Author: omniadmin

PRESS RELEASE
​
KENMORE, WA, September 26, 2019 – OMNI Practice Group, a provider of dental, veterinary, chiropractic and medical practice transitions, sales, valuations, consulting and real estate services, today announced that Joseph Coury has been named as Chief Executive Officer.
 
Mr. Coury brings more than a decade of banking experience to his new role as CEO. Before joining OMNI, Mr. Coury was Senior Vice President, Veterinary Division, at California Bank of Commerce where he provided start-up, construction and practice transition financing and other banking services to over 1,000 veterinarian clients throughout the United States.
 
“When we looked at where our company was going, we recognized the need for an individual dedicated to providing the leadership, organization and business development necessary to achieve our goals,” said OMNI Founder and Principal, Rodney Johnston. “Our search brought us to a known person who had the exact qualities we were looking for. We are excited to have Joe on board as we take OMNI to new heights while maintaining our company’s reputation for hard work and integrity. We are excited for the future of OMNI.”
 
In addition to taking over management of OMNI’s day-to-day operations, Mr. Coury’s role at the company will include strategic growth initiatives, expansion of educational programing, creating dynamic synergies within OMNI and being an ambassador to the brand.
 
“In the practice transition industry, there is no other organization with the talent and ingenuity that OMNI has shown in providing innovative solutions for their clients,” Mr. Coury stated. “Rod has built an amazing organization over the past 15 years and I am truly excited to join this team of professionals. I see no limit to the potential we can reach.”
 
About OMNI Practice Group
 
OMNI Practice Group is the leading provider of dental, veterinary, chiropractic and medical practice transitions, sales, valuations, consulting and real estate services. Headquartered in Kenmore, Washington, OMNI has additional offices throughout the U.S.
 
For more information about OMNI Practice Group, visit www.omnigroupintl.com.
 
Contact:
Rod Johnston, MBA, CMA
OMNI Practice Group
6141 Bothell Way NE #301, Kenmore, WA 98028
(877) 866-6053

​There are many advantages to owning a dental practice over being an associate dentist and not owning a practice.  For one, the average dental practice owner makes approximately 20% more in income than an associate dentist working for someone else.  A dental practice owner also gets to choose what procedures he or she wants to perform, refer out, or delegate to an associate (if there is one).  They can also choose their own hours; pick the days they want to work and how much vacation they want to take.  So, why aren’t dental associates owning practices?  What are they afraid of?  Here are a few fears we have encountered by dental associates and how to overcome those fears:

1. Fear of the unknown – Associates feel they don’t have the experience in owning a practice.  They don’t know what to expect.  They haven’t managed staff.  They haven’t kept financial records.  They don’t know what marketing to put in place.  They don’t know what benefits to give employees, how to hire or fire employees, or even how to balance a checkbook.

   Fear not, you don’t have to know everything at once.  You know how to do dentistry.  That’s the first step in owning a practice.  You have a few years of experience working as an associate in a dental practice.  You’ve observed the owner working with and managing staff.  You may have experience leading a team in school, playing sports, etc.  These are all examples of good experience in leading and handling staff.  You don’t have to know how to keep books right away.   We suggest getting a dental bookkeeper and then getting educated on reading financial statements and eventually doing your own books if you’d like.  This can happen over time.  Bottom line is if you are good at what you do and willing to learn the other parts of practice ownership, you’ll be just fine.

2. Fear of taking on more Debt – Read Robert Kiyosaki’s book, “Rich Dad, Poor Dad”.  Not all debt is created equal.  There is good debt such as student loans and practice debt that helps generate an income and there is bad debt such as credit card debt where you just borrowed money because you wanted something.  Practice debt used to buy a practice that will help you make more money and build equity in an asset (the practice) is a positive thing.  As long as it’s a good practice with good cash flow, you’ll be money ahead in the long run.
3. Fear of the DSO (Dental Service Organization) or Group Practice Giants – Don’t fear the giants.  They have their own niche targeting dental shoppers looking for the lowest price on a cleaning, crown or teeth whitening.   They also have a high turnover in their staff and doctors.  You will provide excellent service with the same staff and dentist that the clients will see every time they come to your office.  In a corporate environment, they’re not sure which dentist or hygienist they’re going to get next.
4. Fear of not knowing what to look for – This is a valid concern.  You can educate yourself in a number of ways.  There are great resources via Dentaltown, dental podcasts, YouTube, etc., that can help you know what to look for.  Quite simply, you start by looking at your desired location, then look at the cash flow of the practice and after that, you can get into the details.   There are consultants and brokers who can also help you with reviewing practices.  Identify your team that will help you overcome this fear.
5. Fear of a recession – Recessions happen, typically every 8 to 10 years and last 10 to 12 months.  You cannot avoid recessions or downturns in the economy, it’s part of life.  But, during recessions, employees typically get laid off of work.  If you own your own practice, you’re probably not going to fire yourself.  You’ll keep yourself employed and busy.  Owning a practice is a deterrent from getting laid off during a recession.

These are a few of the fears that we’ve seen over the years, and there are others as well.  But the best thing you can do is educate yourself and talk to practice owners, brokers and bankers.  Seek advice and counsel from everyone you can.   This will help you make a wise decision in moving forward with practice ownership.

For a chance to get advice from a team of experts all in one place – broker, banker, attorney, etc., we have 3 Practice Ownership seminars coming up this fall, all are free!  Click the link below for more information.

By  Rod Johnston and Jim Vander Mey

​There are many advantages to owning a veterinary practice over being an associate veterinarian and not owning a practice.  For one, the average veterinary practice owner makes approximately 20% more in income than an associate veterinarian working for someone else.  A veterinary practice owner also gets to choose what procedures he wants to perform and what type of animals he or she wants to work on.  Heck, they even get to choose which animals they want to work on.  They can also choose their own hours, pick the days they want to work and how much vacation they want to take.  So, why aren’t veterinary associates owning practices?  What are they afraid of?  Here are a few fears we have encountered and how to overcome those fears:

1. Fear of the unknown – Associates feel they don’t have the experience in owning a practice.  They haven’t managed staff.  They haven’t kept financial records.  They don’t know what marketing to put in place.  They don’t know what benefits to give employees, how to hire or fire employees, or even how to balance a checkbook.

   Fear not, you don’t have to know everything at once.  You know how to do veterinary medicine.  That’s the first step in owning a practice.  You have a few years of experience working as an associate in a veterinary practice.  You’ve observed the owner working with and managing staff.  You may have experience leading a team in school, playing sports, etc.  These are all examples of good experience in handling staff.  You don’t have to know how to keep books right away.   We suggest getting a veterinary bookkeeper and then getting educated on reading financial statements.  This can happen over time.  Bottom line is if you are good at what you do and willing to learn the other parts of practice ownership, you’ll be just fine.

2. Fear of taking on more Debt – Read Robert Kiyosaki’s book, “Rich Dad, Poor Dad”.  Not all debt is created equal.  There is good debt such as student loans and practice debt that helps generate an income and there is bad debt such as credit card debt where you just borrowed money because you wanted something.  Practice debt used to buy a practice that will help you make more money and build equity in an asset (the practice) is a positive thing.  As long as it’s a good practice with good cash flow, you’ll be money ahead in the long run.
3. Fear of the Corporate Giants – Don’t fear the corporate giants.  They have their own niche targeting the bargain shoppers and lemmings who follow the crowd.   They also have a high turnover in their staff and doctors.  You will provide excellent service with the same staff and veterinarian that the clients will see every time they come to your office.  In a corporate environment, they’re not sure who they’re going to get.
4. Fear of not knowing what to look for – This is a valid concern.  You can educate yourself in a number of ways.  There are great resources via podcasts, YouTube, etc., that can help you know what to look for.  Quite simply, you start by looking at your desired location, then look at the cash flow of the practice and after that, you can get into the details.   There are consultants and brokers who can also help you with reviewing practices.  Identify your team that will help you overcome this fear.
5. Fear of a recession – Recessions happen, typically every 8 to 10 years and last 10 to 12 months.  You cannot avoid recessions or downturns in the economy, it’s part of life.  But, during recessions, employees typically get laid off of work.  If you own your own practice, you’re probably not going to fire yourself.  You’ll probably keep yourself employed and busy.  Owning a practice is a deterrent from getting laid off during a recession.

These are a few of the fears that we’ve seen over the years, and there are others as well.  But, the best thing you can do is educate yourself and talk to practice owners, brokers and bankers.  Seek advice and counsel from everyone you can.   This will help you make a wise decision in moving forward with practice ownership.

For a chance to get advice from a team of experts all in one place – broker, banker, attorney, etc., we have 4 Practice Ownership seminars coming up this fall, all are free!  Click the link below for more information.

In 2015 Dental Services Organizations, or DSOs, owned approximately 12% of all dental practices.  Experts predict that by the year 2025, DSOs will own 25% to 30% of all dental practices and almost 50% by 2030*.  As a practice broker keeping a pulse on the practice selling market, we have not seen a lot of large DSOs, let alone smaller groups buying practices.  However, as of recently, that appears to be changing.  We’ve been getting more and more calls from DSOs and Private Equity groups looking for practices to purchase.  So, who are these DSOs, what are they looking for and what are they requiring of sellers?

These DSOs are groups who are looking to consolidate the dental industry similar to what has been going on with pharmacies, surgery centers, and hospital systems for many years.  In fact, as a side note, two-thirds of pharmacy revenues come from corporate-owned pharmacies.  The DSOs, especially the large ones, are backed by private equity money looking for good returns on their money.  Smaller group practices are typically backed by local or national banks.  The private equity groups like the dental market as there are good margins in owning a dental practice.  I’ve heard they can typically get a return of 15% to 20% after paying an associate salary and all other overhead.  They don’t require financing, so they don’t have the debt service payments that individuals may have.  They often consolidate the “back-office” functions – Human Resources, accounting, and billing to save money.  They also can negotiate better insurance reimbursements and dental supply prices than the solo practitioner.  For staff, they can offer decent benefits packages as a result of economies of scale.   However, they may not pay staff wages as well as solo offices.  The larger groups range from 30 practices under ownership up to several hundred locations with groups like Heartland Dental.

What are they looking for when they acquire a dental practice?  Many of them claim they will pay a premium for a practice.   I’ve been working as a practice broker for almost 15 years, and I’ve never seen a group, DSO, or Private Equity investor purchase a practice for an above market price.  Most have purchased practices at market, or even slightly below.  They like larger practices doing at least $800,000 and up.  That doesn’t mean they won’t buy smaller practices, but the larger ones are more appealing.  They like to acquire smaller practices in the area where they already have a larger practice so they can consolidate the smaller practice into the larger practice.  Most of them want the selling doctor to stay on and work in the practice.  Many of them want the seller to stay for up to 3 years.  Most will negotiate down to 2 years.  They usually do not give you your entire purchase price upfront.  They’ll give you 80% of the purchase price at closing, you will have to wait for the other 20% to be paid out upon certain conditions being met.  Those conditions include serving your agreed-upon employment term, the practice production staying at where it was before or even growing, and other conditions may be possible such as hiring an associate, managing the practice, etc.  If you don’t meet your conditions, the DSO may pay none or only a part of the last 20% of the purchase price.  And, if after a few months you decide that working as an employee for the group isn’t what you thought it would be, or you decide to move out of the area for health reasons, or for some other reason you decide to leave the practice and not meet your term, then too bad for you.  You forfeit the 20% that the DSO owes you.

The small groups, DSOs, etc., will also tell you that they prefer you not get someone to represent you.  That includes an attorney, a consultant or a practice broker.  They want to use their experience, their sales tactics and their gaggle of attorneys to negotiate a great deal, FOR THEM!  Yes, they’re not looking out for your best interest.  They could care less if most of your retirement nest egg is in your practice.  They care about building their market share so that they can make as much money for their investors as possible.
​
My advice if you have received a letter in the mail from a DSO or small group is to don’t go it alone!  You’ve been a dentist for quite a few years for crying out loud and haven’t negotiated a multi-million-dollar deal, dealt with aggressive attorneys or a large corporation.  Whether you use a broker, attorney or consultant, get someone on your team to represent you.  Our group at Omni has negotiated many deals ranging from $500,000 to $7 million and up.  This is what we do and have expertise.  Feel free to call us anytime to discuss your transition, an offer you received, or anything else where we can provide knowledge.   We’re always glad to help.

*Footnote: “Dental Service Organizations – The What and Why of DSOs – Part 1 of 6”  Posted on May 13, 2019 by Sara K. Stock. www.stocklegal.com/blog/dental-service-organizations-the-what-and-why-of-dsos

​There has been a great deal of discussion over the years about dental practice price, but very little has been said about practice value. It is especially important that practice buyers understand these terms and be able to differentiate between them since practice value has significantly more impact upon the future of buyers than does practice price.

Price is the consideration (cash, note, barter, etc.) paid to a seller to acquire an asset.  Sellers receive price. Value is the benefit received by the buyer from the use and ownership of the acquired asset.  Buyers receive value.

I illustrate this point by asking buyers to consider four similar practices:

Practice A grosses $400,000 and is priced at $275,000.  All too frequently, buyers zero in on price as the primary practice purchase issue while ignoring the issue of value.  However, buyers stand to benefit much more by receiving high value than by paying a low price, since the primary practice value is the net income the buyer takes home from the purchased practice.  I ask buyers if this is a good deal. Most buyers admit they do not know.

Then, we look at Practice B, which grosses $400,000, of which the hygienist produces $100,000 and the seller produces $300,000. After paying all the overhead expenses and all of the purchase payments, the buyer will have a net income of $140,000. Without even knowing the price, most buyers believe that Practice B is a good opportunity.  Knowing the price and gross alone does not make for a well-informed decision.  Knowing the cash-flow derived value, or net income, received in return for work performed by the buyer, does allow for a well-informed decision.

Consider Practice C, which grosses $400,000 and is priced at $300,000. After paying all of the practice-overhead expenses and all of the purchase payments, the buyer will receive value, or net income, of $150,000.  Now examine Practice D, which is very similar to Practice C.  It also grosses $400,000 but is priced at $250,000.  After paying all the practice-overhead expenses and purchase payments, the buyer will receive value, or net income, of only $125,000.

This comparison shows that it is possible to pay a higher price for a practice and still receive more value, or net income.  Differences in fixed expenses, such as rental cost, can cause such differences. Which practice would you choose?

While we do not suggest overpaying for any practice, we do point out the old saying, “You get what you pay for.”  Since “what you pay for” is net income in the case of dental practices, higher-priced practices generally will yield higher net incomes, even after making the payments. In the case of purchasing a practice, it often is safer to pay slightly too much than too little.

We strongly suggest that if you are considering buying a practice and are seeking professional advice on price, be sure that you also receive a practice cash-flow analysis to learn all of the important facts — especially the answers about practice value, the net income you will earn.