Owning a dental practice can be like drinking water from a fire hose. It completely consumes you physically, emotionally and intellectually. You not only wear the hat of a clinical dentist, you have to also play the role of human resources, accountant, marketing, public relations, lease negotiator, salesman, supply management, janitor, referee, etc. Whomever believes there is a 40 hour work week as a practice owner has not owned a dental practice. Yet, all the public ever sees of you are your two eyes above your surgical mask. They don’t see or appreciate your countless hours refereeing staff disputes, negotiating a new lease, fixing a broken chair, or installing a new light. They think you are gone fishing or at your lake house every weekend.
Many of you have recognized the power and need to delegate. You have people you can trust – your knowledgeable service rep now fixes your chair, a skilled plumber who fixes the leaky sink and an expert commercial broker who takes care of your lease. By delegating you have freed up your time, reduced your stress and let the experts use their skills to do what they do best.
When it comes time for your dental transition, you can try doing it yourself, but that’s like giving the patient a sharp dental instrument to clean their own teeth. They don’t have the knowledge, experience or skills to do it right and may end up bleeding in the end. Or, you can entrust your dental transition to the people at OMNI who have the experience, knowledge and track record to help you achieve your goal giving you peace of mind, freedom and more happiness.
Here are a few things you can do to help prepare for your dental practice transition:
1. Know your financial situation – Meet with your financial advisor, CPA, or whoever gives you financial advice to get a good picture of where you are with your savings and investments.
2. Get a practice valuation – A practice valuation will help you see how much equity you have in your practice. Additionally, a CPA can help you figure out what the taxes and net proceeds from your sale will be.
3. Update Technology – Buyer’s like to see new technology in a practice.
4. Cosmetic updates – Have you updated the interior with paint and carpet in the last 20 years? If not, it’s time. Buyers like a practice with a fresh feel to it. A 1970’s feel was good in the 1970’s.
5. Review Accounts Receivable Aging – Collect any past due accounts, send to collections or write them off. Also, review credits to either pay back to the patient or send unclaimed property to the State.
6. Review Staffing – Are you over or understaffed? Adjust accordingly.
7. Clean up your financial statements – Make sure the expenses you’re running through your dental practice financial are related to your practice, or at least identifiable as an adjustment.
8. Consider ramping up production – If you are not sure how, then hire a dental consultant. Ramping up your practice when you’re 3 or more years out will pay dividends on the sales price.
9. Review your fees – Do you have the lowest fees in the area? Consider a fee increase to catch up.
10. Harvest your Equity – Maybe you are a few years away from retirement, but tired of being an owner. You should consider selling now, take the equity out of your dental practice and work back as a dental associate.
1. Where You Practice Matters – Know where you want to practice and the demographics of the area you are looking to practice. There are a lot of different websites and services you can look to in order to get this information. A lot of commercial brokers (Steve at Omni Healthcare Real Estate) will have data ranging from a breakdown of the age of the population, to ethnicity, income levels, how much money was spent on dog food per person, etc., There are several services such as Scott McDonald’s that will help you gather data as well.
2. Knowing Your Market – Understand what the numbers and ratios of a typical dental practice should look like. Your state or national association has resources that will show how much you should be spending on staff salaries and benefits as a percentage of total collections, as well as rent, marketing and other financial data as a percentage of collections.
3. Basic Accounting – Start educating yourself on basic accounting principles. Specifically, learn how to read a financial statement – profit and loss report and balance sheet. You will be given these by the dental broker when looking at a practice, so you should at least know what they are and what a financially viable practice looks like vs. a not so nice practice.
4. Bank Financing – Contact a bank that specializes in dental practice financing before you start looking. They cannot necessarily pre-approve you for a certain practice, but they can tell you whether you can get a loan, approximately what rate and terms you can get and possibly how much you may be able to qualify for. You don’t want to go after a $2 million practice if you cannot get a $2 million loan.
5. Looking For Red Flags – Knowing where to find the skeletons in the practice is a key element in the process. Where do you look for embezzlement in the practice? How about hidden staff incentives and payments? Over or under treating patients? Uncollected accounts receivable? Etc.,
6. Learn About Leases – What is a triple net lease? What is the market rate for leases? How much time is left on the lease? What’s a tear down clause?,etc.,
7. Surround Yourself With a Good Team– Surround yourself with a good team; CPA, Broker, Attorney, Consultant, etc., Find those that specialize in your specific discipline. They can help you avoid some of the pitfalls you may miss.
By preparing yourself ahead of time with some of these things, you can avoid having to spend more than you need to and find a practice that will bring you great professional challenges and rewards in the long run.
Hard Work and Dedication
On average, it takes approximately 200 man hours to complete a transition from start to finish. The experienced team at OMNI Dental Practice Group work hard to complete the process as quickly as possible by focusing on each client’s needs, while maintaining complete confidentiality until the sale is completed. One way OMNI Dental Practice Group does this is by showing the dental practice after hours, over the weekends, and will even conduct showings throughout the holidays as needed. When it comes to selling a dental practice, OMNI Dental Practice Group is dedicated to the success of their client, before, during, and after the sale.
Keeping the Buyer Focused
Due diligence is a key part in dental practice transitions. The experts at OMNI Dental Practice Group strive to keep buyers focused throughout each step of the process. Obtaining financing, for example, can be a complicated and drawn out step in selling a dental practice. Through assisting buyers with the financing portion of dental practice transitions, OMNI Dental Practice Group helps maintain the momentum of the sale up to closing, regardless of the type of transition needed to ensure the best possible outcome from both the seller and the buyer.
Hundreds of doctors have successfully bought and sold their practices through the OMNI Dental Practice Group. The experience allows the professionals at OMNI Dental Practice Group to handle a wide variety of dental practice transitions throughout each step of selling a dental practice, with creative transitions and solutions being a specialty. Some of the types of dental practice transitions include:
- Setting up associate to own agreements
- Partnership sales
- Merging practices
- Outright sale of the practice
OMNI Dental Practice Group has the experience and resources to successfully perform all aspects of the transition process, such as:
- Real Estate Services
- Transitions and Sales
To learn more about how OMNI Dental Practice Groups helps doctors sell their dental practice in the Washington, Oregon, and California area, please contact their team of experienced professionals for a free consultation.