mexico, as well as across the country. Check out our listings online. Contact us today for more information— it starts with a conversation.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2019/10/3-buying-a-dental-practice.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2019-09-20 23:31:452019-10-21 23:34:54From the Other Side: A Doctor Discusses Buying a Dental Practice
Wherever you are at in your career—whether you are looking at buying a dental practice, selling a dental practice, or somewhere in between—it’s a good idea to stay informed about dental practice and industry trends. If you are just starting out, you want your practice to be up-to-date. If you closer to the end of your career, you may want to boost the value of your practice by making it attractive to younger doctors who may be more aware of current trends. And at any time, it’s smart to see how you can improve your practice—either with tools that boost efficiencies, new technology, or ways to provide better patient care. To help out, we’re going to discuss some of the hot trends for dental offices in 2019.
3D printer technology is a major innovation that can have a huge impact for dentists. They can slash the time and money that you have to spend on the production of aligners, veneers, crowns, and tooth replacements. Owning your own 3D printer will allow you to manage production of these things on your own, without having to pay a third-party lab, which keeps more money in your pocket. You may need to hire someone experienced with the technology to operate the printer, but, in the long run, you may save thousands of dollars by being able to keep the production in house.
Additionally, by being able to produce items in-house, you will be measuring wait times in terms of minutes rather than days. A patient can have treatment completed in a single appointment whereas, if you rely on an outside lab, they will need to reschedule another appointment. This will be better for the patient and for your practice. It improves patient satisfaction and reduces your administrative costs.
If you are buying a dental practice, this is a great piece of equipment that you should consider acquiring.
More than ever, people are concerned about the materials they use, especially those they put into their mouths. Products like bamboo toothbrushes and charcoal toothpastes are becoming more popular. Consequently, practices that have integrated natural product options will attract patients for which these things are important. It’s a simple, low-cost change, and can easily be added to your existing marketing techniques.
Even if you don’t want to fully commit to this, it’s a good idea to review the products you do have for the inclusion of unnecessary chemicals and see whether there are better options for your patients. Consider whether you can provide options that are healthier and more sustainable.
Any dentist with experience knows the frustration of dealing with cracked and deteriorating casts. You don’t have to put up with this. Computer-aided design (CAD) and computer-aided manufacturing (CAM) software can be used to create more reliable impressions. The fact is, this is the way the industry is going, it’s simply a matter of whether you are coming along. New doctors are going to want this technology, so if you are looking to add a dental associate or considering selling a dental practice, you should consider this upgrade. It will make your practice more attractive.
Laser technology is a growing trend and for good reason. It’s a technology that has a major impact on the quality of patient care you can provide and its benefits are readily apparent to the patients. For this reason, it’s a good thing to consider if you are looking to add value before you sell a dental practice, if you are looking to expand your practice, and if you are looking for ways to add value after buying a dental practice.
Among the many uses of laser technology, you can whiten teeth, remove tooth decay, repair enamel before filing, reshape gums, remove bacteria during root canals, and eradicate lesions. All of this makes your job easier and reduces the amount of time you have to spend on a patient. Less time in the chair also makes for more satisfied patients. Other patient benefits include less sutures, less reliance on anesthesia, reducing infections, less damage to gums for faster healing times, and less blood loss.
You don’t need to be told that consolidation of practices has been on the rise. However, the impending death of the individual practice has been greatly overstated. Group practices can be good for reducing costs but what makes you a good doctor may be lost in a more rigid corporate model.
That said, if you like the treatment side but hate the business end, you may want to consider selling your dental practice to a group practice. You can have a regular paycheck and lose the headache of running a business.
If you have an entrepreneurial spirit, however, you probably will still be best suited by buying a dental practice that you run on your own.
Automated Patient Tracking and Management Software
Chances are you’ve already experienced this—getting appointment confirmation notices by text, pre-recorded follow-up calls, online portals for patients to schedule appointments and send and receive messages with your office, and using handheld tablets to complete forms. These things reduce the workload on your staff and, thereby, save you money. It also allows patients to manage their appointments and treatment on their own schedule, which is appreciated in an increasingly busy world.
ddsmatch Southwest Can Help You Know What is Best for Your Dental Practice
Here at ddsmatch Southwest, we are dental practice transition specialists and our nationwide organization has experience with hundreds of successful transitions from around the country. For ten years we have been advising doctors on how to best prepare for transition. If you are considering selling a dental practice in the next five years, we offer a free, no-obligation Practice Transition Assessment, part of which is helping identify areas of investment that will add value to your practice. Contact us today to find out how we can help you—it starts with a conversation.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2019/10/2-selling-a-dental-practice-buying-a-dental-practice.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2019-09-13 23:26:452019-10-21 23:31:18Hot Trends in Dentistry for Anyone Buying or Selling a Dental Practice
This is the second in our series of articles about how to best be prepared to purchase a dental practice for sale in Texas or New Mexico. In this article, we’ll go through the major steps of a dental practice transition. While the process can seem overwhelming, once you’ve reviewed these steps, you may find it’s not as difficult as you think, especially once you’ve enlisted a team of trusted advisors.
Before we get into the details, however, we’ll briefly address the question of why to buy a dental practice for sale in Texas or New Mexico as opposed to starting a new practice. The main answer is because of the existing patient base. A successful practice that is up and running has a steady stream of patients, which means you have cash flow from day one. If you start a practice, you have to build it yourself. And if you start a practice in an area where there is already a dental practice on the market, someone else is going to buy it and you will be competing with them and their built in patient base. Depending on your career goals, you might not want to have to deal with the headaches of building a practice from the ground up, especially if you are a new doctor without an established reputation.
Step One: Put Together a Team of Trusted Advisors
As a doctor, you no doubt are a smart and capable person with a strong skill set. That said, no one person has all of the knowledge and experience to manage every detail of a dental practice transition. You need professional advisors who can help you make what is likely the most important (and complicated) decision in your career. You will need the following specialists:
Dental Attorney: you will need an attorney with experience in dental practice transitions. There are issues, and potential liabilities, that are unique to dental practices, so do not assume that a general practice or general business attorney will have the expertise. If they have to get up to speed, it will slow down the process, cost you more money, and you still won’t be certain that they aren’t overlooking important details. Find an attorney, with solid recommendations, that has counseled other doctors in the sale of dental practices.
Dental CPA: as with the dental attorney, you need an accountant who understands the specifics of dental practice finances. You will need to rely on this accountant to understand the financial records they are reviewing in advance of making an offer and closing the deal. You need to know that they won’t misunderstand any details that may not be apparent to an accountant without dental practice experience.
Dental Practice Transition Specialist: a practice transition specialist can be extremely useful for consulting on matters such as employee management and patient retention.
Dental Banker: dental practices are somewhat unique among business from a banking point of view. They require a lot of capital but are also very good investments for banks. A banker without experience with this type of business may not offer as favorable terms, failing to understand the particulars of dental practice valuations, where “goodwill” accounts for the bulk of the value.
Step Two: Make an Offer with a Letter of Intent
This is your formal offer to buy a dental practice for sale. Before you make the offer, you should have reviewed the practice’s financial disclosures with your advisors and be comfortable with what is being offered. A letter of intent is non-binding, but it is a strong signal to the seller that you are serious about this deal. The letter should specify:
The assets to be included in the sale
The assets to be excluded from the sale
The price offered for the practice
The closing date for the sale
Any item not addressed in the letter of intent should be negotiated and reduced to a written agreement before the closing date.
Step Three: Apply for a Practice Purchase Loan
Ask your dental CPA or dental practice transition specialists for recommendations to banks with professional practice lenders that have dental practice experience. You should submit applications to multiple banks so you can choose the terms that will be most favorable for your deal. The earlier you get started on this process, the better, so there is no holdup on your end in closing the deal.
Step Four: Insurance Policies
What insurance you will need will depend in part on the other parties. If you have a landlord, they may have business liability insurance requirements you have to meet. The seller may have their own requirements, as will the bank. Generally, when you buy a dental practice for sale in Texas or New Mexico, you will likely need:
General business liability insurance
Personal property insurance
The application processes for these may take some time, so, again, the earlier you get started, the better. Your team of advisors can also help you know what you should be looking at and may recommend some insurance companies to go to for coverage.
Step Five: Establish a Business Organization
If you haven’t already, you will need to set up a company. What kind of company you organize will vary from state to state, as local laws will govern what kinds of business organizations can operate what kinds of businesses. You’ll also want to consider how you will be personally liable for taxes or liability in lawsuits with each organization. Discuss your options with your attorney and CPA and pick the type of organization best suited for your situation. These are typically pretty easy to set up yourself and it can often be done online through the state government website.
Step Six: Have Your Dental Attorney Review the Practice Purchase Agreement
This is the document that details the terms of the purchase. If a detail is not in this document, it is not a part of the deal and, therefore, not enforceable. Review this document closely and have your dental attorney explain its provisions, making sure you understand each part. This document should address:
The seller and buyer’s respective representations and warranties
The assets that are included in, or excluded from, the sale
Who will control the patient records
The scope of the non-compete covenant (time and geographic distance)
The collecting of the seller’s accounts receivable and patient credits
Procedure for handling any repair of defective dentistry
Allocation of the purchase price for tax purposes
Ongoing contractual obligations or liabilities
The firing and hiring of staff
The transition letter notifying patients that the practice has been sold
Step Seven: Office Space
If you are buying an existing practice, the selling dentist is either leasing the office space or owns it. You will be either taking over the lease, buying the space, or leasing it from the seller. In any of these circumstances, these are details that need to be worked out with your dental attorney and are separate from the practice purchase agreement. It is important to understand that the purchase of the practice does not include any rights to the office space. That needs to be negotiated on its own.
Whether you want to lease or buy the office space will depend on the practice, the location, and your goals for the practice. Discuss these matters with your attorney, CPA, and practice transition specialist. They can each help you understand that benefits and drawbacks of your options.
Step Eight: Sign the Documents and Take Ownership
Once all of the details are solidified and you are in agreement with the terms of the deal with the buyer, you sign the documents and submit them to your lender. Once the bank has the signed documents, they can finalize the lending process and transfer funds to the seller. When that happens, you can take ownership of the practice.
It’s not uncommon for the sale to remain confidential to this point. Therefore, after this point, you can have a meeting with the dental office staff and start the process of taking over the practice.
Step Nine: Send a Transition Letter to Patients
As mentioned above, a major advantage of buying a dental practice for sale is having a built-in patient base. Once the sale has closed, that is the time to let patients know that the dental practice will have a new doctor. This is the opportunity for the selling doctor—who has the trust and confidence of the patients—to endorse you as the new doctor. This letter can be drafted and agreed to before the deal closes, which may be a good idea so there is no conflict when it comes time to send the letter. Your dental practice transition specialists can provide guidance and advise as to how to compose the letter and its contents.
Step Ten: Staffing, Billing, and Licenses
Once the deal is closed, all of the things owned and controlled by the seller’s company have to be transferred to yours. This means the seller will terminate his employees and you will hire them to your company. Utilities and other service contracts will have to be assigned and decisions made about pro rata payments, if necessary. You will need to make sure that you are in compliance with all local, state, and federal licensing and registration requirements. Again, your dental attorney and practice transition specialist can help you identify these details.
ddsmatch Has Dental Practices for Sale in Texas and New Mexico
If you are looking to buy a dental practice for sale in Texas or New Mexico, ddsmatch Southwest has several appealing options. Check out our available matches online. If you are considering transitioning your practice in the next five years, contact us today for a free, no-obligation Practice Transition Assessment and find out what we can do for you.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2019/10/1-dental-practice-for-sale-Texas-dental-practice-for-sale-New-Mexico.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2019-09-06 23:18:592019-10-21 23:23:14Ten Steps to Buying a Dental Practice for Sale in Texas or New Mexico
At ddsmatch Southwest, we are dental practice transition specialists who focus on matching the right buyer for doctors who have placed a dental practice for sale in Texas or New Mexico. We believe that the right match is important because a successful practice transition is one where the practice continues to thrive, protecting the legacy of the selling doctor and providing the buying doctor with a solid foundation on which to build their own legacy. Because of this, we believe it is important for the buyers in the practice transitions we facilitate to be well prepared and well informed, with everything they need to have confidence in both the practice they are buying and the fairness of the transaction.
To this end, we will be posting a short series of articles about how to best be prepared to purchase a dental practice for sale in Texas or New Mexico. In this article, we will provide a brief overview of the first steps of the dental practice transition process, from the buyers point of view, and some general principles to keep in mind.
Assemble a Team of Advisors
After you have decided the time is right for you to buy a dental practice, and have an idea of where you would like that practice to be, you should identify and retain a small group of trusted advisors to counsel you through the process. This should include, at least, a dental CPA, a dental attorney, and a banker with experience lending for dental practice purchases. You may also want your own dental practice broker.
You may wonder why you can’t use your family member who is a respected attorney or a friend who is a CPA. While these types of contacts may be great for general purposes, you need advisors who understand the particulars of dental practices and the accounting and legal issues that are unique to your industry. You don’t want something important overlooked because your CPA didn’t recognize its significance. And you don’t want to pay an attorney’s hourly rate while they get themselves up to speed on an issue. You’ll save money and time by retaining specialists with experience.
Before you get anything but the most cursory information about a dental practice for sale, you will be required to sign a non-disclosure agreement. This agreement will protect your personal and financial information, as well as the selling doctor’s, and will protect the dental practice from staff and patient concerns if knowledge of a transition is leaked too soon. It’s a good idea to have your own dental broker or attorney to help you review and understand the agreement.
Have a Realistic Idea of What You Can Afford (and Need the Practice to Earn)
In 2018, the average dental student graduated with over $285,000 of student loan debt. When you are buying a dental practice, you have to consider both what you can afford to buy and what you are going to need to earn to cover the practice’s expenses, pay off the practice loan, keep paying on your student loans, and still have enough for your personal expenses and savings.
Depending on the practice, you may need some operating capital to keep things going in the early days after the transition. You may also need to compensate the selling dentist if you both agree it will be mutually advantageous to keep the doctor on for a period. A dental CPA and a dental practice broker can help you better understand how to look at a dental practice for sale and see its potential—or its problems. A banker with dental practice experience can also discuss with you how much you might expect to be lent for the practices you are considering.
Know the Value of the Existing Dental Practice Staff
When you are buying a dental practice, you are also getting the existing employees: hygienists, billing staff, receptions, etc. Although you will be the doctor, they are the ones that really know the patients and how the practice runs. Their institutional knowledge will be invaluable to you, both during and after the transition, to keep the operation running smoothly and help the patients feel comfortable with you, the new doctor. It is imperative to show them respect to help the transition be as smooth as possible. It’s a big change for them as well!
See It for Yourself
Every dental practice is different. You won’t really know what the practice is like until you can experience it in person. You also will want to look closely at details indicating the health of the practice: how many patients have visited the office over the past 18 months, whether the practice is appropriately staffed, patient flow, and cash flow. Those last two items, in particular, can show you whether a practice is growing, stable or shrinking. If the practice is underperforming, there may be some untapped opportunities for growth.
Look Closely at the Practice’s Financials
The asking price may not reflect the actual value. Many people tend to overvalue their assets because of their emotional attachment to them. Dentists are no different. The price of a dental dental practice for sale in Texas or New Mexico should be a reflection of its value based on sound accounting and valuation methods, not a reflection of what a doctor has put into the practice. Have your team of trusted advisors review the financial information with you to help you understand what it really says about the practice and whether its in line with what a business of its type should be doing.
Understand What Is and Isn’t Part of the Deal
If a selling doctor is asking $750,000 for a practice, you need to understand what you get for that amount. That may not include the equipment. It probably won’t include the accounts receivable. If the doctor owns the building, and you want the building as part of the deal, that can be a separate transaction and will definitely be a cost in addition to the practice sale price. If you have to purchase a lease, that will also have to be negotiated.
The selling price is a good place to start, though. If you and the selling doctor can reach an agreement on the sale price, usually negotiations on the other aspects will be smoother as both parties are motivated to complete the deal.
Be Wary of Owner Financing
Simply stated, a bank is more objective. Banks certainly have an interest in the money they lend—they want it back with a return on that investment. But this means they will perform a thorough due diligence relying on independently verifiable information. In a seller-financed deal, the seller is less likely to have a third-party valuation of the practice and asking price. They are likely looking to finance their retirement out of the sale and want to capture the interest as well as the principle. This can result in them trying to get a certain number rather than the true value of the practice.
Consider the Value of the Seller Staying On After the Transition
It is common for the selling doctor to remain working in the practice for a period after the transition. This can be useful for helping to ease the transition for the patients, the staff, and the new doctor. It can be an attractive option for a doctor who is not ready to fully retire but wants to be rid of the business responsibilities and just focus on patient care, perhaps with reduced hours, before fully stepping away. Occasionally, however, it can indicate a seller who wants to have their cake and eat it too: sell the practice but not really have to give it up. Discuss this with your advisors. But be wary of a doctor who is proposing a period in terms of years, rather than weeks or a few months.
We Have Available Dental Practices for Sale in Texas and New Mexico
As stated, as ddsmatch Southwest, we focus on finding the right buyer for dental practices we have available for sale in Texas and New Mexico. If you are ready to make your move into practice ownership, check out our listings. If you see any your are interested in, or have any questions, please contact us— it starts with a conversation.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2019/08/4-dental-practice-for-sale-Texas-dental-practice-for-sale-New-Mexico.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2019-08-15 23:11:022019-08-15 23:11:04Prepare to Buy a Dental Practice for Sale: First Steps
When selling a dental practice, there are a lot of things to consider and details to manage. Among those are how to value your practice. However, one thing that is generally not factored into the selling price is the accounts receivables. Accounts receivable are the amounts owed by patients who have been provided service but either they or their insurance (or some combination of the two) have not yet remitted payment. Accounts receivable are generally handled as a separate item as a transitioning dentist may or may not want to make them part of the deal.
Similarly, when buying a dental practice, the buyer might not want to buy the accounts receivable because they can impose an unwanted administrative burden and cost. Typically, however, it may be to the advantage of a buyer to try and get them. They are usually sold at a discounted rate (for reasons explained below) and can provide a source of operating capital from day one as opposed to borrowing additional funds from a bank.
In this article we’ll discuss the three basic options you have when and the advantages and drawbacks of each. Whether you ultimately decide to sell or not sell your accounts receivable will depend largely on the particulars of your practice and, importantly, the counsel of your financial adviser and dental practice transition specialist.
Sell the Accounts Receivable
If you include the accounts receivable when selling a dental practice, you are doing two things. First, you are releasing any claim you have on payment for work you did prior to the sale. It now belongs to the buyer. Second, you are also getting rid of the responsibility of trying to collect those outstanding payments. Under this scenario, you get to walk away with no further responsibility with regard to the accounts (except having to possibly endorse some checks over to the buyer).
As mentioned, this can be advantageous for the buyer who can use the funds as operating capital. If your buyer has reached the limit of their borrowing capacity, this can be a good way for them to make sure they have funds to keep the practice operating in those early days after the dental practice transition. If they need the accounts receivable for this reason, it may also be to your advantage to sell them, to ensure that the sale closes.
And while you will receive some compensation for the sale of the accounts, it will not reflect their full face value. This is for two reasons. First, simply stated, an agreement by a patient or insurance company to pay for your services is not the same as cash in hand. There will always be risk involved in collecting payment and this risk is reflected in the discounted rate. If you use dental accounting software, you probably know that it groups your accounts receivable into different categories, 0-30 days outstanding, 31-days days, 61-90 days, and so on. The longer the account is outstanding, the less likely you are to collect, and the more expensive it will be to do so. So a buyer may offer 85% for accounts that are due in 30 days or less, 75% for 31-60 days, 50% for 61-90 days, and so on.
The second reason, acknowledged above, is that there are costs involved with collections, costs which increase with each billing cycle. This will be discussed in more detail below.
Don’t Sell the Accounts Receivable and Have the Buyer Collect Them
If, when selling a dental practice, you and the buyer choose to not make accounts receivable part of the overall deal, you still have to have someone collect on those accounts. Basically, this can be either you or the buyer. Administratively, this is a more complicated option, but it means you get to keep the payment for the work you actually did.
Two things have to be considered. One, how the buyer will keep your accounts separate, making sure you get the funds that belong to you. The administrative staff will have to keep track of your accounts and the new doctor’s accounts separately. This will become increasingly complex for patients with ongoing treatment that you started and that the buyer is completing.
Second, when buying a dental practice, the buyer may not relish the idea of running a collection and accounting office for a retired doctor. The new doctor will be incurring the costs of collections and will rightly expect you to compensate the practice for this work out of the money being collected. Some of the expenses (in terms of either employee time or actual money spent) may include: electronic statements or paper statements, electronic claims (or in rare cases manual insurance claims), postage, labor, phone calls, secondary insurance submission, and communication time with patients or account holders. These costs can take between 5-12% of the revenue being collected, with an additional 5% convenience fee (that is, you are paying for your convenience and the practice’s inconvenience), and an uncollectable debt percentage of 3%. Therefore, you could reasonably expect about 83-85% of the money that is actually collected.
Whether this is more advantageous than simply selling the accounts receivable along with the dental practice will depend on how much you have outstanding, how long its been outstanding, and who is obligated to pay (insurance companies likely being more reliable than individual patients).
Keep the Accounts Receivable and the Responsibility for Collecting
Under this option, your only costs are your own and you get to keep everything that ultimately gets paid out, less whatever administrative costs you incur. This option is really only best in circumstances where you have a minimal amount of accounts receivable and from sources that are likely to pay.
Resources are also a factor. You may be able to do it all yourself. You may also be better off just paying your (former) administrative staff to work on the project on their own time. It is also most easily done in circumstances where the person selling a dental practice is staying on in the practice for a period of time after the dental practice transition.
Get Expert Advice on Selling a Dental Practice
A big takeaway you should get from this article is that there are a lot of factors particular to your dental practice that will determine whether selling the accounts receivable is the smart move. For help in navigating this decision, you should rely on expert advisors with experience in dental practice transitions who can help you identify and weigh your options.
Here are ddsmatch Southwest, we are dental practice transition specialists with experience in hundreds of successful practice transitions from across the country. We find out what your goals are for your transition and bring that experience to bear to help you meet those goals. If you are considering transitioning your practice in the next five years, we offer a free, no-obligation Practice Transition Assessment, including advice on how best to prepare your practice. It all starts with a conversation. Give us a call today and find out what we can do to help you.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2019/08/3-buying-a-dental-practice-selling-a-dental-practice_HERO.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2019-08-08 23:05:452019-08-15 23:08:43Should I Sell My Accounts Receivable when Selling a Dental Practice?
Typically, the plan for a recent dental school graduate is to practice in a suburban area around an urban city. A dental practice in a rural area is seen as less appealing. However, what young doctors are finding out is that these areas are already at or over capacity for dental practices and doctors. This means more competition for jobs and patients, lower salaries, and limited opportunity for growth. More often, practices are resorting to extended and weekend hours to try and capture more patients. Costs of living are higher. Participating in PPO plans may be necessary if the competition is doing it (especially when considering student loan debt, practice loan debt, and overhead and personal expenses). So while the urban area may appear to offer more in terms of lifestyle, dentists practicing in these areas may not be able to enjoy those supposed benefits as they imagined they would.
Below we discuss some of the advantages of dental practices in rural areas. But don’t just take our word for it, read what a recent satisfied ddsmatch Southwest client has to say about his career in a Texas small town.
Dental Practice in Rural Areas Provide More Economic Opportunities
While high-density areas leave dentists scrambling for jobs and patients, and established dentists may have deferred retirement due to economic conditions, dentists in small towns are experiencing the opposite. Most small town dentists are doing quite well because they don’t have the same kind of competition. In fact, many rural areas are underserved, making patient demand for dental services high in comparison to urban areas.
Dr. Bill Dean, recently used ddsmatch Southwest’s dental practice transition specialists to help him sell his practice. In a recent interview about his practice transition, he noted this benefit of small town dentistry,
“We’re a town of about 3,500 people, but we’re about 50 miles from Lubbock. It’s the nearest town, large town. And, I have a drawing area of probably 20,000 patients and coming from three or four different counties that don’t have dentists, and it’s hard for young dentists coming up to realize that they can come to a real community and have an instant practice when they start out.”
“Particularly if they’re buying a practice. There’s a ready-made client base that they can go to work from day one and be busy. They don’t have to try to develop a clientele, and they get to know their patients and the patients . . . Once they’ve won a patient over they will tell all their friends, and it just is an ongoing process of good people.”
Small Town Overhead with Urban-Level Fees
Fees charged by dental practices in rural areas are comparable to those charged in suburban and urban areas. But the overhead is much lower. A small town practice typically has its overhead expenses in the 50-55% range. Two major factors are lower wages and lower real estate or lease costs. Combined with less competition (meaning you save in your marketing costs as well), this means higher profits for your practice, and more money in your pocket. The faster you can accumulate wealth, the sooner you can retire, and the easier it will be to do on your own terms.
Dr. Dean also addresses the belief that being in a small town might make you feel isolated. To the contrary, given the realities of transit in sprawling urban areas, his access to larger city amenities wasn’t an issue, and the increased opportunities to earn and own a practice are accelerated by the built-in clientele and lower overhead:
“Lubbock is a town of about 200-and-something-thousand people, Texas Tech University is there, and they’ve got everything you could want. It’s 45 minutes away. If you’re living in Houston you may drive an hour to go eat somewhere and if you’re living in Floydada, you could be anywhere in Lubbock within an hour, and you’ve got anything you want. You got a major airport that’ll get you where you want to go, and, as I said, you’ve got an instant practice the day you open up your doors and in a large city you have to work to get people to come in. Or, go in as an associate and work for five years before you can actually become a partner.”
Student Loan Forgiveness Programs
Because many rural areas are underserved, some state agencies have established loan forgiveness programs based on the number of years a doctor practices in one of the underserved areas. So, in addition to earning more, you can also work to reduce your debt faster than otherwise, accelerating your savings. Some of the programs may require participating in Medicaid. Visit ADA.org for more information.
Small Town Life Style
Many dentists who do practice in more densely populated areas grow tired of the tough economics of urban life, the competition, and the stress. These are factors that are intrinsic to city life. We’ve discussed above how a dental practice in rural areas can increase your income. It can also greatly decrease your stress while increasing job satisfaction.
The slower pace of life allows to you both be more flexible in your schedule and to get to know your patients better. Creating a personal bond who those to whom you provide care adds an additional dynamic to your work day that can make it more enjoyable, and less of a chore. You also will have more time to enjoy the things that make life worth living, like friends and family, and hobbies and recreation. The ability for better life balance will reduce the likelihood of burnout.
Additionally, you can enjoy the esteem of your community. A dentist is a valued member of the community, providing a valuable service. You can be seen as a respected professional whose advice is valued. Diagnosis and treatment plans are more readily accepted by patients who know and trust you.
Dr. Dean confirms these benefits. Speaking of the doctor who bought his practice, Dr. Dean noted that he was looking specifically for
“[s]omeone that would be a part of the community, that was more than just drilling and filling and seeing patients. And, [Dr. Shively, the buyer, has] been with a corporate firm in Lubbock for the last six months and it wasn’t a matter of getting to know the patients, it was a matter of production, and Dr. Shively didn’t like that, didn’t want that. He wanted to be a part of the community. . . .
“He said when he came out there was little league baseball playing, and he said that’s what he’s looking for, and, you know, that’s what I’ve had for the last 27 years. We’ve known for two months . . . that Dr. Shively was taking over, and that I would be leaving. And, the last two months with patients have the most humbling and rewarding of my entire career. The patients just saying, ‘we appreciate you and love you,’ and that’s what dentistry’s all about. It’s getting to know people. . . .
“Probably half of my patients call me Dr. D., the other half call me Bill, because I go to church with them, or I’m on the school board. I’m just one of them. Particularly for these that, like the Davidsons, where I see their kids and grandkids and great grandkids, they’re really more family than they are patients. And that’s the beauty of working in a small town. When you leave the office you may see them at the grocery store, you’re going to see them at the football game, or the basketball game.”
ddsmatch Southwest Has Rural Practices Available Now
The dental practice transition specialists at ddsmatch Southwest have dental practices in rural areas in Texas and New Mexico ready for buyers. If you are looking to start your career, or are looking for a change of pace where you can own your own practice and enjoy the benefits of that ownership, take a look at our available practices.
If you are considering transitioning your practice in the next five years, we offer a free, no-obligation Practice Transition Assessment during which we’ll our experience to work for you, advising on how best to build value and get ready to transition on your terms. Contact us today.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2019/04/1-dental-practice-appraisals_HERO.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2019-08-01 23:02:182019-08-15 23:05:12Dental Practice in Rural Areas: Better for You and Your Bottom Line
Increasingly, dentists have been asking us, “How do I find a dental associate? Where do I find an associate? How do I pick the right candidate?” ddsmatch listened and we have the answer. We’re pleased to announce that we’ve partnered with ZipRecruiter to leverage their proven employment solutions to expand your options, along with the continued support of our team of professionals, and the thousands of dental associateship candidates on our website.
What is ZipRecruiter and How Will it Help You?
ZipRecruiter is an online job board that allows employers to post jobs to hundreds of job boards, including to ZipRecruiter’s own job board. ZipRecruiter has the #1 rated job search app on iOS & Android. Also, in 2019, ZipRecruiter was named one of the world’s most innovative companies by Fast Company. Simply stated, ZipRecruiter is one of the smartest ways to hire. It sends employment notices to hundreds of job boards with a single submission, reaching over seven million job seekers. More than 1,000,000 companies have already used Zip Recruiter to meet their employment needs.
Among the features that sets ZipRecruiter apart are:
Powerful Technology: With one click, ZipRecruiter send your job to hundreds of job sites across the web, identify the best candidates, and notify them to apply.
Pre-Screen Interview Questions: Add pre-screen interview questions to save time and ensure you only see the most qualified candidates.
Reusable Job Slots: All plans include reusable job slots, so when you’re ready to post another job, simply close the position and reuse that same slot.
Social Network Posting: Send your job to Facebook and Twitter, then manage, screen, and rate candidates on your Candidate Dashboard.
Mobile Friendly Interface: ZipRecruiter is designed for mobile so you can post a job, review candidates, and more while you’re on the go.
Premium Customer Support: You can call them, email, or chat live with a real customer service professional who will be happy to help you get the most out of their platform.
How Do You Get Started Finding Your Dental Associate?
Getting started is as simple as 1-2-3.
Contact your ddsmatch professional
We complete your custom online profile
We facilitate the process
If you are in a dentist in Texas or New Mexico, contact ddsmatch Southwest for a no-obligation consultation. The cost for ZipRecruiter’s services will be determined based on your specific job posting and placement needs.
Why You Should Consider a Dental Associateship for Your Practice
A dental associate can be a highly effective way to increase production in your practice. If you have reached the maximum of what you can do on your own, find you are having to set appointments for more than three to four weeks out, and are consistently adding around 30 to 40 new patients a month, your practice may be ready for an associate.
When it’s done right, adding another doctor can be a good investment in the future of your practice. You can improve patient care, increase the services you offer, and possibly begin the dental practice transition process, if the circumstances are right.
How to Know if Your Practice is Ready for a Dental Associate
Bringing on another doctor requires a lot of thought, planning, and due diligence. Bringing on an associate may increase expenses and decrease profits in ways you might not predict. If you do it too soon, you might struggle to reach the point where the associate’s production is covering their expense, which can be bad for your practice.
One rule of thumb is to look at your production numbers. If your total production is consistent at $140,000 per month (breaking down roughly to $90,000 from you, the doctor, and $50,000 from your hygienists), you are probably ready to add another doctor. Another way to look at it is by treatment room, where you want to be at a production level of about $25,000 to $30,000 per room, doctor and hygienists combined. If you are interested in adding a dental associate but aren’t quite meeting those production levels, take a look at your practice to determine what changes can be made to get you there.
Also consider your referral and case acceptance rates. A good rate for adding another doctor is around 40 to 50%. Your case acceptance rate should be at about 80%. If you are not meeting these kinds of numbers, you may have internal issues in your practice that need to be looked at before you can get those numbers up. Those issues should be resolved before you start looking to add another doctor or you can end up harming your practice.
ddsmatch Can Help You Find the Right Match for Your Practice
ddsmatch is proud to serve dentists all over the country. Our dental practice transition specialists average over 20 years of dental industry experience and have served dentists through every stage of their careers. We bring that knowledge base and depth of experience to bear for you, to help you get what you want out of your practice transition. Also, we pair our dental relationships with our searchable database to create the perfect match for dentists across the U.S.
ddsmatch has been successfully connecting the dentist’s present with their future for ten years. At ddsmatch Southwest, we focus on dental practices in Texas and New Mexico. If you are interested in adding a dental associate, or are considering transitioning your practice, contact us today for a free consultation.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2019/08/1-dental-associate-dental-associateship_HERO.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2019-07-19 22:56:372019-08-15 23:01:44ddsmatch Has Partnered with ZipRecruiter to Find and Place Dental Associates
Our two most recentclient testimonial interviews are with doctors at very different stages in their career, who sold their practices but either aren’t retiring or will continue to see patients under limited circumstances. If the idea of selling a dental practice is appealing to you but you don’t know that you are ready to retire or stop doing clinical work, a dental service organization (DSO) can be a good fit.
Some Pros and Cons of DSOs
For instance, if you are nearing retirement—just not quite there yet—the thought of being free of the business and administrative side of a dental practice can sound very appealing. If this sounds familiar, but you don’t think retirement is the next step, you probably are still interested in clinical work, just not everything that comes from running a small business. A DSO can be a good option because their goal is not to replace doctors but to take over the business and administrative side. Because of their size, they have economies of scale, which means that setting up their practice models around your clinical work can be mutually beneficial. They see the profits to be had from your practice and you don’t have to worry about the business side.
Even if you aren’t near retirement but have found that running a business is not something you are cut out for, a DSO can still be a good choice. You’ll make a good living doing what you do best—practicing dentistry—in the practice you’ve built, but without the headaches and extra hours needed to take care of the business side. Because of those economies of scale, DSOs can, under the right circumstances, do better than individual dentists with collections, strategic marketing, and reducing supply costs, all of which can increase the practice’s profitability. You may also have the option to transfer to other practices within the DSO’s network.
On the other hand, not all DSOs are created equal. Some have gotten in trouble with industry oversight organizations and regulators. Some have pressured dentists to work more than they agreed to. And if the DSO is not well managed, the lower costs won’t be realized.
Also, after years of being your own boss, you have to seriously consider how well you would do as an employee. You may lose flexibility in your scheduling or be compelled to comply with policies and procedures that you might not think are right. Before you sell a dental practice to a DSO, you need to be sure it’ll be a good fit for you and your practice.
Finally, you also have to consider your legacy and what it means to you. With any buyer, you are giving up control over your practice and how it functions in the future. But with a dental practice transition specialists, like those at ddsmatch Southwest, you can put the effort into finding the right buyer who will be the best fit for your practice, your staff, and your patients.
With a DSO, you are getting more of a one-size-fits-all approach to running a practice. The changes may have a negative impact on your reputation if they result in a lower quality of patient care, especially if you continue to work in the practice. That said, DSOs also can provide a number of features patients like, such as flexible financing, or expanded services and hours.
What to Look For in a DSO
When you are selling a dental practice, whether to a DSO or private buyer, you need to look closely at who you are selling to. This is much more important when you are going to continue to work in the practice. You need to decide what is important to you about your practice and how to preserve that. The answer to that question will be quite personal.
There are some practical things to consider and you’d be well advised to look and them closely as well. At ddsmatch Southwest, we always recommend that you retain a dental practice transition specialist, and that you have an attorney and accountant with dental practice-specific experience to review your documents and advise you on your decisions.
Remember that no matter how well you get along with the buyer and their representatives, no agreement that is not in writing is unenforceable. Be sure that everything you need to have as part of the deal is recorded in the deal papers. Not only does this protect you, your patients, and your staff, it also makes sure everyone is on the same page about how you are moving forward.
Some things you should consider include:
Terms of payment. Will you be paid for the practice up front? Or will you be paid when you separate from employment? What is the impact of your current liabilities on the payment? What accounting methods are they using to calculate the sale price or commissions? Be sure that you are clear on these details to avoid unpleasant surprises and to be able to double check anything that seems off.
Employment status. Its typical for a DSO to require the seller to stay on for a minimum of two years after the sale. You should have an employment contract that explicitly lays out how you will be paid your salary, whether commissions are based on your personal production level or the practice’s overall profit, whether those calculations are based on net or gross revenue, what the exit strategy is, and whether you will have any say in your replacement.
Practice model. You won’t really have much room for negotiation here, if any. The practice model is what drives the DSO’s profitability, so they aren’t going to want to tinker with it to accommodate your preferences. You just need to make sure its a model you can work within. Do they use reliable vendors? Will budget restrictions interfere with your ability to provide quality care? How much freedom to you have to make clinical decisions and discuss the available treatment options with patients?
Support services. This refers to the business and administrative side. This is what the DSO is supposed to be good at but you need to make sure it’s going to be a help to you and your staff, not a hindrance. Speaking of staff, be sure to be upfront with them about the changes that are coming and make sure the DSO is hands on during the whole transition process. Good support services will make it much easier to run and grow your practice.
Capital resources. Because of the nature of the business, dental practices can experience significant fluctuations in cash flow since many services are not being paid for as they are provided. A well-capitalized DSO can alleviate the pressures from fluctuating cash flow. They can also advise on streamlining operations and other ways to increase profits.
How helpful and flexible will the changes be? Be sure to have as comprehensive of an understanding of the changes that are coming and when to expect them. Have regular meetings (at least monthly) with your DSO support team to review performance and address any issues that arise related to the transition. You DSO support team should be helpful and flexible, not a thorn in the side of you and your staff.
Exit Strategy. If you have an idea of when you want to leave the practice, let that be known up front. Be clear on the process and, if you want, ask to be guaranteed that you will have a say in your replacement.
As with any time someone is selling a dental practice, you should take your time and research your options. Talk to other doctors who have sold to the DSOs you are considering and find out their experiences. A good DSO is one that gives you peace of mind that the practice is growing and well run while allowing you to focus on dentistry.
Considering Selling a Dental Practice to a DSO? We Can Help!
At ddsmatch Southwest, your dental practice transition goals are our goals. An essential part of our process is working with you to learn and define those goals so we can use our expertise to best help you. We bring the experience of hundreds of successful dental practice transitions from all over the country and put it to work for you, to get you the best match for you and your practice. Contact us today and find out what we can do for you.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2019/07/4-selling-a-dental-practice_HERO.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2019-07-09 17:48:072019-07-09 17:48:09What to Consider When Selling a Dental Practice to a DSO
We sat down with Dr. Bill Dean, of Floydada. Texas, to discuss his dental practice transition, facilitated by ddsmatch Southwest. He had recently seen his last patients, who were, coincidentally, among his very first patients—they are part of a family, four generations of which, have been his patients. Dr. Dean makes the case for practicing dentistry in rural areas and for using the ddsmatch dental practice transition specialists.
“ . . . they did everything that I needed help done. They supplied all the paperwork, all the forms. They did all of the listing and advertising, and all I had to do was be there to open the door when they brought someone out.”
When you first put your dental practice for sale, what did you have in mind for the type of person you were hoping for in a buyer?
Someone that would be a part of the community, that was more than just drilling and filling and seeing patients. And, [Dr. Shively, the buyer, has] been with a corporate firm in Lubbock for the last six months and it wasn’t a matter of getting to know the patients, it was a matter of production, and Dr. Shively didn’t like that, didn’t want that. He wanted to be a part of the community.
He said when he came out there was little league baseball playing, and he said that’s what he’s looking for, and, you know, that’s what I’ve had for the last 27 years. We’ve known for two months . . . that Dr. Shively was taking over, and that I would be leaving. And, the last two months with patients have the most humbling and rewarding of my entire career. The patients just saying, “we appreciate you and love you,” and that’s what dentistry’s all about. It’s getting to know people.
When he came out with Andy it was an instant bond with both of us, and we knew that this is what we were going to do.
It seems like it’s the kind of community that allows people to get to know each other as people, not just as part of commercial transactions.
Exactly. We’re a town of about 3,500 people, but we’re about 50 miles from Lubbock. It’s the nearest town, large town. And, I have a drawing area of probably 20,000 patients and coming from three or four different counties that don’t have dentists, and it’s hard for young dentists coming up to realize that they can come to a real community and have an instant practice when they start out.
Do you feel that younger dentists coming out might not recognize the benefits of a rural community?
Particularly if they’re buying a practice. There’s a ready-made client base that they can go to work from day one and be busy. They don’t have to try to develop a clientele, and they get to know their patients and the patients . . . Once they’ve won a patient over they will tell all their friends, and it just is an ongoing process of good people.
You mentioned that the local newspaper ran a story about you putting your dental practice for sale?
The local newspaper came out probably three months ago now, and interviewed Dr. Shively and me, and ran an article in the paper, front page, half a page story about him coming in and wanting to be a part of the community. And, he’s been out a couple of times, shadowing me and then he came out one day when I wasn’t there and saw patients and then Wednesday will be his first day to see patients, and he’s got a full schedule for the rest of the week.
What is happening with your staff?
My staff will stay. My hygienist has been with me 16 or 17 years, Gracie, who’s the office manager’s been with me 13 and then [Kiera] is a new one, but they are all staying. And, they’re the ones that are going to make the transition for him. They’ve been building him up since the very beginning.
Was your staff involved in considering buyers or were they not really involved in that process?
They weren’t really involved, but some of the first ones that came out, they came out after hours, and it was obvious that they weren’t going to work, and so we didn’t do that. When I met with Dr. Shively, we brought him back out to shadow me, and I told them that he was coming and was probably going to be the one. And, there was a little apprehension until they met him, and then they were quite satisfied.
Let’s talk a little bit about the process with ddsmatch. If somebody came up and just said, “hey, you used a broker, why would you do that?” What would your thoughts be?
I’ve got a colleague in Plainview, that’s about 30 miles from Floydada, that’s tried to sell his practice, I think three times, and it’s all fallen through because he didn’t have the right, I don’t know, idea of how he needed to do it, what he needed to do, and with the ddsmatch they did everything that I needed help done. They supplied all the paperwork, all the forms. They did all of the listing and advertising, and all I had to do was be there to open the door when they brought someone out.
Did they help you out with getting your practice appraised?
They did . . . I supplied, I think it was bank statements and production figures for, I believe, three years. I don’t know now, but they went through and evaluated everything, and they came up with the figure of what they thought the practice was worth, and it was pretty much what I had estimated in my mind that it was going to be and took over from there.
How did that process work?
I supplied three years of bank statements and three years of production figures, and then they took production and expenses and came up with a percentage of office overhead, and lab fees and everything, and based their projected income off of that. They had one problem that they were concerned that my accounts receivable was very, very low. And, for 25 years or since I’ve been in Floydada, we’re a fee for service, we do file insurance but everything is paid by the patient and really the only accounts receivable we have is outstanding insurance.
At the time that Andy looked it was less than $5000, and they used that, and once they decided that that was legit, that we weren’t trying to pull something over, and then my office overhead is quite low for an average dental office. I had to justify the reason that we were doing that but we have a very low rent, or lease payment, and it includes everything, janitorial. They were able to take that and run with it. It’s almost a no-brainer to come.
Did you have a lawyer already in place or did you use one that they had referred you?
I’ve got a friend for the last 40 years and he looked over my part. They supplied or recommended a lawyer to Dr. Shively and he used a financial consultant that ddsmatch recommended, and they did most of the paperwork, and my lawyer looked over it. There were a couple of items that I wanted changed, took a week to do that, and everything was signed and ready to go.
If somebody were to say, “hey, I know of another guy who’s a broker, why shouldn’t I use him instead of ddsmatch?” Why would you recommend that they would use ddsmatch?
For the personal touch. Maybe it’s because I’ve known Andy for 25 years, but I’ve met some of the other consultants with the ddsmatch and I think they go above and beyond what has to be done to list a practice. I can’t say enough good about ddsmatch.
Did they help you with the transition with your staff? Do you feel like they saved you from anything?
They saved me from a disaster of trying to do it myself. Because if I had done that, there’s several things I would not have thought of that had to be done, and they helped with easing the staff into the transition, to assure them that they would be taken care of and supplying all of the necessary forms for state board, radiation board. There’s a multitude of things you have to do to quit practicing dentistry.
Did you send a letter out to your patients informing them about the new doctor?
We did. Right after we had the interview with the newspaper, Dr. Shively and I together wrote a letter and we took the active patients from the last two years and did a mail out to them. We actually used patient families rather than individual patients because some of those would have four and five patients in a family. But, we sent that out about a month ago.
Have any of the patients mentioned the letter or say anything about their impression of Dr. Shively since learning about you putting you dental practice for sale?
They were, most of the patients, when they came in, they were more interested in talking about me leaving than Dr. Shively coming. But, the fact that he has devoted the last five years to serving our country in the military with nine months deployment in Iraq, speaks volumes for his character and what he’s going to mean to the community. I have no doubt that Dr. Shively will be an instant success in Floydada.
If somebody doesn’t know Andy or ddsmatch, could you reassure them about his character?
Andy’s the most honest person I know. I have no . . . I’d trust him with my wife and kids to go somewhere, and I don’t do that with most people.
Having practiced for so long in a smaller community, you’re watching kids grow up, then you’re treating their kids. What that is like from your perspective?
Probably half of my patients call me Dr. D., the other half call me Bill, because I go to church with them, or I’m on the school board. I’m just one of them. Particularly for these that, like the Davidsons, where I see their kids and grandkids and great grandkids, they’re really more family than they are patients. And that’s the beauty of working in a small town. When you leave the office you may see them at the grocery store, you’re going to see them at the football game, or the basketball game. The only problem I have is that we have patients coming from all the little towns around and at the basketball game, I forget and holler for the wrong team sometimes.
It must be really nice to be able to regard your patients as neighbors and friends.
Exactly. I treat them like I would want to be treated because they’re coming back. Even though I’ve got a drawing area of 20,000 people, that’s a finite amount of people and if you don’t treat every one of them properly you’ll eventually run out and that’s what little towns are all about.
What is your case to make for doctors choosing smaller towns or rural areas over the city?
If you go to a small town, we are . . . Lubbock is a town of about 200-and-something-thousand people, Texas Tech University is there, and they’ve got everything you could want. It’s 45 minutes away. If you’re living in Houston you may drive an hour to go eat somewhere and if you’re living in Floydada, you could be anywhere in Lubbock within an hour, and you’ve got anything you want. You got a major airport that’ll get you where you want to go, and, as I said, you’ve got an instant practice the day you open up your doors and in a large city you have to work to get people to come in. Or, go in as an associate and work for five years before you can actually become a partner.
The nice thing about being in Floydada is, I am my own boss. If I want to take Thursday and Friday off, I take damn Thursday and Friday off.
What you’re looking forward to next?
Got my four grandkids here. I’ll have them for the rest of the week, and two are from Virginia, and two are from about two hours away. I’ll play with them. I’m going to do some part-time dentistry in Lubbock, doing dental sleep medicine with oral surgeons that I’ve worked with, but just slowing down, enjoying life.
Ddsmatch Southwest can also help you with your dental practice for sale
At ddsmatch Southwest, our team members are dental practice transition specialists. Our aim is to help you get what you want out of your dental practice transition. We meet with you to find out or help establish your transition goals and work diligently toward them. With our experience, we know to cover all the details. You can be as involved—or not involved—as you’d like. If you are considering transitioning your practice in the next five years, we offer a free, no-obligation Practice Transition Assessment. Contact us today and find out what we can do for you.
https://www.ddsmatchsouthwest.com/wp-content/uploads/2019/07/3-dental-practice-for-sale_HERO.jpg6281200adminhttps://www.ddsmatchsouthwest.com/wp-content/uploads/2018/06/DDSMatch-buy-a-dental-practice-sell-a-dental-practice.pngadmin2019-07-05 17:38:332019-07-09 17:44:39“The Personal Touch”: Why One Doctor Used ddsmatch When He Put His Dental Practice for Sale