Author: omniadmin

As we all close out on 2017 we reflect on the year’s accomplishments and successes.  For Omni, we had a record year helping doctors buy existing practices finding new locations for their startup practices.  This enabled us to give to various dental related charities and also towards our annual Thanksgiving Basket Brigade.  We helped feed over 1,000 people at Thanksgiving time.
How about you?  How did you do compared to your goals?  Was one of your goals that you missed to own or startup a practice?
We can help you with accomplishing that goal in 2018.  Here are some steps that will help you check this one off the list by the end of 2018:

1. Decide if you want to do a startup practice or look for an existing practice.   My advice is to first look to see if there is a practice available in the location you desire.  If there is not and you have exhausted your research, consider a startup.  Do demographic research to make sure there is room for another location.  Contact us and we can help with your research.
2. If you want to buy an existing practice, get the word out.   Contact all of the brokers to make sure you are on their mailing list and let them know you are actively looking and want to buy a practice in 2018.
3. Contact a bank that specializes in financing practices.  If you need a list of a few, let us know and we can hook you up with a bank that will do a good job for you.
4. Don’t be a tire kicker.  The likelihood of finding a perfect practice located on the busiest corner property in a stand-alone building with a huge sign, hygiene at 30% of production or higher, annual collections over $1 million, staff that is paid below market wages, brand new equipment, fully digital with a cone beam and a CEREC, and a patient base that needs a ton of work with a price of 60% collections is zero.  So, don’t waste your banker’s, spouse’s, consultant’s, broker’s or your own time by continually looking for the unicorn of a practice – it doesn’t exist.  Instead, look for a practice that fits most of what you desire, but if it doesn’t have everything, you can put some work into it and make it a good practice.
5. When you find a practice you like, don’t low-ball the offer.  If you have looked at a few practices, you know what the price should be.  Brokers should be pricing the practices they list at the market price.  Yes, you can offer a little lower if you feel you need to negotiate the price.   But, if a practice price is at $500,000 and it’s a good practice, don’t go offering $200,000 because you’re trying to get the best deal possible.  The seller will be offended and tell the broker to not entertain anymore offers from you as a buyer.
6. Buy the real estate if it’s available for sale.  With interest rates where they are right now, it makes sense to lock in at a low rate versus paying rent with a 3% increase every year.   Even if you pay slightly above market for the property, it can still make sense, as you own the building and you’re not throwing money down the toilet by paying rent.
7. Once you have made the offer, continue to push towards the closing and do your work.  Complete your due diligence in the practice.  Hire a consultant to help you if needed.  Continue to work with your bank to get them everything they need.
8. Upon closing, keep the practice the way it’s been running if it’s being run well, and don’t make too many changes in the beginning.  Let the patients see you a few times before you make drastic changes.  If it’s a dog of a practice, yes, make changes; but if it’s doing well, why change what’s not broken?
9. Work hard and be present.  As soon as you can, quit your associate job and be in the office as much as you can.  Chip in and help the staff if it’s slow.   Call patients yourself to get them in the door.  Do what you need to do in order to be successful.

All too often, we see doctors who want to be practice owners, but they just can’t seem to pull the trigger.  They can find something wrong and a reason not to buy any practice that is shown to them.   We want you to be immensely successful in your practice and are here to help you in any way we can.
We wish you a Happy New Year and cheers to much success in 2018!

Seattle MidWinter Practice Transitions Seminar
Friday, February 2, 2018
The Bellevue Club, Bellevue, WAProgram Description:
In this course, you will learn about the legal, financial, logistical, and emotional aspects of transitioning out of your full-time dental practice. Our team of experts will lecture and conduct Q&A sessions on:

• Sequence of a Dental Practice Transition for Both Buyers and Sellers
• How to Maximize the Value of Your Practice
• The Importance of the Allocation of Assests in the Practice Sale for Both Buyers and Sellers
• Advanced Tax & Financial Planning Strategies Before, During, and After Transition for Both Buyers and Sellers
• Legal Issues in Practice Transition for Both Buyers and Sellers
• Helping your Buyer Get Bank Financing
• Real Estate Issues in a Practice Transition

For only $295, you and your spouse will attend a seminar on Friday including: continental breakfast, lunch and other relevant materials that may be provided.

Schedule:
7:30am Check-In with Hosted Breakfast
8:00am Sequence of Dental Practice Transition
Buck Reasor, DMD – Practice Transition Broker
8:50am Legal Issues in Practice Transitions
Doug Alexander, Attorney
9:40am Advanced Tax & Financial Planning Strategies
Doug Fettig CPA, MBA
10:30am Trends in Dentistry: The good, the bad and the ugly
Rod Johnston, MBA, CMA – Practice Transition Broker
11:30am Helping Your Buyer Get Bank Financing
Andrew McKechnie, SVP/Regoinal Manger, Columbia Bank
12:00am Online Marketing and Communication Strategies to Grow Your Practice
Stewart Bartlett, Senior Marketing Consultant, WEO Media
12:30pm Lunch
1:30pm to 5:00pm Roundtable Group Symposium

In case of cancellation by registrant, refunds will be made if received no later than three weeks prior to program date

For overnight accommodations, please call Hotel Bellevue at 425-454-4424. 

The Hotel Bellevue and the Bellevue Club are located at 11200 Southeast Sixth Street, Bellevue, WA 98004.

Friday, January 26, 2018
Multnomah Athletic Club, Portland, ORProgram Description:In this course, you will learn about the legal, financial, logistical, and emotional aspects of transitioning out of your full-time dental practice. Our team of experts will lecture and conduct Q&A sessions on:

• Sequence of a Dental Practice Transition for Both Buyers and Sellers
• How to Maximize the Value of Your Practice
• The Importance of the Allocation of Assests in the Practice Sale for Both Buyers and Sellers
• Advanced Tax & Financial Planning Strategies Before, During, and After Transition for Both Buyers and Sellers
• Legal Issues in Practice Transition for Both Buyers and Sellers
• Helping your Buyer Get Bank Financing
• Real Estate Issues in a Practice Transition

Schedule:
7:30am Check-In with Hosted Breakfast
8:00am Sequence of Dental Practice Transition
Buck Reasor, DMD – Practice Transition Broker
8:50am Legal Issues in Practice Transitions
Doug Alexander, Attorney
9:40am Advanced Tax & Financial Planning Strategies
Doug Fettig CPA, MBA
10:30am Trends in Dentistry: The good, the bad and the ugly
Rod Johnston, MBA, CMA – Practice Transition Broker
11:30am Helping Your Buyer Get Bank Financing
Chris Kane, Commercial Banking Manager
12:00am Online Marketing and Communication Strategies to Grow Your Practice
Ian McNickle, MBA Partner and Co-founder, WEO Media
12:30pmLunch
1:30pm to 5:00pm Roundtable Group Symposium

Cost to Attend:For only $295, you and your spouse will attend a seminar on Friday
including: continental breakfast, lunch and other relevant materials
that may be provided.

In case of cancellation by registrant, refunds will be made if received no later than three weeks prior to program date

The holidays are an interesting time of year.  Whether you celebrate Christmas, Hanukah, Kwanzaa, Rohatsu (look it up) or another holiday, we all are wrapping up the current year and beginning to think about the new year on or before January 1.  You may have a process or a traditional way of doing this.  Reviewing your 2017 goals versus what you actually accomplished and then setting new goals for 2018 is a typical way of viewing things.
As I look back at 2017, I go through the names of the doctors whose practices I sold and understand a bit more about them.  I look at the doctors’ names of the practices and, amongst other things, I think about why they sold their practices.  I see names of doctors who sold their practice because they are ready to retire – this is the typical reason for selling.  But I also see the names of doctors who sold their practice because they were diagnosed with cancer and could no longer practice.  I sold four such doctors’ practices this past year.  I also see the names of two doctors, both under the age of 42 who were planning to practice dentistry into retirement, whose practices I sold because they got nerve damage in their hands and wrists.  There are also several doctors who sold because they were tired of managing a practice – dealing with insurance companies, staff management and managing their landlords.
Not long ago, I had a conversation with two doctors in their late fifties who both had recent health scares and had family members and friends who passed away from cancer at early ages.  This hit home as my Dad passed away in July of 2017 from non-Hodgkin’s lymphoma and my brother was just diagnosed with pancreatic cancer.  And as these doctors ask me questions about selling their practices, I remind them that just because you sell does not mean you’re done with dentistry.  You can still work as an associate dentist in another practice, teach at the dental school, or volunteer at a clinic.  I let them know that I’ve never had a dentist tell me that they sold too early.  In fact, many have come back and said I wish I would have sold several years ago because they are loving their freedom of being able to come and go as they please, fill in for vacationing friends, or work in a clinic when they get the itch to do dentistry.
As you celebrate your holidays, try not to think too much about work.  Also, as you set your goals for 2018 and do an assessment of your career and life, don’t forget to think about what’s important to you.  For some, it may be that dentistry takes priority over everything and it’s your passion.   For others, maybe it’s time to turn to the next chapter and enjoy what you have – family, friends, time, giving back, etc. Whatever direction you go, know that we are here for you and happy to provide a free consultation anytime you would like.  We’ll even buy the coffee!
OMNI would like to wish you and your family Merry Christmas, Happy Hanukkah, Kwanza yen iwe ha heri, Happy Rohatsu, and CHEERS to the New Year and best wishes for everything you desire in 2018!

I’m sure many of you have sold a car, boat, or a house by yourself.  For the most part, cars and boats are pretty simple to sell. Even selling a house only involves a couple of pieces of paper, an escrow agent, and a few other steps.  But selling your practice is another ballgame.  Emotions get involved as you are attached to your patients, staff, and heck, you built this baby!  There is a valuation to do – how do you do that?  Additionally, there is due diligence, lease assignment, document preparation, letter of intent, renegotiating after due diligence, closing process, CPA’s and on and on.  It’s hundreds of hours of doing a lot of different things.

ARE YOU READY?
You might be saying, “This practice has been my baby and my life for many years,” Or, “I still want to treat patients a couple of days a week after I sell my practice.” Before you make any decisions, ask yourself some questions:

1. Am I emotionally and financially ready to step away from the practice where I’ve invested so much of my time and resources?
2. What do I want to do after I sell? Will I retire from dentistry, work part-time, or volunteer my services?
3. How do I want to sell my practice? For example, should I sell to an associate and immediately retire, or should I transition to another dentist and gradually step aside?  Should I sell to a corporate?

It’s understandable you want to preserve your practice legacy while ensuring the ongoing care of your patients and staff meets your high standards. That’s why it’s important you find the right buyer to entrust your “baby.” It’s one thing to be financially prepared for retirement. It’s a whole other ballgame to emotionally handle walking away from your practice.

READY, SET… GO!
After taking stock of your personal finances, retirement, and practice transition goals, it’s time to call in the experts to help you prepare for the sale. Your team of professionals should include a CPA, wealth management advisor, practice transition specialist, and an attorney.

Certified Public Accountant (CPA): A CPA will compile and review all your financials. Be upfront about anything that might be considered outside the normal scope of dental practice business, i.e., expenses above industry averages, any non-cash benefits, or family members on the payroll who don’t work in the office. This allows your CPA to do a thorough analysis and advise any necessary adjustments.

Wealth management advisor: The sale of your practice could be the single biggest contribution to your retirement fund. Consult an expert wealth management advisor to help you plan for any related tax consequences and long-term investment strategies.

Practice transition specialist: A good practice transition specialist will review market prices in your area, establish a practice sale timeline, conduct a comprehensive practice analysis, and have a pool of financially viable buyers. Get recommendations from colleagues and interview each one to find the best match for your needs.

Attorney: Attorneys provide much-needed protection and attention to practice sale transaction details. Due diligence and sound legal advice benefits you, your practice transition specialist, and the buyer. Find an attorney who is well-versed in dental practice transitions. This will save you time and money, and potentially add tens of thousands of dollars to the purchase price of your practice.

FINANCIAL PREPAREDNESS
Be sure to have all of your financial statements in order to accurately show the fiscal health of your practice. Make sure you prepare and review monthly and quarterly profit and loss statements with your accountant. If you have not done that, start doing so immediately. Review each line item to manage revenue fluctuations, expenses, and ancillary accounting issues.

The ADA, a member of the Academy of Dental CPAs, or a transition specialist can give you current industry averages for revenues, expenses, new patient flow, fee schedules, and much more.

Buyers will look at your profit and loss statements to compare each line item to industry averages. Make sure your CPA explains any noted differences upfront, otherwise you could lose significant value to your practice. It also puts to question the integrity of your practice financial information.

Due diligence: Potential buyers will want to review your production against industry averages. Carefully analyze the following key reports generated by your practice management system:

Provider summary report: This report actualizes productivity by provider and type of procedure. When reviewing this report, make sure your hygiene production numbers are within industry averages. Also, if you offer specialties such as orthodontics or sleep apnea, you need to make sure any potential buyer can replicate those procedures. If they can’t, it could negatively impact the purchase price of your practice because that revenue would be deducted from the valuation.

Accounts receivable report: Buyers pay close attention to the percentage of receivables based on the delinquency bucket. Be forewarned: most buyers will not pay for balances over 90 days. Large account receivable balances are a red flag for any potential buyer. It usually signifies a lack of controls for effective practice collections and cash flow management. Carefully analyze each account and make necessary adjustments to non-collectables.

Fee schedules: Review your current fee schedule and adjust fees to the minimum 80th percentile for your area.

FINAL INSIGHTS

• Carefully vet all potential buyers. If they don’t have a clear understanding of the market and how it relates to the value of your practice, move on.
• Establish relationships with industry professionals. Their expertise and support will be an invaluable resource.
• Determine a specific date of sale with a realistic timeline. Communicate clearly when you want to stop practicing dentistry.
• Plan early and anticipate delays. Your location, mix of procedures, and practice revenue trends can impact the pace of your practice sale.