Author: omniadmin

So you want to sell or transition out of your office.  What can you expect?  There’s a big difference out there between expectations and reality.  When I do dentist office transitions or sales in Washington or Oregon, the selling dentist sometimes likes to work back.  That’s a great thought and I’ve seen it work.  But, more often than not, I’ve seen a disgruntled buyer, disgruntled seller, or both.

What often happens in a dentist office transition where the seller works back, is that the staff still views the selling dentist as the boss.  What he says still goes.  The selling dentist oftentimes still views himself as the managing dentist or at least the expert in running a practice.  That may or may not be the case.   The buying dentist is left as the outsider looking in.

So, what do you do to have a successful dental office sale or transition?  Communication is the key.  The sooner and more often the two sides get together the better.  If the buyer is envisioning the practice being run one way and the seller thinks things will continue as usual, there’s going to be a problem.  Everyone needs to be on the same page as to how staff management is going to happen, how marketing will happen, who gets the new patients, etc.,  After that’s done, get the attorneys together and put it in writing.  If everyone communicates upfront and everything’s in writing and agreed to, you’ll have a better chance of having a happy ending.

Call us for a free consultation on how to make sure your dental office transition or sale is a happy one. 877-866-6053

Your Brand is showing! No, not your underwear brand, your practice brand.

A brand is everything about your practice. From the look, feel, sound, smell, texture, color, to your voice, answering the phone, etc. You go to your office every day and probably get complacent about your brand. Spring is a great time to clean up your brand. You can start outside.  Is your parking lot clean and freshly striped? Is your landscaping clean and professional? Enter your office.  What are the sounds, smells, colors, paintings – everything you sense? How does the front desk answer the phone? Is it cold in the office? Are there cracks in the paint? Are your paintings from 1972? Are your windows clean? Continue through the practice as if you are the patient. Are the bathrooms kept cleaned and monitored throughout the day?

Put together a checklist and have your staff do the same exercise. Your brand gives out a perception of your dentistry. A dated practice = perceived dated/tired dentistry.

Time for spring cleaning!

When buying a practice one of the most critical numbers to look at is the number of active patients.  Active patients are typically defined as the number of patients seen in the past 12 to 24 months.  Most brokers use 24 months, but I like to use 18 months in my definition.  When I ask a selling doctor how many active patients they have, I typically get either an “I don’t know”, or a number that is astronomically high.  I’ve had dentists producing $300,000 per year tell me they have 5,000 active patients.

So, how do you get the real number of active patients?There are a couple of ways to get close to the number of active patients.
1.      You can take a day and go through each chart or the patient files on the computer to see when they were in last.  If they have been in the last 18 months, that counts as an active patient.  This would take you a long time.
2.       You can also do an estimation. For a medium-size practice ($400,000 to $500,000 in annual production), you can pull a hundred charts.  You can go through the charts to see which have been in the past 18 months.  You can then divide that number by the percentage of charts you pulled.  If you pulled 10% of the charts, divide by 10%.
3.       A third method and much quicker is to look at the number of recall appointments for the year.   Divide that number by two and that will give you the number of active patients.
4.       The fourth method is to take take the average number of hygiene patients seen per day.  Multiply that by the number of hygiene days per month and then multiply that by six months.

The number of active patients makes or breaks your practice.  Be sure and have confidence in that number.  If you think you are buying a practice with 2,000 active charts when there are only 500, you will have overpaid for your practice.  Spend the time to figure out the active patient number in your due diligence.

Often times I hear of dentists holding off on practice transitions.  They’re in their late 60’s, early 70’s, and even in their 80’s.  They either think they don’t have enough money to retire, or they simply enjoy dentistry.

In many cases, those who have sold and worked back for the buyer found an associate position or volunteered at a clinic and found a more rewarding and less stressful life.  They have no management or financial responsibility and can usually work when they want to.

So, if you’re holding on to your practice “for the fun of it”, look around you.  There’s more fun to be had when you have less responsibility and risk.  Call me and I’ll help you develop a practice transition plan.

 

• Minimum of 3 years Tax Returns and Financial Statements
• Minimum of most recent 3 years annual productions, collections, and adjustments
• Most recent production by procedure code report
• Fee Schedule
• Patient demographic information
• Accounts receivable and insurance receivable aging
• Employee census information
• Copy of the lease
• List of included equipment and furniture
• Outstanding treatment plan report

Now that you have these reports, it’s essential you understand what they mean.  If you don’t know how to read financial statements or tax returns, be sure you have a knowledgeable OMNI accountant on your team.  If you need help with the practice management reports, hire a consultant or third-party practice broker, like myself and my OMNI colleagues.  We can help you evaluate the practice.

In the long run, hiring OMNI experts to evaluate the reports will more than pay off.