Why Hunting for Comps Isn’t Always the Best Use of Your Time
Guest post by Tommy Leigh, Vegas One Realty
Shopping around for comps before buying a dental practice may seem like a given for some. To find the best staff with the best service and the best customers, it’s going to take some time and effort to figure out which one fits a buyer’s objective. But just like so many things in life, the answer isn’t always tied up in a simple solution. It may take a little more foresight and a different kind of planning to achieve the best possible outcome.
Every Practice Is Different
No matter how similar a practice may look on paper, the reality can be extremely different than it seems. Beneath what appears to be great promises might in fact be such concerns as a high turnover rate or an overall sense of dissatisfaction from both staff and customers alike. Just because a practice is only a few miles away from another and they both look somewhat similar at a glance doesn’t necessarily mean they should be priced similarly. The basics are just that: Basic — and looking at surface-level attributes can only take one so far.
Some Things Can Change
Excluding practices for certain reasons based on an ‘ideal’ model is one way to miss an excellent opportunity. A dental practice with an old-fashioned website or a less-than-optimal layout shouldn’t necessarily be a deal-breaker. A few bad reviews on the structure of appointments does not represent an inherent systemic issue with the practice. Dental practices are often happy to work with potential buyers to ensure they can get their practice up to speed. They may be willing to upgrade their outfit with a few extra perks while taking the time to get their staff up to speed. It may only be a few simple tweaks that need to happen before the deal becomes that much sweeter for the buyer.
Take a Deeper Dive
What may be more prudent is to take a deeper dive into the specifics of client retention rates, prices, and profitability. To really understand a practice, leaders have to perform a deep dive into the numbers behind the practice. While location and presentation are certainly draws, figures such as cash flow will give buyers a better idea of what a practice is worth. Each one of those figures tells a small story that all adds up to the actual worth of a practice. As with so many decisions, the real devil is in the details so it all starts with taking a hard look at a singular practice. From the state of the technology of the practice to the quality of the furniture in the waiting room, this is the time to discover what makes each practice different from its direct competitors.
Getting ready to buy a dental practice will be a time-consuming process no matter what approach a decision-maker takes, but there are ways to cut down on the amount of back and forth. Rather than starting with an overwhelming amount of potential candidates and then taking the time to painstakingly cross them off a larger list, it may make more sense to look at one promising practice in order to determine the real worth underneath. Make sure to keep an open mind about the ideal features of an ideal practice — they may not always be as obvious as they seem.
Tommy Leigh is the Broker/Owner at Vegas One Realty. Tommy’s team takes great pride in its ability to put clients first and provide the highest level of honesty and expertise in everything they do.