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Dentistry Named a Top Job; That’s Good News for Texas Dental Practices for Sale

In a recent ranking of professions by US News & World Reports, dentistry came in as the second best option, just behind software developers in its 2020 rankings. This is a step up from fourth place in the 2019 rankings. For dentists with Texas dental practices for sale, this is good news, as what is being offered is not just a profitable business, but a solid and rewarding career as well.

While that ranking is for general dentistry, professions throughout the oral healthcare industry fared very well. Orthodontists and oral and maxillofacial surgeons were both in the top ten of overall jobs (at four and nine, respectively) and in the top five of best paying jobs (with oral and maxillofacial surgeons at number three and orthodontists at number five). Dental hygienists came in overall at 24th, prosthodonists at 56th, and dental assistants at 66th. In the more specific category of health care jobs, dentistry came in at number one, orthodontists at number three, and oral and maxillofacial surgeons at number nine.

The criteria US News & World Reports relied on for their rankings started with which jobs would have the largest number and percentage of projected openings between 2018 and 2028, as determined by the US Bureau of Labor Statistics (BLS). Then, the publication ranked the jobs based on other criteria such as median salary, employment rate, ten-year growth, future job prospects, stress level, and work-life balance.

The Tangibles and the Intangibles

According to the BLS, dentistry has an expected 10,4000 job openings with a 7.6% employment growth. It also reported that dentists have a median salary of $151,850, up slightly from 2019 when the median salary was $151,440 (although this is down from 2016 when the median salary was $153,900)

Here in Texas, we have two cities where dentists’ median salary is the highest. Topping the list is Amarillo, where the median salary for a dentist is $279,920. This is followed by Longview, where the median salary is $275,530. This indicates it may be a good time to put Texas dental practices for sale as potential buyers may be looking to build their careers where the fields are fertile.

The top five is rounded out by Fond du Lac, WI ($268,920,  Reno, NV ($267,410), and Sebring, FL ($259,660). If you look at the mean salary, the highest amounts are in Delaware ($264,440), Alaska ($259,350), Rhode Island ($254,190), Minnesota ($227,280), and New Hampshire ($226,300). 

And, of course, the specialists can earn even more. Orthodontists and oral and maxillofacial surgeons earn a median salary of $208,000, while prosthodontists have a median of $176,540.

It’s not all about the money, though. Measurements of dentists’ flexibility in schedules and work-life balance were both found to be above average from all of the professions reviewed. Also, the upward mobility and stress levels were found to be in the average range. Meaning, you can have an average to above-average experience in the profession while earning a well above average salary.

How Well Does This Reflect the Reality of Being a Dentist

The answer to this question, of course, is that it depends. The US News & World Report ranking is encouraging for the future of the profession of dentistry. It is, however, based largely on statistics and does not really give a full picture of what it means to be a dentist. 

As your experience has probably shown, while you can earn a high salary, what isn’t always apparent is the cost of getting that salary. After all, in 2018 the average dental student graduated with a student loan debt load of $285,184. When coupled with a dental practice loan to start or buy a practice, debt payments can take a big chunk of your potential earnings. However, when viewed as an investment and properly organized, a smart doctor can service their debt and still enjoy a high income.

There are also many aspects to practicing dentistry that can provide satisfaction beyond just meeting career milestone goals or earning potential. A successful practice keeps the doctor busy all day, every day, providing a sense of satisfaction in the work accomplished. Also, the work being done is a kind that genuinely has a positive impact on your patients. It’s possible to look back at the end of each day, week, month, year, or career, and see how you’ve made peoples’ lives better. 

At the end of the day, the real value of Texas dental practices for sale is the goodwill that the practices have built in the community. This goodwill doesn’t come from how efficiently you’ve organized your practice in order to maximize production out of each of your chairs. It comes from the care you provide to patients and the relationships you form with your community through that quality of care.

ddsmatch Southwest Has Texas Dental Practices for Sale

ddsmatch Southwest are dental practice transition specialists with an expertise in finding the right match for New Mexico and Texas dental practices for sale. We help visualize your future, set achievable goals, and devise strategies to start you in the direction of your post-transition dreams, well in advance of your intended transition time frame. If you are considering transitioning your dental practice in the next five years, we offer a free, no-obligation Practice Transition Assessment. Contact us today and find out how we can help you achieve your practice transition goals.

Tap Your Hygienist’s Production Potential Before Putting Your Dental Practice for Sale

We recently posted an piece suggesting you set production goals to help maximize your earnings per day and hour as a way to boost your income both as a way to increase your profitability and to build value before placing your dental practice for sale. Relatedly, you can make the same adjustments with your practice’s dental hygiene production. 

In most practices, aside from what you produce, the only other major source of production are your dental hygienists. Some consultants recommend that you have a goal of having hygiene make up about 25% of your practice’s overall production. That’s a significant amount, but it is something that is achievable if it is well planned as part of overall scheme to create efficiency. Below are five suggestions for how to get more out of your dental hygienists.

1 – Patients Past Due for Hygiene Treatment

Who do you think will have a greater impact on patients overdue for hygiene treatment: your administrative staff members or your dental hygienist? We mean no disrespect to your staff members. They may be highly professional and capable people who excel in their capacity. However, they are not providers of clinical treatment. That is, they are not seen as having knowledge and expertise in hands-on dental care. The difference this makes to patients might surprise you.

You can leverage this in two ways. First, if your hygienist has time in their schedule (due to a gap or a no-show), they should have a list of patients ready to contact to encourage them to make an appointment. Second, they can also create a script for the administrative staff members to use, relaying a message from the hygienist about the overdue treatment, encouraging them to set an appointment. This script might focus on the importance of regular, ongoing hygiene treatment that will enable them to keep their teeth for their lifetime, one that educates about dental care and periodontal health in a positive and helpful way.

2 – Elective Procedures

As you know, your dental hygienists have more time with your patients than you or any other member on your team. Over the last several years, there is more of a focus in our society on whitening and, among adults, straightening of teeth. While these procedures may not be clinically necessary for ongoing oral health, many of your patients may find an appeal in these procedures. Many practices are underperforming when it comes to cosmetic procedures, implants, and adult orthodontics. You can leverage the time your dental hygienists have with your patients to offer and discuss these options. 

Additionally, as you grow closer each day to the time when you will place your dental practice for sale, building this into your practice will be a selling point—having employees who are invested in and critical to increasing the practices overall productivity.

3 – Ongoing Treatment Reminders

You probably have a number of patients to whom treatment plans have been suggestion but that haven’t accepted your recommendations or haven’t completed the treatment. Too often, dental practices will provide a treatment plan recommendation and then simply leave it to the patient to decide. Consider, however, how many of those patients would be more likely to accept or complete the treatment plan with follow-up conversations?

Presenting a treatment plan is often not just a two-step process where you present the plan and the patient opts to accept it or not. There may be myriad factors as to why a patient chooses to accept or complete a treatment plan. The best way to boost your case acceptance rate is to have, in essence, an ongoing conversation about the treatment plan.

Your hygienists should make it regular practice for each appointment to review the patient’s file, see what treatment has been recommended but not completed, and to discuss that with the patient. Even if the patient’s reason is related to the annual renewal of dental benefits, it’s important to remind them of what is needed and why it is to their benefit. This way, you can leverage the time your hygienists spend with patients.

4 – Periodontal Diagnostics

Whether you know it or not, periodontal disease is a widespread problem, affecting about 65% of all patients, yours included. Most people don’t understand what it is, really, even though they may be experiencing its symptoms (such as red, swollen, or tender gums; bleeding when brushing; bad breath). This lack of awareness is an opening for your hygienists to be recommending care through a periodontal diagnostic program. If you create the program and train your hygienists on how to educate patients, you’ll be providing them with additional level of care and using your hygienist’s time to get closer to that 25% production goal. And, again, if you have a program like this being boosted by hygienists, that will only help you when you decide it’s time to place your dental practice for sale. 

5 – Dental Hygienist Assistants

You have employees for a reason: you simply don’t have time to do everything and, because your time is valuable, you need to delegate the simpler tasks to someone with less training, skill, and experience. The same can be true for dental hygienists. 

Not everything your hygienists are doing needs to be done by a hygienist, such as preparing rooms for treatment, developing x-rays, and performing other administrative duties. If you run your hygiene program like you run your work— having hygiene appointments in multiple chairs with an assistant doing prep work while the hygienist moves between chairs performing their work—you might be surprised at how much more productive it can be. If you have a high volume practice and available chairs, you might be able to increase your hygiene productivity by as much as 33%. Again, imagine how this will look to prospective buyers when you are ready to put your dental practice for sale

Selling a Dental Practice? We Can Help

ddsmatch Southwest are dental practice transition specialists committed to helping doctors meet their practice transition goals. If you are considering transitioning your practice in the next five years, we offer a free, no-obligation Practice Transition Assessment during which we will review with you the current, local dental practice transition market, best transition options for your practice, physical and image improvements to increase value, potential practice investments, and present and future staff integration. Contact us today and find out what we can do for you!

You’re Buying a Dental Practice—Do You Know How to Run It?

Buying a dental practice is an exciting time in a doctor’s career, a point where you are standing on the cusp of achieving your goal of owning your own practice and being your own boss. And while your future is bright, there are a lot of responsibilities that come with buying a dental office for sale, many of which don’t involve dentistry. In this article we’ll provide some suggestions on how to manage your separate roles as a clinician and as CEO of a small business. 

It’s not uncommon for doctors to express frustration about the need to switch back and forth between these roles. This is understandable as they involve two very different sets of skills, one of which, as a clinician, you have trained for and have experience with. You know how to do that job. The other, as a business owner, you probably don’t have the same kind of formal training and experience. This can make the transitions feel awkward and uncomfortable. And, at the end of a long day, you may feel like you don’t have any gas left in the tank.

Don’t Work On Your Business While Working In Your Business

What does it mean to work in your business? That is when you are practicing dentistry and directing your team with matters relating to patient needs, treatment plans, and so forth. What is working on your business? Well, that’s the business side. This is when you’re doing things like looking at the numbers (production, collections, new patients, referrals, case acceptance rates, costs, etc.), dealing with employee and employment concerns (evaluating your employees, making staffing decisions, hiring, firing, fielding complaints, etc.), making decisions about marketing, and just generally making sure the lights stay on. You might like one better than the other, but they are both essential to the success of your dental practice.  

The simplest approach is to keep these two roles separate. You can do this by setting time aside each day to focus on the business side. For instance, after buying a dental practice, you can let your staff and scheduling coordinator know when these hours will be, that appointments shouldn’t be scheduled during these times, and that is when you’ll address business related concerns with staff. You can even set them outside of regular business hours so as not to impact your production time. 

The benefit of this approach can be twofold. First, you get the benefit of focusing on one thing at a time, which typically makes it easier to be more productive with your time. And, second, if you schedule it first thing in the morning, you can get the business stuff done first and spend the rest of your day being the clinician. 

Assuming you have someone doing your payroll and other accounting tasks (and we definitely recommend outsourcing this— if your accountant doesn’t provide this service they can definitely recommend someone who does), you shouldn’t need much more than four hours a week (maybe a little more to account for a learning curve in the early days after first buying a dental practice). Also, having designated and focused time to work on your business gives you space to consider the state of your practice and where you’d like to grow. 

Use Your Team Members

A common practice is for team members to begin each day with a morning huddle to review what’s scheduled for the day. But you can also use the morning huddle for business matters that may be better delegated to team members. Remember, you are the CEO. As an executive, it’s part of your job to assign tasks to the employee best suited for it. 

It does require a bit more additional thought and preparation from you, but it will pay off in the time that you will save overall. Let’s say you notice that you are having gaps here and there in your appointments. Note that and then compare your days and weeks with your production goals. This may be an area you can get your team to help with. 

First, you can ask your scheduling coordinator to watch for these gaps and present them to the team during the morning huddle. Second, ask the team to consider your patients and whether those gaps can be filled. Is there someone overdue for treatment? Have the appropriate staff member start making calls to get those openings filled.

The morning huddle is simply an opportunity you have to get your whole team communicating. By involving them more in the business side matters, you can increase their involvement in more areas of the practice, which can help them have a vision of their role on the overall organization. This way they may feel more integral to the success of the office, more valued, and, thereby, more invested in helping your practice succeed.

If you have an office manager, it may also be worthwhile to set aside time each day to check in with them before either of you leaves the office. This helps you keep your finger on the pulse of what’s happening throughout the office while you are busy with patients. You also should have a separate designated time with your office manager to review anything that may require your direction.

Thinking of Buying a Dental Practice? We Have Dental Practices for Sale in Texas and New Mexico

At ddsmatch Southwest, we typically represent doctors with dental practices for sale, in Texas and New Mexico. But we believe in working closely with those buying a dental practice to make sure there is a good fit between the seller, the buyer, and the practice. We believe a good deal is one where everyone walks away happy: the buyer has confidence in the practice they’ve purchased and the seller has confidence in the buyer to continue and build on what they’ve established. If you are ready to take the next step in your career, check out our available listings. It all starts with a conversation, contact us today!

Four Steps to Increase Production Before Putting Your Dental Office for Sale

It’s 2020. A new year, a new decade, and a great time to get your dental practice on track for its most successful period yet. To make that happen, however, you’ve got to have a plan and the sooner you get that plan in place, the better. Ultimately, the day will come when it’s time to put your dental office for sale and the time to start building value for that transition is now. In the meantime, you can enjoy the rewards that your increased success will bring.

There are different ways to measure success. It can be in increased overall production revenue (a good measure for a young or mid-career doctor). It can be in increased production per hour, leading to having to work fewer hours (this might be better for an older doctor who is looking to work less but maintain a steady income). Whichever measure you use, the following steps will work for any doctor who wants to increase earnings for their practice.

Step One: Make a Production Plan

First things first, you’ve got to have a specific plan that includes your ultimate goal and the steps along the path to reach it. For instance, if you want to reach $1.5 million in production, that will require you to bring in $31,250 each week (based on 48 work weeks in the year—you can, of course, adjust that for more or less time off). Breaking it down even further, if you work 40 hours each of those 48 weeks, this will mean you need to be producing around $721.25 each hour you work.

Next, how do you do this? First, you should set daily production goals and work with your scheduling coordinator to arrange appointments that will enable you to meet those goals. Their job is not just to keep the chairs filled but to do so in a way that maximizes your production per hour. This means that they need to be trained on each procedure you perform, how long it takes, and what it’s value is in production. It’s like a jigsaw puzzle, figuring out which piece goes where to create the overall picture. If all your scheduling coordinator is doing is fitting patients into open spots on the calendar, you don’t end up with the picture you want, just a jumble of pieces. But when they know how to look for the right spot to schedule the right procedure, the vision of your production goals will come into view.

Second, you should have a designated treatment coordinator who is effective at presenting the treatment plans for all of the producers in your practice, and they should be able to meet, at a minimum, an 85% acceptance rate. Determining and providing clinical treatment is your skill. This is differentfrom being able to help patients understand the importance of accepting the treatment plan. You want the best person for each job. This team member should be able to spend as much time as necessary sitting face to face with your patients, to answer questions, resolve concerns, and address any perceived barriers to acceptance of the plan. Your treatment coordinator should also follow up with patients after the initial presentation as part of their regular responsibilities. This is how you get more patients accepting treatment, scheduling the next appointment, and boosting your production.

Related to increased reliance on your staff is raising your overall customer service standards. When your patients feel seen, heard, and well cared for in every aspect of their experience with your office, that boosts your reputation and increases your word of mouth referrals (and, remember, when you put your dental office for sale, most of the value falls into the nebulous category of “goodwill,” and you will be well served by being able to demonstrate the goodwill you have built through superior customer service). You can become known as the best doctor in town when your patients feel that they are cared for. This leads us to the next step.

Step Two: Remember the Patient’s Needs

Too often when patients are presented with treatment options, the plans are presented on an assumption of what the doctor or office believes the patient can afford. This is the wrong approach. It assumes the best option to present to the patient is the one the doctor is betting the patient is most likely to accept. This puts the doctor’s interest (in getting the patient to accept further treatment) above the patient’s (in getting the best treatment for them). Your office should be presenting all available options to the patient and letting them choose for themselves.

This approach, however, involves a little more time and patient education (which is why it’s best to have a designated treatment coordinator, who can put in that time). Your treatment coordinator should present all available treatment options and address the patient’s immediate needs, their long-term needs, and any other treatment options that the patient may have asked about. When patient’s understand what is available and how the options do or do not address their needs and desires, they are more likely to accept further treatment. Its empowering them to make a choice in their best interest, rather than have only one option dictated to them.

As stated, however, this requires time and education. Patients have to be informed about what the treatment options are, what they entail, and what clinical issues they will address (and what they won’t). When patients are shown what is happening in their mouths (with x-rays or other images), and when they learn about the conditions you’ve diagnosed (perhaps through videos), they have a much better understanding of why you are recommending a course of treatment. When they know what you know and they understand its importance, leading to a higher acceptance rate.

Step Three: Review Your Production Reports for Indicators of Problem Areas

Do you know how much money is owed to your practice right now? If not, you should be reviewing your practice reports carefully, looking at things such as your accounts receivables and outstanding insurance claims. You should know how much is owed, and from who, in order to better be able to collect and perhaps make changes to resolve any consistent problems in these areas. You also need to review your production, new patient flow, and patient retention for any recurring issues that need to be addressed.

If you have associates or other doctors working in your office, you should review these reports for their production, as well as your hygienists. If your software allows for production forecast results, use that tool to identify slow periods in production that may lead to shortfalls. As noted above, a key to increasing production is maintaining a consistent level across all providers each hour of each day of every week throughout the year.

Reviewing these reports with your team members will also help them to understand how each part of the practice impacts the others. That is, the success of each person in your office helps the other team members do their job better. Think of rowers on a crew team: maximum efficiency comes from precise, coordinated effort. One person out of sync will slow everyone down and require them to work harder to make up the shortfall.

Additionally, having this kind of detailed sense of your office’s production, and having all of your team members working together, will be a great aid when you put your dental office for sale. Prospective buyers will pay more for a fine-tuned machine than they will for something that needs work. 

Step Four: Reduce Your Overhead

If your practice is doing well in an overall sense, you may not have felt the need to look too closely at your overhead costs. If it isn’t broken, don’t fix it, right? Sometimes, however, we don’t know something is broken until we examine it. 

What is reasonable overhead for your practice is going to be determined by a number of factors that are specific to your practice. That said, a good rule of thumb are the industry standards. Use these as guides and review your costs and see how close you are. If you are too far off these benchmarks, look at those expenses to see what’s happening and how they can be reigned in.

For the dental industry, the standard is about 55% of your collections. That means you keep 55 cents in profit for every dollar you make. To break it down further, here is about where you should be with specific overhead categories:

  • Payroll: 20%
  • Laboratory: 10%
  • Rent: 5%
  • Dental supplies: 5%
  • Payroll taxes and benefits: 3%
  • Office supplies: 2%
  • Miscellaneous: 10%

If your overhead is out of bounds with these standards, make the necessary changes to reign it in. You can then take the money you’ve saved on overhead expenses and reinvest it in things that you may have thought you couldn’t afford, such as technology that will increase your productivity and attract patients.

If You are Thinking of Putting Your Dental Office for Sale, We Can Help!

Here at ddsmatch Southwest, we are dental practice transition specialists with an expertise in counseling doctors on how best to position their dental office for sale. We’ve developed a Practice Optimizer to help doctors plan and prepare for their future. If you are considering transitioning your dental practice in the next five years, contact us today and find out what we can do for you.

The Advantages of Dental Associateships and Buy-Ins

It’s a great time to be a dentist that owns their own practice. Whether you are currently in a dental associateship looking to expand your interest in a practice, or an owner looking to sell or expand, a buy-in—also known as a minority interest transaction—can work to the advantage of both the buyer and the seller. 

From the point of view of the owner-dentist, a dental associate buy-in can be a good plan for a dental practice transition. Rather than just bringing on an employee, a dental associate becomes a partial owner. The benefit here is that the junior dentist has a greater investment (both literally and figuratively) in the practice. They are more likely to stay with the practice and work harder for its growth and success. By having more at stake, they will have more of a long term view. Also, when it comes time for the senior dentist to retire, there is already someone settled in the practice, who knows the staff, the patients, and the community. It makes for a smoother, simpler transition. By going through the process of hiring an associate and allowing them to buy-in, you are essentially hand-picking your successor.

Additionally, by creating a partnership agreement between the senior and junior dentist, the senior dentist is assured of the continuity of the practice in the event of their death or disability. Partnership agreements typically require the surviving partner to buy-out the other, meaning that the practice will continue. Without such an arrangement, it’s possible that the practice—something a doctor has worked to build over many years—may end up closing its doors without any of its value being transferred to the dentist’s family.

For the associate, a buy-in can be a tremendous opportunity. They get to share in the benefits of practice ownership, not just be a worker that clocks in and out and collects a paycheck. They get to learn how to manage and grow a practice, but do so under the tutelage of an experienced practitioner and business owner. It provides the opportunity to learn real world skills and business acumen that isn’t taught in dental school. Essentially, the associate gets to learn how to own a practice without having to take on the full risk of ownership.

How it Works

The dental associateship buy-in timeline usually takes place in two parts. First, the associate would buy a minority interest in the practice. 10-20% is a good starting point and is typical for these arrangements. A smaller percentage is beneficial for these types of partnerships because this will be a trial period for both parties. If it turns out to not work for whatever reason, it will be a lot easier to end a partnership that only involves 10-20% rather than half, most, or all of the practice.

The second part, then, is the complete buyout of the senior dentist’s remaining interest. This would probably occur when the senior dentist decides it’s time to retire, but, as referred to above, could be accelerated by the death or disability of the senior dentist. Although such instances are not common, its best for both parties to carefully consider what they would want to happen in such circumstances before finalizing a buy-in agreement, just to be sure this is a path they want to go down together.

After the junior dentist has purchased an initial stake in the practice, generally staff and patients take that doctor’s role more seriously than if they were simply an employee for hire. Although the junior partner is not on par with the senior partner, there is a clear difference when they have bought into the practice (literally and figuratively). Staff will view them differently, especially knowing that the junior will become senior one day. And when that day comes, it can be a more seamless transition than if a stranger is brought in one day and introduced as the new boss. The associate will have had ample time to earn the confidence of the staff and patients.

The Best Partnerships are True Partnerships

There is no doubt that a dental associateship and buy-in is a serious commitment by both parties. It requires mutual respect, open communication, and a solid legal agreement. The most heavily negotiated part of buy-in is not the purchase agreement, but, rather, the partnership agreement. Both parties must be clear on their expectations and those expectations must be aligned for it to work. 

These documents can be very detailed and technical. Whichever side you are on, you will need an experienced attorney to negotiate on your behalf and provide expert counsel on such things as voting rights, management responsibilities, CEO compensation, withdrawal provisions, personal guaranty requirements, matters requiring unanimous consent, deadlock provisions, drag-along rights, required chairside responsibilities, and several other issues.

You should be carefully considering each of these issues, along with the others raised by your attorney. And don’t just considering them in abstract, but within the context of a very real long-term working relationship that you are taking on. Unfortunately, not all of these partnerships work out. Most do, however, you will be well served by not going in blindly or with rose-colored glasses. As with any relationship, business or personal, If you proceed with good faith and your eyes open, you greatly increase your chances for success.

ddsmatch Southwest Can Help You with Right Dental Associateships

ddsmatch has been successfully connecting the dentist’s present with their future for ten years. Recently, 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.

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.

Start Planning for Retirement Before Selling a Dental Practice

It’s never too early to start planning for retirement. As dental practice transition specialists, we here at ddsmatch Southwest know that selling a dental practice is often not enough, on its own, to support a dentist and their family through the period of retirement. Proceeds from the sale are significant, indeed. But consider, if you are accustomed to earning $200,000 or more a year from your practice, selling it for $1m will only support your lifestyle for five years or less.

If your practice consistently reports high earnings, it’s a good time for you to start an employer-sponsored, qualified retirement plan. In addition to good planning for your future, you can do it in a way that will also save you money on your yearly tax bill through deferred compensation.

The Devil is in the Details

First, you will need a dental accountant. The ability to maximize your retirement savings and minimize your tax liability is going to require an accounting professional with an expertise in your business. Using a general CPA might seem like it will be cheaper, as they may have lower fees. However, in the long run, what you save—both in your retirement accounts and from lower tax bills—will make a dental CPA specialists worth the extra costs.

The reason for this is twofold. First, you need a CPA who understands your business in the most detailed way. If you are the only dentist in your accountant’s portfolio, then you are paying for their learning curve. And you can’t be confident that they are picking up on and correctly incorporating all of the details that are specific to dental practices.

Second, you need a CPA who has a functional understanding of the full panoply of retirement plans, not just the most common ones (such as the ones you, as a non-accountant, can think of off the top of your head). Do you know the difference between a defined contribution plan and a deferred benefit plan? That difference could mean savings in the amount of hundreds of thousands of dollars. The specialist is worth the extra expense.

Is Your Practice Right for a Defined Benefit Plan?

Do any of the following apply to you?

  • Are you nearly 50 years old or older?
  • Are your earnings consistently on the higher side?
  • Do you have a relatively young staff?
  • Do you employ a high number of specialty employees (i.e. hygienists)?

If any of these apply to you, a defined benefit plan might be a good fit. Consistent high earnings are important because these types of plans are based on formulas. With a deferred contribution plan, you have a maximum contribution, set by law, for your allowable deductible contribution. If you can save more, with higher tax savings, through a defined benefit plan, you should be making use of one. However, you need to review your financials with a dental CPA to be certain.

Also, if you are nearing 50 or older, you should be considering what position you want to be in when it comes to selling a dental practice. The better prepared you are now, the better prepared you are when that day comes (especially if it comes sooner than you think because of an unexpected life change).

Here’s How it Works

If you paid yourself $300,000 dollars in salary and paid your taxes on those wages, this can be essentially the same as claiming $150,000 in salary and your business organization contributing $150,000 to the defined benefit plan as a deductible contribution made on your behalf as an employee of your business. This would save you money on your state, federal, and Medicare taxes for the first year you claim it (even if you wait until the very end of the fiscal year) and every subsequent year, as you would only be taxed for the $150,000 claimed as salary.

If you are paying close to 50% in taxes, considering the double Medicare tax as the owner of the business, and the extra Medicare tax on earnings above $250,000 for a married couple filing jointly, this can translate into at least $75,000 each year that you will save in taxes. Instead of paying that to the government, you are paying it into your defined benefit plan for your retirement. This means that half of your $150,000 retirement plan contribution is being made of tax savings.

How this will play out for your specifically is dependant upon a number of factors, a major one being how you have organized your dental practice (as an S-corp, LLP, LLC, etc.). That factor, after consultation with your dental CPA, can be combined with other methods of savings to fund the balance of your retirement account. 

Finally, a defined benefit plan, like most qualified employer-sponsored retirement plans, are immune from creditors. Regardless of what happens after you set it up, the contributions will appreciate without being taxed until the funds are disbursed, which will likely be after selling a dental practice.

What’s the Downside?

Of course there is a downside. An employer-sponsored defined benefit plan is different from other retirement funds because the employer knows the formula calculating the benefits ahead of time. This means that if there is a funding shortfall (due to either faulty assumptions or poor investment returns), the employer is legally obligated to make it up with a cash contribution. As the owner of your business, this would mean you would owe yourself the difference out of your business’s earnings.

Because of this potential liability, it is essential that your carefully consider your options after a thorough consultation with an experienced and reliable dental CPA.

Selling a Dental Practice? We Can Help

Ddsmatch Southwest are dental practice transition specialists committed to helping doctors meet their practice transition goals. If you are considering transitioning your practice in the next five years, we offer a free, no-obligation Practice Transition Assessment during which we will review with you the current, local dental practice transition market, best transition options for your practice, physical and image improvements to increase value, potential practice investments, and present and future staff integration. Contact us today and find out what we can do for you!

How Asset Allocation Helps When Buying a Dental Practice for Sale

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

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

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

The Depreciation Rule

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

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

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

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

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

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

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

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

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

Why Negotiating Asset Allocation Matters

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

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

Everything is Negotiable

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

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

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

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

Tips for a Successful Transition when Buying a Dental Practice

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

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

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

Patience is a Virtue

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

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

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

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

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

Don’t Mess with Success (Yet)

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

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

If it Ain’t Broke . . . 

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

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

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

Considering Buying a Dental Practice in Texas and New Mexico?

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

Good Hires Build Value When Selling a Dental Practice

One of the most valuable assets of a successful dental practice is its employees. Whether they are front desk personnel, office managers, hygienists, or assistants, a staff member that is responsible, attentive to detail, good with patients, has the ability to listen and learn, and looks for ways to improve office practice or policy is worth much more than what they may represent in terms of production or collections. They are invaluable. In addition to making your practice more successful (and your life much easier), they are part of what will ensure your legacy and reassure your patients when it comes to selling a dental practice.

The question is, how do you hire good people? It’s a difficult question to answer, however, one method is to hire smart people with the intangibles you need and then train them in whatever technical skills they may lack. That is, you look for attributes as much as specific skills. For instance, you may be accustomed to posting want ads that are a list of skills, including a working knowledge of your equipment or software, thinking that you don’t have the time, or need the bother, of training a new hire on how to use it. And, true, it will take some time. Consider, however, how much longer it will take—if it’s even possible—on how to teach a new hire appropriate interpersonal skills. Or how to think critically. Or how to understand their role in a team environment. Which would you rather do?

There is no harm in requesting preferences in terms of these skills, such as “proficiency in Acme Software preferred.” But if you make it a requirement, you may be weeding out the best candidate before you’ve even posted the ad. Honestly, if a smart and capable person can learn one software program, or machine, they can learn another. And a few months down the road, you’ll find yourself with an employee that you appreciate and contributes to your practice, as opposed to one who requires less up-front training but may end up creating problems with their personality.

What Qualities Do You Really Want from an Employee?

The first thing you have to determine is what is it that you are looking for. Some of this may be applicable to any dental practice. Good dental office employees often are positive people with upbeat personalities. Let’s be frank, many people dread the dentist and a friendly smile and helpful attitude can go a long way to helping your patients feel comfortable. This kind of employee is often calm, kind, friendly, and wants to help the patient feel comfortable and cared for. In short, these employees are putting patients’ needs first.

Beyond that, however, you need to ask yourself what are your practice’s core values? What is your practice’s identity? What is its image? What do you want to communicate to your patients, and the community you serve, about who you are as a care provider? The answers to these questions will further illuminate the qualities you should look for in your hires.

Having a strong sense of you practice philosophy will be a great aide to you throughout your career. It will help guide how you market your practice, how you grow your practice, and, when it comes to selling a dental practice, which doctor is the right doctor to sell to— one who reflects your practice’s values and will mesh well with the legacy you have built. 

Essential Attributes

The Ability to Learn

A person who believes they already know everything they need to know will always be at a disadvantage to one who is open to being taught. This applies to everyone, even dentists. An assistant who is open and willing to learn new technologies and techniques will be a much better addition to your practice than one who assumes that how they’ve always done things is simply good enough.

While this might seem simple enough, many people are made uncomfortable by new information or methods. They may see it as a challenge to their abilities or value as an employee. Instead, you want employees who are comfortable with opportunities to expand their knowledge and skill set, who will see it as a chance to make themselves better prepared and more capable at doing their job.

Instrumental to this, however, is that your employees understand how they fit into your organization. That is, they can see how all of the parts mesh, working together for the efficiency and success of the organization. You and all of your staff members should be able to see themselves as parts of a whole, each benefiting the others, not as individuals whose interests are at odds with one another.

The Ability to Listen

The ability to listen within a clinical context takes two forms: the ability to listen to patients and the ability to listen to coworkers. 

You need your patients to feel calm. In order to feel calm, they must feel comfortable. To feel comfortable, they need to feel that they are in a friendly and safe pace. This is done when they feel that they are seen as individuals whose concerns are being heard and addressed. And for them to feel heard, they must be listened to.

Also, remember that your patients may not be expressing themselves directly. Sometimes it’s in the idle chit-chat that they reveal themselves. So, when your patients are talking, be sure that your staff is listening. When your patients feel heard, they’ll feel cared for. 

Additionally, you need staff members that listen to each other. If there are problems in the office (and there will be problems), you need staff members who can communicate openly about the issue and work together to resolve it. Many disputes between co-workers originate and escalate when they view each other as rivals. This means they are not talking or listening to each other, but advancing personal goals. As much as your patients, your employees need to feel that their workplace is one that is calm, comfortable, that values them and their contributions, and where they can also be seen as individuals. An office that functions this way will also be highly attractive to potential buyers when it comes to selling a dental practice.

The Ability to Present Cases

The attributes discussed above lend themselves well to case presentation. This is important, however, because it’s more likely that your assistants, hygienists, or administrative personnel will be regarded as a confidant than you, as the doctor. 

There is no question that what you are prescribing is the best course of treatment for your patients’ needs. Patients, though, may be skeptical about whether there is a difference between what they need and what you may want to earn. This is simply a reality of the dental business.  

When you have employees that communicate well with your patients, actively listening to and understanding their concerns, they are well positioned to back you up on treatment plans. They can reinforce the importance of the care being provided, reassuring the patients that its in their best interests. An ability to hear what is on the patient’s mind and respond, both with empathy toward the patient and an understanding of why the treatment plan is important, is an essential attribute. 

ddsmatch Southwest Can Help With Selling a Dental Practice

Protecting your legacy is important to us when it comes to selling a dental practice. That means finding the right match to reflect the values you’ve built your practice around. To find out more about how we can help you find the right buyer, contact us today.

Why You Need a Marketing Plan Before Putting Your Dental Office for Sale

Marketing is not always something a busy doctor wants to spend their limited time on. Regardless of the relative success of your practice, without adequate marketing, you may see your busy practice become less so. Whether you are just starting out (looking to draw patients and build a reputation), are comfortably ensconced in your practice (looking to maintain or enhance your reputation and continue to draw new patients), or are preparing to put your dental office for sale (looking to bolster your practice before the transition to a new doctor), marketing is an important part of maintaining a successful practice.

Consider this: of the major brands out there—such as McDonald’s, Coke, Nike—how often do you encounter their advertising? Constantly. Is it because they lack customers? No. Its because they understand that by keeping their brand in front of consumers’ eyes, that recognition will translate into customers. People are drawn to the familiar, as it seems reliable. And when it comes time to choose a dentist, you want people in your community to see your practice as familiar and reliable.

What is Marketing?

Marketing is basically anything that you do to make potential patients aware of your practice and promote your expertise, reputation, and quality of care. It includes a wide variety of communication tools: signs on your building or on the street near your parking lot, advertising (increasingly this is online, however, depending on your market, it may also include billboards or other outdoor ads and local tv or radio spots), sponsorship of local events, social media, your website, email, direct mail, and in-office brochures. With a small business like a dental practice, your focus should be on targeting your local community. Advertising outside of the area from which you draw patients will be wasted money. Look around at other successful local business and see where are they putting their resources.

All of these “channels” make both your current patients and potential patients aware of your practice. The most effective way to make use of these channels is, first, be sure to have a strong logo with a consistent use of colors so that its recognizable wherever it’s seen (again, think of the McDonald’s yellow M, Coke’s red and white colors and font, the Nike shwoosh). And, second, consider what you want associated with that logo. What defines your practice? Quality of care? Sensitivity to patients’ needs? These two together are your brand identity.

Having a strong brand identity is particularly important when it comes time to place your dental office for sale. The brand should transcend simply the identity of the individual doctor, but represent something larger than one person: an idea of the practice, a philosophy to which the practice, as an institution, is committed. This way, when you have a change in doctor, or staff, your patient base can feel reassured that they’ll receive the same quality of care to which they are accustomed.

If you don’t already have a strong logo and practice identity, it may be worth hiring a local marketing consultant to help you develop them. This consultant will also have unique insights into your local market to help guide you towards the messaging and channels that will be most effective in your community. This will certainly require some capital, but, remember, this is money invested in boosting your practice. 

On that point, be sure you can track the effectiveness of your measures (for instance, ask new patients how they heard about your practice). If your marketing efforts aren’t bringing a return, you’re on the wrong path.

How Marketing Helps

The bottom line of marketing is getting patients into your chairs. This is done by making your community: 

  1. Aware of your practice.
  2. Aware of your particular services, skills, and other practice attributes.
  3. Aware of how these services, skills, and attributes will be of benefit to them.

You make people aware of these things by:

  • Building brand awareness – As discussed above, whenever a patient or potential patient sees your logo, you are making them aware of your practice and planting a seed in their mind.
  • Targeting specific audiences – This can be based on the location of the audience or it can be further targeted to sub-demographics such as more affluent patients, budget-minded patients, families, patients focused on obtaining the best services, etc. What audience you want to reach will largely determine which channels to focus on and where to place your ads.
  • Connection with Community – social media is a great way to communicate directly with your community. Facebook, Twitter, Instagram and other platforms allow a back and forth with patients outside of the clinical setting in which you can express your practice’s “personality.” Don’t be afraid to be informal or funny if that reflects you and your practice.
  • Develop Your Practice Identity – As you identify your practice values, you can express these through your marketing efforts. Potential patients get a sense of what your practice represents and how they can connect to those values. You can emphasize these through consistent use of keywords such as “compassionate” or “gentle.” Your website and social media channels can also show what your office looks and feels like, so people know what to expect and can be reassured their making a good choice in choosing your practice.
  • Showing What Sets You Apart – Its important that you distinguish yourself from other practices in your community. Do you have technology or tools that are different? Do you have any promotions or pricing programs that might make you more attractive? Do you offer unique services or procedures? Do you have amenities that other providers don’t? Showcase these differences. You don’t have to be negative about it—there is no need to call anyone out. Just show what you have that patients want.

It’s never too early, or too late, to start a strong marketing program. As mentioned above, it will pay off when it comes time to place your dental office for sale, because you’ll have something of value that goes beyond just a patient base. You’ll have an identity that represents ideals that are valuable in your community.

ddsmatch Southwest Can Help Prepare Your Dental Office for Sale

At ddsmatch Southwest, we believe that the right buyer for your dental practice is not just one with financing, but a doctor who is the right fit for your practice. You’ve spent your career building a reputation in your community and the right buyer can help to protect your legacy. If you are considering transitioning your dental practice in the next five years, we offer a free, no-obligation Practice Transition Assessment to help you get ready to place your dental office for sale. Contact us today to find out what we can do for you.