How to Get Started with a Plan for Retirement
How does the sale of your dental practice fit into your retirement plan? Kevin Brady, Certified Broker at OMNI, explains how to get started to best maximize the value of your practice.
Read MoreExit Planning in the COVID Era
By Are you ready to transition?
Is your practice ready to transition?
What is the market like?
These are all key questions to ask yourself. When is a good time to start thinking about all of this? The real answer is as soon as you buy or start your practice, but the more practical answer is dependent on you. If there any chance you will want to transition in the next five years, you should start working on your transition today.
Personal readiness and practice readiness are both more important than current market conditions; however, considering the COVID crisis, I am going to focus on market timing.
If any of the following sounds even slightly familiar, raise your hand:
I was ready personally, and my practice was ready in August 2019. I choose to wait because (pick one or more):
- I have a kid with one year left in college
- I have one year until I can draw Medicare
- There is one more room in the house I would like to finish
- My spouse retires in a year
- I pay off my house in a year
- I turn (insert round number like 60 or 70) next year and I would like to wait until then
- Etc. …
Now, for those of you that raised your hand, consider the reality of August 2020. How does that August 2019 decision to wait look? Questionable at best.
My intent is not to beat up on those of you that this struck a chord. Rather, I want to emphasize the need for starting early and getting help.
Transitioning is a difficult process. Do not go it alone. Contact an experienced, qualified transition specialist and get the ball rolling. We are here to help.
Do you have more questions? Attend our Practice Transition webinar on Thursday, 10/1 at 6pm ET/ 3pm PT, presented by Corey Young, DDS, MBA, and Katie Collins, CFP. Reserve your spot today at omni-pg.com/register.
Read MoreThe 4 P’s of Your Dental Practice: Performance, Productivity, Profitability, and Patients
By Kevin Brady, OMNI Practice Group
All dentists want a practice with high performance, productivity, and profitability. These three P’s represent the standard by which successful dental practices are measured. There is, however, another “P” that many dentists forget, which is arguably the most important – Patients.
Happy patients lead to positive outcomes and accelerate the other Ps. Enhancing customer service and public relations are vital to running a thriving dental practice. To accomplish this requires dentists to devote more time to patients and provide them with what they need to complete their treatment recommendations. By incorporating current, proven, safe, and secure technology into the dental practice, staff can focus more on patient care.
Performance indicators The recall program is the performance enhancement engine of most dental practices. When patients commit to and show up for regular recall appointments, dentists can diagnose potential issues early. These appointments allow time for patients to express their concerns and discuss what needs to be addressed with their teeth. In order to have an effective recall program, the practice needs a good hygiene program to encourage patients to return at six-month intervals. This means the practice has enough staff to see both recall patients and those coming in for more time-consuming dental treatment.
If the one-on-one time with the staff decreases, performance may suffer, and patients may become uneasy about accepting the recommended treatment that was not effectively explained to them. Enhancing patient communication internally and externally during this pandemic time will help to ease patient fears and build trust with being treated at the practice.
Productivity indicators A full patient schedule, along with healthy collections, is indicative of high productivity. In fact, according to the ADA’s Practical Guide to Expert Business Strategies, “Controlling the schedule requires constant vigilance, commitment, and training. It is the foundation for the success of the entire practice. (Ref 1) It takes valuable staff time to maintain this schedule and work with patients and insurance companies to collect payment. When staff is concentrating on reminding patients about appointments, preparing monthly invoices, and communicating with insurance companies, they are not focused on patient treatment and business-building tasks.
Here are several signs that the practice is busy, but not productive:
- The main objective is to keep the schedule full rather than focused on patient care.
- Both the hygiene and dentist schedules are booked for weeks or even months, forcing patients to wait long periods of time for even routine procedures.
- There is no consistency in the procedure schedule—patients are booked for 30, 60, or even 90 minutes.
- Staff skips lunch breaks to catch up.
- There is low patient retention.
- Revenues are flat. (Ref 1)
Using or adding technology can help staff maintain a full patient schedule through automated email, text, mail, and phone call reminders to help patients with their appointments. These software programs also provide practices with essential statistics, such as appointed and completed versus missed appointments, to increase productivity.
Another productivity indicator is the number of patient referrals. Satisfied patients refer others to the practice. Happy patients believe the staff truly cares about their dental care and goes the extra mile explaining treatment options. Happy patients = more referrals! (Ref 1)
Poor performing dental practices experience a myriad of problems. For instance, there may be staff issues that lead to high turnover. High turnover results in reduced efficiencies within the practice since dentists spend more time training new employees and less time with their patients. Patients notice the constant staff changes and increased waiting time.
To have a high performing, productive, and profitable dental practice, focus on the fourth “P”—patients. The solution is having your staff focus on practice building work and less time on busywork that can be automated.
Omni Practice Group has been helping dentists for over 15 years to maximize the value of the practice and provide smooth transitions for dentists as they retire.
References 1. American Dental Association (ADA). The ADA Practical Guide to Expert Business Strategies: Advice from Top Dental Consultants. 2014.
Read MoreEffectively Managing and Maximizing the Value of your Practice
By Kevin Brady, OMNI Practice Group
Dental Practice owners know, there’s a lot more to running the business than treating patients.
Owners are responsible for hiring and managing staff, billing patients and insurance companies, handling accounts payable and receivable, and becoming proficient on dental software to operate the practice.
All these duties have a negative impact on both the time dentists are available to their patients and the profitability of the practice.
Practice Demands
It’s no secret that dentists face increasing constraints on their time. This means providing high-quality care for their patients, which entails creating treatment plans and participating in continuing education to keep abreast of the latest innovations in dentistry.
At the same time, the dentist needs to be CEOs of their practice. In this capacity, they are tasked with:
-Hiring, training, firing, and managing staff
-Marketing the practice
-Understanding insurance changes and HIPAA regulations
-Managing the billing, collections, and account payables/receivable processes
-Ensuring the office is running smoothly
-Maintaining and enhancing office technology
-Dealing with economic conditions affecting the bottom line of the practice
A lot of dentists come out of school dreaming about doing dentistry and they become disillusioned after a short time learning that not only do they perform dentistry, they have to run a business. When a dentist is overwhelmed with the business aspects of their practice, it is time to seek help.
Outsourcing
Employing third parties to help with the daily business aspects can allow dentists to focus more on their core competencies to enrich patient care. Dentists have many choices when seeking advice and outsourcing partners. Most major software companies have additional services to help with outsourcing patient billing and insurance billing, which allows the office to go paperless. Enhancing the Billing/Collections and freeing up doctor and staff time allows the practice to be more productive and profitable.
Marketing
Developing a Marketing plan is important in building a sustainable practice over time. The ADA says a good rule of thumb when budgeting for marketing expenses is to allow 3-6% of a new practice’s expenses; 2-3% for mature practices; and about 4% for practices that are in the middle. A start-up practice should plan to spend about $40,000 on marketing during the first year, with those costs incorporated into the overall practice financing.
Internal marketing is the least expensive way to build and maintain existing patients and generate new patients. Practices that successfully connect with patients have the best marketing vehicle available – positive word of mouth that current patients share with families, friends, and coworkers that generate new patients for little or no cost.
Having a website that connects the practice with your ideal patient is critical to keeping existing patients and generating new patients. Once you have a branded site, make sure you continue to enhance it with Search Engine Optimization – (SEO). Keeping up with SEO will increase the quality and increase the visibility of the website to internet search engines.
Making sure you have the right branding and marketing strategies designed to endure the current market conditions and changes are critical for the practice to compete with larger corporate dentistry groups.
Practice Transitions – Buying or Selling a Practice
Just as dentistry is a profession that is highly trained and practiced, so are the professional services recommended for selling and buying a practice. A dentist that is looking to sell or buy a practice should seek professional help. Selling or buying a practice can have very complex processes and numerous legal, financial, and tax implications.
OMNI Practice Group is one of the experts in the industry helping dentists with developing plans for adding associates, developing transitions plans, and selling or buying a dental practice and real estate.
Omni provides:
-Practice Appraisals
-Web Practice Listing Services
-Marketing and Listing services
-Practice Real Estate and Lease services
-Banking Referral Options
Being a Dentist/CEO can present a lot of challenges with operating a dental practice in today’s market. Using the right partners can help improve efficiencies, generate new patients, and increase the value of the practice.
Contact us today for a no-obligation consultation with one of our expert Practice Transition Advisors.
Click here to connect with Kevin on LinkedIn!
Read MoreBiggest Decisions Dentists Will Have to Make
By Kevin Brady, OMNI Practice Group
As a dentist, you worked hard to build a successful dental practice. This has often meant putting in long hours, dealing with staff turnover, insurance hassles, ongoing CE requirements, and economic issues. Everything about the practice has been on your shoulders, along with having a good life balance outside the practice. Then comes that day when you want to transition the practice and retire.
Transitioning the practice is probably one of the biggest decisions a dentist will make in their career. Deciding on whether to transition the practice to a partner, associate, a new dentist, or corporate dentistry, you will need expert help to make the right decision.
Developing a plan
Having a plan that is 6-8 years out from transitioning the practice will allow you to maximize the fruits of your labor. Most dentists should consult experienced and reputable practice transition advisors who specialize in dental practice transactions. Having the practice transition consultant explain the practice valuation process can show you your practice’s true worth. This will allow you to develop a plan that meets with your goals of when you want to transition the practice and what you want the practice to be worth. This will allow the practice transition consultant to advise you on possible strategies to maintain or increase the value of the practice, ensuring that your practice is ready to transition when you are. Many dentists wait “too long” to develop a plan and make decisions to slow down as they get closer to a retirement date or they may add new overhead or make other business decisions that could have a huge negative impact on the value of the practice.
Consider all possible options
Developing a plan early will allow you to compare different possible options to transition the practice. Explore all the different options with your practice transition advisor and pick the one that is right for you and your professional reputation and legacy.
Finding the right buyer
Finding the right buyer that is financially qualified to buy the practice is the most important process of the transition process. Working with your practice transition advisor and their banking partners will allow you to identify the most qualified candidates to negotiate a final deal. Using an expert practice transition advisor will help to maximize the value of your practice and make for a smooth transition.
Finalizing the deal
Once you have a qualified buyer and an offer for the practice, the offer must be reviewed with your attorney and accountant before you accept to make sure that you are protected and know the tax implication of the sale. This will provide you with expert guidance that all your personal financial affairs are in order and you are sufficiently funded for your retirement.
Transitioning of the practice
Developing a transition plan with your transition practice advisor and the new buyer is critical for a smooth transition. A plan must be in place to ensure patients and staff retention. Most dental practice transitions require a transition time commitment from the seller. Make sure you work with your transition practice advisor to identify a time commitment that fits with your exit time frames. This transition time frame is an essential process in providing the buyer with a comprehensive understanding of the day to day operations of your practice.
Practice Transitions Buying or Selling a practice
If you are thinking about transitioning your practice now or within 8 years, you should seek professional help. Selling or buying a practice can have complex processes and numerous legal, financial, and tax implications.
OMNI Practice Group is one of the experts in the industry helping dentists for over 15 years, with developing plans for adding associates, developing transition plans, and selling or buying a dental practice and real estate.
Omni provides:
- Practice Appraisals
- Web Practice Listing Services
- Marketing and Listing services
- Practice Real Estate and Lease services
- Banking Referral Options
Patients seek out their dentist professionals for help when they need it, dentists should also seek out the use of experts in assisting them with all their transitioning needs.
Contact us today for a no-obligation consultation with one of our expert Practice Transition Advisors.
Click here to connect with Kevin on LinkedIn!
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