You cannot have a dental practice transition unless you have a practice that someone else wants to buy. It is critical that you have many factors working in your favor to sell your practice.
There are both physical and esthetic attributes, along with sound business metrics and positive staffing considerations.
The question when considering a dental practice transition is, How do you create a saleable practice?
PHYSICAL AND ESTHETIC ATTRIBUTES
Location is always an important factor in any business or real estate deal. How much traffic goes past your office will help drive up new patients.
? How easy it is to enter and exit your office will help get new patients?
? Are you close to a school or a shopping center?
? Are you in a new or growing part of town or are you in a tired area that is not showing growth?
Next you have to consider the appearance from the road and what the interior of your office is like. Make sure trim is painted and not peeling. Is the landscaping inviting? Is the upholstery on your furniture torn and dirty or bright and comfortable.
? Do you have a physical barrier between the reception area and the receptionist?
? Is the carpet or tile in good shape?
Buyers look at all these things and it will affect their attitude about buying the office.
? Is your dental equipment modern or antique?
Both will sell, but the old stuff will bring a lower price. You will need to calculate what buying new equipment will cost against what the buyer is willing to pay for the old equipment.
Also you need to consider whether you can recoup the cost of replacement against just reducing the price to offset buying new equipment.
? Are you digital?
Any more the standard in any modern office is to have computer records and digital x-rays at the very least. A digital Panorex is prevalent in most offices also. If this is not the case, you will need to consider buying the digital upgrades or recognize that this is a big liability when selling.
BUSINESS METRICS AND STAFFING
If someone is going to buy a business, they have one of two approaches. The first is to buy an office that is profitable with good systems in place. They expect to pay a reasonable price.
The second type is looking for a bargain basement sale. If you are not making a good profit, if your production and collections are not high, if you are not seeing many new patients or have a sizeable group of patients of record, you are not going to get a good offer.
A few years before I sold my practice, I approached an older doctor who was going to close his office without selling it. He had run it down to nearly nothing and the physical plant was old and dated. I bought his phone number and his charts for $5000. I could not activate all his patients of record because they had left because of the state of the practice, but I did activate enough of his clients to more that pay for the cost to buy out the practice and not have another doctor come into our community in his office space.
You have two choices if you do not have good metrics:
1. Sell for less or improve your metrics.
When I sold my office, I had above average numbers, but I wanted to get the maximum return on my 40+ years of practice.
2. Hire an expert to boost your performance and profitability.
I hired consultants to help me improve all the key performance indicators that create success.
This is what you need to make the practice very attractive to the buyers.
I had long-term employees that had good relationships with our patients. This makes a buyer feel better about patient retention after you are gone. We had put in place many systems so that the team knew how to run the office without me micromanaging each and every thing going on in the office. I had many long-time patients that created the base for a smooth transition. The result of these efforts was to increase the sale price by about 30%.
The choice is yours:
Create a great, saleable practice, or bail out of the practice with less return on investment than you could have realized.
If you need help with your transition, give me a call for a free thirty- minute consultation, or engage us for coaching you all the way through your TRANSITION. Also you can get my free E-BOOK at our website, dentalpracticesolutions.com/resources
ABOUT THE AUTHOR
DAVID BLACK, DDS, FICD, FACD
Dr. Black is an associate coach for Dental Practice Solutions. He is “The go-to-expert for all dentists who are thinking about transitioning into retirement or buying their 1st dental practice.
Dr. Black owned his own dental practice for over 30 yrs. There he developed an understanding of the critical importance in development of the owner-doctor’s leadership abilities, in addition to having great clinical skills. Once he built a high-level of productivity in his dental practice, he was able to sell to a group practice; and the rest of his career as a dental practice owner is history.
In 2015, Dr. Black decided to share his knowledge to help other dentists duplicate his level of success, so he became a leadership coach and practice management consultant. His niche is treatment planning and case presentation.
Dr. Black is currently an associate coach and consultant, for Dental Practice Solutions, one of the leading consulting firms for nearly twenty years. As a seasoned practitioner, Dr. Black adds to the proven hygiene profitability coaching that Dental Practice Solutions is well-known for providing, to dental practices around the world.
Dr. Black’s expertise as an EQ and DISC trainer, makes him the best person to help more patients to say “YES!” to your patient care, as well as to enjoy working together as a team and loving what you do for your patients!