27 Apr Everything Dental Blog April 2017
Everything Dental Blog April 2017
What’s your next move?
The landscape is changing and the patients are different too. In years past, dentists struggled with case acceptance, patient flow, productivity, profitability and a healthy work/life balance. Today the demands are much greater and the investment in technology can cripple a poorly run organization. In addition, the patients have a much better dental IQ and they have web practice reviews to help them select a dentist that meets their criterion.
I have been promoting customer centric policy and marketing my entire career. Great customer service is paramount but not exclusive. If you want a progressive and profitable practice you must have operational efficiency, a strong re-care program and you have to know how to treatment plan. For dentists who participate in insurance, know your CDT codes and what’s covered by the insurance plans you participate in. Panelists must work with their teams to improve case presentation and case acceptance numbers. Team members should focus on popular cosmetic and elective procedures as they impact cash flow and profitability.
When you have been serving dentists as long as I have, you get frustrated when incredible people fail to do ordinary things. I have seen too many respectable dentists allow their businesses to slip because they are reluctant to invest in technology and or they resist change.
I am forever grateful that twenty four years ago I was given this opportunity to work in dentistry. I came from another industry and I never expected or even dreamed of such a rewarding career. This is what fuels my passion and desire to help those clients that choose to work with me. However, I am perplexed when long time clients fail to create a fruitful exit strategy or fail to seek me out for my expertise in these matters. When you serve hundreds of dentist’s mergers, acquisitions and small groups happen organically amongst your clientele. I have helped dozens of dentists create a more satisfying exit strategy and it all starts with a conversation.
There are many pathways for senior dentists regarding a favorable exit strategy. With the right plan and resources a dentist can create the ultimate exit strategy while preserving their legacy. The seller must understand the merits of a lucrative front end deal versus a baneful back end transition. There are tax implications and strategies to consider. The seller should have a sense of responsibility towards the community, their patients and their staff who support their brand and the practices identity. Many dentists attend a seminar or two sponsored by a broker, management or transition company and they go home invigorated or deflated. These emotions and their fate is tied to their preparation or lack thereof. In some cases, it’s too late to change the transition opportunities and outcome. For others who have time (2-5 years before they plan on transitioning) there is a great deal of upside. Knowing what strategy is best for you requires a working knowledge of your practice and honest feedback from you. The transition environment can be chaotic and confusing unless the seller understands; the value of their practice, the value of their good will and their after-sale commitment.
Some dentists will prepare for years to orchestrate their best exit strategy or payout. These dentists remain current clinically, invest in their people and the facility in which they work. Dentists who resist change and fall behind will have less bargaining power and will eventually accept offers below market value for their practice.
The naysayers and doomsayers are louder than the optimists. I have over one hundred forty clients who run the gamut from institutions to groups with the majority being in private practice. My clients are fee for service, insurance dependent and some are Medicaid offices. Within each category there are highly successful and profitable practices. The key is knowing who you are and who you serve and how you can earn an honest buck providing dental care. If you hear a dentist say the “the glory days of dentistry are gone” they are referring to a time when cash was king and insurance was not the norm. However, if your practice does solid bread and butter dentistry and you have a nice mix of implants, invisalign® and Perio patients – Life is good – Very Good.
I am often asked, when is the right time to begin thinking about an exit strategy? The answer is simple. From the day you open your practice great consideration about patient and provider attraction should guide your decision making. Make the facility and practice desirable and inviting for patients and comfortable and up to date for those who work in it. When people want to work for you it is very easy to find a suitor for your practice.
Not all dentists will sell their practice to another clinician. Many dentists, whose facility does not meet the current requirements (4 or more ops) will merge their practice into another that has the manpower, resources and facility to support the influx of new patients. Most buyers are looking for a minimum of four ops to orchestrate a two doctor, two hygienist practice. They actually want that fifth or sixth operatory to accommodate a specialist or swing rooms. This business model yields more revenue and often times adds one more appointment per provider per day. Today, many dentists will sell their practice to a DSO or MSO because it’s easy. They are well funded, have a great story to tell and are actively courting senior dentists.
In the end, it’s nice to have choices. Dentists who vet various options tend to have the best transitions. Selling your practice can be one of the toughest or most rewarding transactions you’ll ever do and it can have significant implications on your retirement.