By Megan Urban, Practice Transition Consultant, Omni Practice Group
Dental partnerships can be great or not-so-great. They can include different scenarios: buying a partnership, adding a partner to your existing dental practice, or a start-up partnership. To ensure you have the best outcome, financially and emotionally, you’ll need to consider some important questions.
- Are you friends, relatives, or colleagues with the people whom you are considering entering into a partnership with? Are you convinced you can get along in a work environment?
- How will you resolve disagreements and make decisions regarding advertising, patient care, team management, and acquiring new equipment and technology?
- How will you divide up responsibilities within the practice?
- Is there enough physical space for more than one dentist? Are there enough patients?
- How will you divide up new patients and hygiene exams?
- How are you going to determine compensation, such as 30% of individual collections, then 50% split on all additional income and costs? If one of you performs procedures with much higher lab bills, you may need to consider a lab payment These items will need to be written up by your dental attorney as part of your partnership documents.
- Do your legal documents include specifics on terminating the partnership? You will need to address details regarding non-compete agreements, disability or death, and how to sell a practice when one or both partners are ready.
- Do you know a good dental CPA who can assist you with setting up the entity or entities that make the most sense?
There are many items to consider to ensure that you make the right decision, but we can help make the process go smoothly with the best outcome for all parties. We have guided many dentists through purchasing and selling practices, partnerships, multiple locations, and every size and type of practice. We have the experience and the expertise to help you achieve your goals.Read More
What To Do with Your Practice If You Are Sick Or Dying?
Most of us have a vague notion of what retirement might look like but that’s where our planning usually stops. Getting sick or receiving a terminal diagnosis isn’t something that is easy to think about and is even more difficult to talk about. Nobody wants to contemplate their last moments in this world.
Sadly, we have all witnessed peers who have been thrown a curve ball and had an illness or untimely death. The aftermath of these events places a huge strain on our families. However, these stresses can be lessened with some discussion and at the very least, taking the steps now to get the right people in place when you need them.
An unexpected sickness can occur at the height of our professional careers. Depending on the prognosis, it’s critical to get our affairs in order as quickly as possible. Staff might suspect that something is amiss, and you can ask them to keep health issues confidential.
If you haven’t assembled a team already, start searching for a reputable estate-planning attorney and CPA. Also include the often-overlooked professional; a practice transition broker who can assist with the transition of your practice and can begin the process with you as soon as possible. Most widows/widowers are not thinking that the responsibility of selling the practice will fall on their shoulders. We recommend starting these delicate conversations with your spouse now, so they are not left to deal with this in addition to emotional stress.
If you are still able to work at your practice, we can begin to market the practice heavily but discretely so we can find a buyer as quickly as possible. The best medicine for you is to heal and take care of your family. Selling might seem short-sighted if you expect to make a full recovery, but there are many other options available if you still want to continue to work after you heal.
However, for those doctors who pass unexpectantly, word of mouth tends to get ahead of any marketing and the reality is that your practice will be marketed without a doctor and thus the practice value can decrease substantially. Some of the most difficult challenges that we have encountered are in serving spouses who are left to deal with quickly selling a practice when the doctor is sick or has passed away. The value of the practice drops sharply and is often valued at 30-40% less even after just one month without a doctor.
Prepare for the unexpected. Assemble your professional team and get your estate planning documents in order. Most importantly, make this information accessible and communicate your wishes with your spouse.
Life is short, spend your days doing what you enjoy and take care of your health.
Contact us today for a free consultation.Read More
Benefits of Hiring a Broker
By Kevin Brady
Why use a Dental Broker to Sell your Practice?
After many years of the hard work, long hours, and substantial investment that go into building a dental practice, you’re now thinking about selling the practice. It’s easy to assume that the practice will sell quickly and for a great price when you are ready to sell. Feedback from doctors who have recently sold their practices shows that the process is more complicated and stressful than anticipated. This is why it is essential to hire a dental broker to help guide you through the process.
Potential individual buyers and DSOs (Dental Service Organizations) will have experts who can help them navigate the sale. You will also need someone to advocate for you and help you understand the process from start to finish. In most cases, the last time you were involved in a practice sale was when you bought the practice, which means you need someone to help you navigate the process.
Benefits of Hiring a Broker
Here are just a few reasons why hiring a dental broker to assist with planning and selling your practice would be a sound investment.
- Determining Fair Market Price: At Omni Practice Group, we have certified practice appraisers that put together a valuation to maximize a fair market sales price for the practice and real estate (if applicable).
- Develop a Marketing Plan for the Practice while Maintaining Confidentiality: Omni provides confidential marketing and advertising services for your practice that do not identify you or your practice until a buyer is screened and signs a confidential Non-Disclosure Agreement. Omni also provides the financial prospectus for your practice along with confidential personal showings of the practice to potential buyers. Finding the right buyer that you will want to take over your practice can take some time. Good practices can sell quickly, but some can take months or even a year to sell.
- Letter of Intent: Omni brokers negotiate on your behalf, a Letter of Intent with your approval for the purchase price of the Practice and the Accounts Receivable. Your broker will also guide you through the due diligence conditions for bank financing, help negotiate a new lease agreement, non-compete agreements, and other conditions that both the seller and the buyer will agree on. If real estate is included, your Omni broker will determine the value of the real estate with a “Broker’s Real Estate Opinion” that is used to market the real estate with the practice.
- Finalizing the Sale: Your Omni broker works with you to determine a possible closing date based on whether your practice has real estate to sell or a lease that will be negotiated with the new owner. Omni’s brokers work with attorneys to finalize the Asset Purchase Agreement for both the seller and the buyer.
Omni’s 70-point-plus checklist helps guide both the seller and the buyer through the process of items to be completed prior to the sale closing.
A banker at one of the major banks recently said, “A high percentage of deals that fall apart is due to the seller not using a dental broker.” Using a broker typically saves sellers a lot of time, money, and headaches in selling their practices.
Omni Practice Group has been helping dentists for over 15 years with the planning and transitioning of their practices. If you’re thinking about selling now or in the next few years, give us a call for a “free consultation” to help you determine a plan that works for you and how we can assist with a smooth and profitable transition – 877-866-6053.Read More
10 Tips to Help Make a Workback Successful
Bruce Johnson, DDS, Practice Transition Advisor at Omni Practice Group, has personally been involved with 3 practice sales and workback agreements. In this video, he provides you with 10 tips to help your workback transition be successful.Read More
Buying Another Location
By Megan Urban, Omni Practice Group
It’s very exciting to think about adding a location! Here are some issues to think about before making this big decision.
Why? If it’s to increase collections, maybe you can simply add more days or extended hours at your current location. Verify what your current patient retention is to determine if you need to mine from existing patients. Is there any area nearby that is underserved?
Where? Check your current zip code demographics and determine where most of your patients come from and if it makes sense to market that specific area. Do your due diligence regarding the number of dentists in the areas around you to make a good decision on where you may be more successful.
Will you have current patients going to a new location? You don’t want to add a location only to find that a large number of patients switch to the new location. Some cannibalism is fine, but remember the point is to increase patients/collections, not move them from one location to another.
How will you handle patients going to both offices? Contact your dental software company and have them set up the same system in the new location and set up provider numbers for each location so everyone can see past and diagnosed treatment, as well as health history, AR, etc.
How will you know if both locations are profitable? Work with your CPA to have books that show you numbers for each location as well as together, so that means you will need to post collections, payroll, dental supplies, lab, utilities, etc. per location. Monitor provider production in each location. Are some dentists and hygienists more productive in one location, and if so, why?
Who will work it? If you have a team that wants more hours, that is ideal since they already know the systems and processes you have set up. Be sure to have team members clock in hours to each location as applicable.
Need another dentist? Interviewing is critical to find the right fit. If the associate will be working alone in one of the locations, you will want to do a lot of training, so they understand their role, responsibility with the team, and simply set your expectations, then continue to monitor. Work with your dental attorney to create a job description, employment agreement, compensation, non-compete, etc.
How do I manage multiple locations? Consider hiring a manager that can oversee training, team schedules, and general practice management.
Work with your transition consultant (broker) to assist you! Contact us today.Read More