May 30, 2018

6 Considerations when Starting a Multispecialist Dental Practice

One of the most efficient and profitable ways to grow your general practice is to bring on a specialist or multiple specialists. But before you call every periodontist, orthodontist and pediatric dentist in the phone book, you’ll want to consider the following.

Patient care

With every decision a general practitioner makes, patient care should always be at the top of the list. After all, it’s the reason you got into dentistry and how your business continues to thrive. As the industry continues to move away from solo private-practice specialty providers toward collaborative multispecialist practices, ask yourself: Does this one-stop shop model benefit my patients as much as my staff in terms of need and affordability? While the ability for a patient to get a referral and set up an appointment is certainly convenient, there’s no one-size-fits-all answer.

Patient need

Before merging with a specialist full time, make sure the need is there first in terms of patient load. If not, there are other options. Consider bringing on a specialist a few days a week or month, one who has his or her own practice location or multiple similar arrangements, using your practice as a satellite office while splitting time between multiple practices.

Office space

Does your current practice offer the space necessary to house a specialist and the accompanying equipment, or will expanding warrant a move? Each new specialist has the potential to come with their own assistant and staff, not to mention the need for space to accommodate different equipment and setup. If a move is in the plans for expansion, consider an area that makes geographic sense for all the dentists under the same roof.

Compatibility

As with any partnership, it’s important to seek out specialists who have the same practice philosophy so as to not recommend competing procedures that could potentially confuse the patient. Additionally, you’ll want to ensure there’s no overlap between specialists, perhaps between an oral surgeon and periodontist. It benefits the team when the general practitioner is versed in the different specialties being offered but does not take control of the procedures and recommendations. For example, while most general dentists are knowledgeable in endodontics, taking on an endodontist will allow the primary dentist to focus on general dentistry.

Collaboration

There’s much more to share than square footage in a collaborative practice model. Think shared teams, facility overhead and peer collaboration that all help improve efficiency and productivity. An increase in production and decrease in overhead will result in optimal profitability and better clinical outcomes for all parties involved. A common collaboration is for a recent graduate to become an in-practice specialist at a dental service organization (DSO) where there’s already a full patient load and the ability to work from the ground up. Additionally, choose partners who complement the work currently being offered, like a general practice with a periodontist or an orthodontist with a pediatric practice.

Creativity

The decision to go into a multispecialist practice doesn’t have to be cut and dry. The specialist can bring his or her own equipment, buy new or even consider a contractual arrangement in which equipment is shared in exchange for services. The owner dentist could supply all bookkeeping, charting materials and reception scheduling, while the specialist could cover the cost of any treatment incidentals, supplies such as instruments, lab procedures and even cotton balls.

What’s next?

No matter the situation you arrive at, you’ll need to inform your malpractice insurance company of the addition of any specialists, consult state regulations on how to categorize a specialist and make sure all arrangements — including a non-compete agreement, percentage of payment based on collections rather than production and what the specialist is expected to provide — are contractually agreed upon. Let the experts at Professional Transition Strategies help guide you.

May 25, 2018

3 Reasons Your Dental Practice Values for More in the Pacific Northwest

The old real estate adage of “location, location, location” carries over to dental practices, too. And in the Pacific Northwest, you’ll find a number of reasons why your dental practice assesses for a higher value than other areas of the country. Here, we list a few reasons why now is a great time to sell.

Desirable location

Sticking with the real estate analogy, the more desirable an area is, the higher property values tend to be, whether the housing market or business property. These days, thanks to the tech boom, the Pacific Northwest is proving to be a seller’s market with the influx of business and overseas investments moving to the area. When assessing the value of a practice, the seller comes out on the higher end of the deal in an area where people want to live and work.

High concentration of DSOs

Along with big business comes dental service organizations (DSOs) that contract with individual dental practices to manage the non-clinical operations, leaving you the option to stay on with a lighter workload to release the managerial responsibilities. In a growing market like the Pacific Northwest, DSOs are willing to pay a higher price to expand their services while also leaving you the option to earn a salary after the sale.

Higher insurance reimbursements

Simply put, your dental practice gets a higher percentage back from the insurance companies than other areas of the country, making the potential to earn more of an attractive quality to buyers. The higher concentration of business in the Pacific Northwest means insurance companies are able to offer a bigger cut, which translates into more money in your pocket both before and after a sale.

What’s next?

Ready to sell your dental practice? Learn how else you can increase the value of your practice before you sell, then contact the experts at Professional Transition Strategies to start the next steps.

May 16, 2018

Partnerships versus Mergers: Which Is Right For You?

When looking to combine practices, the million-dollar question (literally) is whether to go with a partnership or merger. The answer lies in what you’re working toward: retirement or expansion. Here, we break down the two options.

Partnerships

While partnerships have a 60% success rate, it only makes financial sense if the practice is collecting $1.2 million annually. If the practice is collecting less, each doctor wouldn’t bring home enough at the end of the day to make a stable living. A partnership could eventually lead toward retirement, but a more lucrative option is to take on a partner who could expand the offerings of the practice, adding to its value and client base.

Mergers

Though not as common, combining two existing practices into one proves to be successful in terms of equality of responsibilities and income, especially when combining a general practice with a specialty partner. The next step when working toward retirement is to then sell after five years or so to a dental service organization (DSO). Though staying on to work a reduced schedule is an option, selling a merged practice to a DSO will yield higher profits. And ultimately, the process to sell is more seamless since DSOs already have financial backing.

What’s next?

Read up more on your options to sell in our e-book “Strategies for Transition,” then reach out to the experts at Professional Transition Strategies to get the ball rolling.

May 11, 2018

5 Options for Dental School Graduates

You’ve studied for the past eight years and now finally have that much-coveted dental degree in hand. Now what? Even if your dreams are to own your own practice, there are other options to consider and a few steps you might want to take first.

Associateship

While taking on an associate is risky from an owner’s perspective, it makes sense for a fledgling dentist to get their feet on the ground. With this option, you are working for a person or a dental service organization (DSO) as an employee without an ownership benefit or management responsibility. This allows you to relocate or move among practices with ease and little stress since there is no real commitment on your end.

Military, school or government

Working for the military, a school or the government won’t give you the option of buying in to a practice. It will, however, earn you the notoriety to perhaps one day publish scientific work, if that’s what your goals include. This low-risk opportunity affords a relaxed schedule, long-term potential and the option to pursue a passion that the private sector might not offer.

Buy-in

The next best thing to owning your own practice, a buy-in grants you an ownership stake in the practice with the potential to become a partner. While not typically obtained right out of dental school, a buy-in is achievable within three to five years, making it a reasonable and beneficial long-term option, whether with a single practitioner, group practice or corporate environment.

Buy-out

With a buy-out, you gain 100% interest within an existing practice while having the sole freedom to practice exclusively. Not to mention, purchasing an existing practice outright holds a 99.7% success rate for the completion of the note. Compared with a startup, an existing practice comes with its own staff, location, equipment and patient base.

Startup

Rather than taking on an existing client base, you would start your own practice from the ground up. Although the ultimate dream for most, it’s worth mentioning that between dental school and bank loans, you have the potential to be $1 million in debt before seeing your first patient, which may not be an issue for you since the success rate for a dental practice is so high.

What’s next?

Read up on our e-book for dental graduates, then contact the experts at Professional Transition Strategies to start the conversation.

May 4, 2018

5 Types of Dental Practice Buyers

When looking to sell your practice, it’s helpful to know who your potential buyers are. In any case, Professional Transition Strategies (PTS) recommends buying an established practice rather than starting from the ground up due to a higher return on investment. Read on to figure out who would be a good fit for your practice.

Dental school graduate

Though highly unlikely since the average dental school graduate leaves with $500,000 in student loan debt, it is not unheard of for an aspiring professional to look to purchase their own practice straight out of school. In this case, it is more likely that a graduate would look to purchase an established practice rather than starting from scratch because of the existing staff and client base, not to mention the average $500,000 in startup costs.

Corporate dentist

More often than not, a dentist’s first job out of school will be working in a corporate environment, such as a dental service organization (DSO). These highly reputable establishments allow dentists to focus on patient care while contributing no ancillary costs toward the practice, therefore being able to save to buy their own practice in the future.

Dental service organization

A DSO is a likely buyer when the seller is looking to stay on with the practice but wants to release managerial responsibilities, such as in a retirement situation or anyone who is looking to maintain a work-life balance. Selling to a DSO allows you to focus on the clinical side and patient care without contributing time and money associated with running a business.

Associate

Who better to sell to than someone you’re already working with? Most dentists take on an associate in hopes of potentially selling the practice in the future, so keep that in mind when looking for an associateship, while also taking into account the cost of acquiring a practice and the overhead of running a business.

Previous practice owner

A buyer isn’t always necessarily going to be a first-time buyer. A dentist who once owned their own practice could have sold to change specialties and geographic regions or was simply looking for a new opportunity and a fresh start, making this new owner one who is already versed in running a business.

What’s next?

Read more about the different types of buyers and the buying process in the e-book “Transitions: Your Next Adventure Awaits,” then contact the experts at Professional Transition Strategies to start the conversation.