The Newby, The Young Gun, The Rockstar & The Legend…Which One Are You?
By Jon Rutty, Practice Transition Specialist
Have you ever wondered what it will be like to transition your practice? No doubt you have heard stories from mentors or colleagues about the process and perhaps that is the reason you haven’t even thought about it or had the thought “I’ll cross that bridge when I get there.” But here’s a question, what if you’re on the bridge right now and you don’t even know it?
For over a decade I have helped doctors across the nation improve their practices. I have traveled to 41 states and met doctors with all sorts of ambitions, but in my humble opinion, the majority of them fell into one of two buckets.
- The doctors who waited too long to start thinking about their practice transition and who are now desperately trying to make something happen before they get too tired to continue, or worse lose their health; or
- The doctors who have not even begun to think about their practice transition but soon begin to realize, “If I don’t sell when I’m at a high, I may not be able to make the return on my investment like I want to”.
So how do you know when you should start to look. Here are some key factors that assisted my most successful clients in transitioning well.
- They started the process of inviting another provider in before they even thought of a transition. And because they did, they got to find the right person for the job. They weren’t desperate for someone to take over quickly or to fit a specific mold. They had agility because they had time on their side.
- They saved for their retirement early. While many of the doctors I worked with were running out of steam and low on money to support their retirement, the wisest doctors had been saving for years and were working with a professional to assure that they would not be solely dependent on their practice sale to fund their dreams.
- They had a clear vision for what they wanted. Some doctors I know don’t have a vision for their next steps and because of this they wait too long to begin the process of finding a suitable doctor to join them in transitioning. But when you have a vision behind your eyes, you can see how the work you put in now to make the practice desirable to potential buyers will pay off and you operate with clarity and on purpose instead of “one day.”
So where do you stand? Where are you on your transition timeline?
The Newby – I just bought a practice. I’m beginning to dream about my career and will dedicate time to building out my ideal retirement throughout the process.
The Young Gun – I’ve been practicing for 5-10 years now and have a nice sized practice. It may be time to start inviting another doctor in to have flexibility and perhaps find a future business partner.
The Rockstar – I’m at what could be the peak of my career. My use-before date is closer than my born-on date. I have thought a lot about when and how, but I’ve never taken any steps to discover more.
The Legend – I was booming just a few years ago, but I’m seeing some decline in my office and I’m tired of trying to find new ways to market myself. Add to that, a lot of my colleagues are retiring. It’s just a matter of time now.
No matter who you are in this scenario I can tell you that as a business owner, if you don’t seek out a highly skilled transition consultant, then you are either spending too much time trying to figure out what works, or you are likely depending on the experience of staff to help you grow your business. Omni has a long history of helping doctors with successful practice transitions. Newby, don’t wait too long to find one. Young Guns, same to you, but you are likely in a place where you need to start looking for a doctor to join your practice. Rockstars and Legends, it’s past time to talk with someone about your transition. Even if you are still 5-8 years away from taking the plunge, you owe it to yourself to talk with an experienced transition expert to discover the best options for you moving forward.
At Omni, we specialize in helping owners transition their practices into the hands of capable and competent private owners. We can arm you with a practice valuation so that you can see what your next step could be and for those of you reading this newsletter, we are happy to do that absolutely FREE. That’s a cost savings to you of about $3,500. Click the link below for more information on how to begin the process.
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Practice Ownership: A Path to Financial Freedom for Dental Graduates
By: Max Truesdel
Dental students often graduate with substantial debt, which can feel overwhelming at first. However, practice ownership presents a viable strategy to overcome this financial burden. By owning a dental practice, dentists can significantly increase their income potential and build equity, offering a clear path to financial freedom.
The dental industry has experienced remarkable growth over the past decade, with increased awareness of oral health and spending on dental care. This expansion presents a lucrative opportunity for dentists to capitalize on a thriving market. Owning a practice allows dentists to directly benefit from this growth, as opposed to working as associates where income potential is often capped.
One critical step in this process is finding the right practice to purchase. This is where a dental practice broker becomes invaluable. Dental practice brokers specialize in connecting buyers with suitable practices, ensuring that the location and operational aspects align with the buyer’s goals. They provide insights into market trends, financial evaluations, and facilitate negotiations, making the complex process of purchasing a practice more manageable and less risky.
Using a dental practice broker also helps to identify practices in high-growth areas, ensuring better patient flow and higher revenue potential. They can access a wide range of listings that may not be publicly available, providing more opportunities to find the perfect match.
Additionally, brokers can assist with due diligence, ensuring that the financial health of the practice is sound and that there are no hidden liabilities. This thorough vetting process is crucial for new owners to start on solid ground and focus on growing their patient base.
In conclusion, practice ownership is a powerful way for dentists to overcome student debt and achieve financial stability. The dental industry’s continued growth enhances this opportunity, and using a dental practice broker can significantly ease the transition into ownership. By leveraging the expertise of brokers, new dentists can find the right practice, set the stage for success, and turn their student debt into a stepping stone towards a prosperous career.
Read MoreOvercoming Veterinary Student Debt Through Practice Ownership
By: Max Truesdel
Veterinary students often graduate with substantial debt, which can be daunting. However, practice ownership presents a viable strategy to overcome this financial burden. By owning a veterinary practice, veterinarians can significantly increase their income potential and build equity, offering a path to financial freedom.
The veterinary industry has seen remarkable growth over the past decade, with increased pet ownership and spending on pet healthcare. This expansion presents a lucrative opportunity for veterinarians to capitalize on a thriving market. Owning a practice allows veterinarians to directly benefit from this growth, as opposed to working as salaried employees where income potential is capped.
One critical step in this process is to find the right practice to purchase. This is where a business broker becomes invaluable. Business brokers specialize in connecting buyers with suitable practices, ensuring that the location and operational aspects align with the buyer’s goals. They provide insights into market trends, financial evaluations, and facilitate negotiations, making the complex process of purchasing a practice more manageable and less risky.
Using a business broker also helps to identify practices in high-growth areas, ensuring better patient flow and higher revenue potential. They can access a wide range of listings that may not be publicly available, providing more opportunities to find the perfect match.
Additionally, brokers can assist with due diligence, ensuring that the financial health of the practice is sound and that there are no hidden liabilities. This thorough vetting process is crucial for new owners to start on solid ground and focus on growing their business.
In conclusion, practice ownership is a powerful way for veterinarians to overcome student debt and achieve financial stability. The veterinary industry’s growth over the past decade enhances this opportunity, and using a business broker can significantly ease the transition into ownership. By leveraging the expertise of brokers, veterinarians can find the right practice, set the stage for success, and turn their debt into a stepping stone towards a prosperous career.
Read More6 Reasons Why Your Veterinary Practice Won’t Sell
By: Rodney Johnston, MBA, CMA & Jim Vander Mey
Your practice has successfully worked for you for many years, so why isn’t it selling? Don’t get discouraged, understanding these challenges can help you adjust your approach. The issues typically fall into two categories: problems with your transition consultant or challenges with the practice itself.
1. Inadequate Practice Representation
Working with an inexperienced transition consultant can significantly hinder your sale. The right consultant knows where and how to advertise beyond simple website listings. They may connect with veterinary schools nationwide, professional journals, and state associations. Many already maintain lists of potential buyers for your area or practice type. Without these connections and marketing reach, your practice may remain invisible to ideal buyers, through no fault of your own.
2. Inaccurate Valuation
Price your practice too high, and you’ll unintentionally drive away qualified buyers who might otherwise show interest. Even if you find someone willing to pay premium prices, they’ll face financing challenges since banks rarely fund 100% of overvalued practices. This creates an unexpected situation where you become the bank for part of the purchase price. A comprehensive, accurate valuation from the start helps avoid these complications.
3. Undesirable Location
Sometimes it’s simply not finding the right veterinarian at the right time. Often, location limitations present significant challenges regardless of practice quality. Areas that aren’t attractive to new graduates or their families struggle to attract buyers, even when the practice itself is thriving. While your location may have been perfect for your needs, younger veterinarians may prioritize different community features.
4. Insufficient Practice Size
We know 2 exam room practices can operate efficiently and profitably, but today’s buyers may seek 3 rooms or more. Your practice layout worked wonderfully for your style of practice, but new buyers often anticipate expansion and want facilities that can evolve with their vision. This size limitation doesn’t diminish your practice’s value. It just means finding the right match may take longer.
5. Declining Revenue Trends
Declining collections over the past three years raise red flags for both buyers and lenders. They understand legitimate reasons such as more time off due to vacation or health issues, but the numbers still matter. Banks analyze historical performance when approving practice loans, and downward trends require explanation. While these factors slowed your sale, they don’t make it impossible.
6. Outdated Facilities and Equipment
Most buyers understand they may need to update style, equipment, and technology, but if it requires substantial investment, they may keep looking for a better practice. Modern veterinary medicine has evolved, and significant renovation costs post purchase can make an otherwise attractive practice less appealing. These factors don’t diminish what you’ve built. They simply narrow your buyer pool.
If your practice falls into any of these areas of concern, it will take more time than average to sell. Lowering the price may help, but if there is no interest, it’s not the price that’s the problem. Don’t give up or get mad, just understand that while your practice may have been perfect for you, it can be a while to find the right buyer.
Work with an experienced transition consultant to identify specific improvements that might increase marketability without requiring substantial investment. Omni Practice Group offers consultations to help veterinarians create effective transition strategies tailored to your specific situation and practice realities.
Read More6 Reasons Why Your Dental Practice Won’t Sell
By: Rodney Johnston, MBA, CMA & Jim Vander Mey
Your practice has successfully worked for you for many years, so why isn’t it selling? Don’t get discouraged, understanding these challenges can help you adjust your approach. The issues typically fall into two categories: problems with your transition consultant or challenges with the practice itself.
1. Inadequate Practice Representation
Working with an inexperienced transition consultant can significantly hinder your sale. The right consultant knows where and how to advertise beyond simple website listings. They may connect with dental schools nationwide, professional journals, and state associations. Many already maintain lists of potential buyers for your area or practice type. Without these connections and marketing reach, your practice may remain invisible to ideal buyers, through no fault of your own.
2. Inaccurate Valuation
Price your practice too high, and you’ll unintentionally drive away qualified buyers who might otherwise show interest. Even if you find someone willing to pay premium prices, they’ll face financing challenges since banks rarely fund 100% of overvalued practices. This creates an unexpected situation where you become the bank for part of the purchase price. A comprehensive, accurate valuation from the start helps avoid these complications.
3. Undesirable Location
Sometimes it’s simply not finding the right dentists at the right time. Often, location limitations present significant challenges regardless of practice quality. Areas that aren’t attractive to new graduates or their families struggle to attract buyers, even when the practice itself is thriving. While your location may have been perfect for your needs, younger dentists may prioritize different community features.
4. Insufficient Practice Size
We know 3-op practices can operate efficiently and profitably, but today’s buyers may seek 4 to 6 operatories, especially to add more hygiene. Your practice layout worked wonderfully for your style of practice, but new buyers often anticipate expansion and want facilities that can evolve with their vision. This size limitation doesn’t diminish your practice’s value. It just means finding the right match may take longer.
5. Declining Revenue Trends
Declining collections over the past three years raise red flags for both buyers and lenders. They understand legitimate reasons such as more time off due to vacation or health issues, but the numbers still matter. Banks analyze historical performance when approving practice loans, and downward trends require explanation. While these factors slowed your sale, they don’t make it impossible.
6. Outdated Facilities and Equipment
Most buyers understand they may need to update style, equipment, and technology, but if it requires substantial investment, they may keep looking for a better practice. Modern dentistry has evolved, and significant renovation costs post purchase can make an otherwise attractive practice less appealing. These factors don’t diminish what you’ve built. They simply narrow your buyer pool.
If your practice falls into any of these areas of concern, it will take more time than average to sell. Lowering the price may help, but if there is no interest, it’s not the price that’s the problem. Don’t give up or get mad, just understand that while your practice may have been perfect for you, it can be a while to find the right buyer.
Work with an experienced transition consultant to identify specific improvements that might increase marketability without requiring substantial investment. Omni Practice Group offers consultations to help dentists create effective transition strategies tailored to your specific situation and practice realities.
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