Becoming a dentist did not just happen out of circumstance. You had to take the first step in realizing your goal. The four years of dental school took tremendous drive, dedication and dollars. But you got through it. Boards were passed, and now you are a licensed dentist. Now, you have been practicing in the “real world” as an associate dentist for a few months, maybe a few years. Maybe you work for a solo practitioner. Maybe you work for a corporate dental practice. Undoubtedly you have spent time envisioning what your practice career will look like. What is your next goal? Do you want to work alone or with a small group? Is your only option to work for corporate dentistry? What other options do you have? Despite what you may have heard to the contrary, private dental practices are alive and well. For many of you, there may not be a better time for you to take this first step towards practice ownership than NOW!Read More
For many doctors, owning their own practice is the ultimate achievement. Ownership allows you to set your own hours, decide the scope of your practice and maximize your earning potential. With all that to gain, the prospects of buying a practice can still be both exciting and overwhelming. What can you do now to make your dream a reality?Read More
There are several ways in which dentists can grow their practices. Some of these methods range from expensive marketing campaigns to expanding services or products offered to patients. Although these methods may prove to be effective, we have found that the best and most profitable way to grow a practice is a “practice merger”.
In essence a practice merger entails the complete movement of a seller’s practice into a buyer’s facility. Even though these practice mergers can be extremely beneficial to both parties, there are certain fundamental elements that should be in place in order to maximize the benefits of a practice merger.
First, the buying doctor must have a facility that can accommodate the additional patients and/or dentist. Secondly, the purchasing dentist must have the personnel and ambition to accommodate the additional patients being acquired.
From the selling doctor’s perspective, it is best when the selling doctor is without a lease or on a short-term lease obligation. In addition, if the selling doctor’s equipment has little or no value, it is not detrimental since the acquiring doctor is not necessarily interested in the “hard assets”. (Nevertheless, even if the selling doctor’s equipment for the most part is ultimately discarded by the buyer, the buyer may be able to deduct the “allocated value” of the discarded equipment). Finally, the two practices need to be “fairly proximate” to one another since the goal is to have the selling doctor’s patients end up at the buying doctor’s office.Read More
The dental profession is not exempt from unexpected death or disability. What makes these unfortunate events even more tragic is when a doctor is unprepared. This article does not address the proper practice transition under death or disability, but focuses on how a complete estate plan will assure your wealth preservation for you and your loved ones.
For most dentists a good estate plan will frequently consist of a Will, Power of Attorney, Health Care Directive, and possibly a Revocable Trust (this list is certainly not comprehensive). Nevertheless, you should consult with your own estate planning attorney to be sure that your particular situation is addressed and state law is considered.
WILL. A Will allows you to designate where your assets go, who shall take care of any minor children, who shall administer your estate, establish testamentary trusts, and engage in complicated estate tax planning. Without a Will, state law determines who gets your assets, who takes care of your children, and who administers your estate. Moreover, if you allow the state rules to apply without estate tax planning, it may cost millions of dollars in estate taxes.Read More
(Please note, the following is not intended to be a legal opinion nor address other legal issues that might arise in the case of a marriage dissolution. Typically divorce law is governed by state statute and state legal precedence. Accordingly, one should seek competent legal advice from an attorney familiar with marriage dissolution matters).
There is a joke circulating as a result of our most recent economic turmoil, which goes, “the economic meltdown is worse than a divorce. My net worth has been cut in half, but I’m still married to my spouse”.
Although this may give a chuckle to some, the unfortunate circumstances of a marriage dissolution most undoubtedly causes significant economic and emotional damage to a doctor. Usually in marriage dissolution, there are many issues that arise; however the two most significant economic issues involve spousal maintenance (commonly referred to as alimony), and property settlement.Read More
Shakespeare’s Hamlet pondered, “To be or not to be, that is the question…” Likewise, many dentists considering the sale of their practice ponder, “to sell or not to sell”. Unfortunately the answer to this question is oftentimes not self-evident. Accordingly, when I (or other American Dental Sales brokers) are asked, “Do you think it’s the right time for me to sell?”, we typically advise the doctor to answer two fundamental questions:
ARE YOU FINANCIALLY READY TO SELL? Today more than ever, dental practices are very profitable for the owner/operator. Twenty to twenty-five years ago, an average dental practice would have revenues of $180,000 to $200,000. Currently it is not uncommon to encounter practices with $1M or more in annual revenues. Best of all, during those intervening twenty years, the overhead percentage has remained relatively constant (approximately 60%). Naturally 40% profit on $1M is much greater than a 40% profit on $200,000. Unfortunately the value of dental practices has not kept pace with their growth in relative terms. In other words, the sale of your practice will not replace the earnings if you continue to own and operate your practice.Read More
There is nothing more comforting than knowing that everything is going to be all right. Whether it’s a small child with their favorite teddy bear or your insurance being in “good hands”, the knowledge that a project will be handled properly gives one peace of mind.
The same is true of a practice broker. When a doctor hires a broker to handle the sale of his/her practice, the selling doctor must have ultimate confidence in that the practice broker will handle all the details ethically and capably. The two broad criteria I would recommend for hiring a practice broker are: (1) the broker must be competent; and (2) the broker must be honest.
Although a broker may be honest, if they don’t have the degree of experience and expertise necessary to handle your transaction, your practice sale might be fraught with mistakes, stress and failure. A capable practice transition specialist must be well versed in a variety of different areas, such as: (1) proper appraisal methods; (2) fair and effective sales techniques; (3) in depth knowledge of the legal and tax implications incidental to the practice sale. Overall, your practice broker must have good business judgment that they can apply to your practice transition.
Some questions you can ask your practice broker in order to ascertain their competency are:Read More
For a doctor contemplating the sale of all or part of his/her dental practice, it is often enticing to attempt to sell the practice on their own. The transaction may seem simple enough; should be quick and easy; save a few bucks because you don’t have to pay a broker’s commission. Smart…right?? Not necessarily. It may be the worst mistake you ever make.
Please examine a few of the reasons why you should utilize a broker in the sale of your practice, and you will see why retaining a broker will actually make you money:Read More
1.You earn MORE MONEY! The vast majority of dental practice owners have a greater net
income than dentists who work for someone else.
2. You can build the practice of your dreams. Unlike working for someone else (in which you work under the conditions established by the owner), you can build the practice of your dreams. This means you can adopt the type of facility you want, practice philosophy and a schedule that is desirable for you.
3. You are your own boss. When you own your own practice, you have the unique ability to control what happens in your practice.Read More
- A comprehensive practice appraisal within a reasonable time of the associate’s start date.
- A thorough plan regarding the buy-in, including the beginning, middle and end of the buy-in relationship.