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How to Work Smarter, Not Harder at Your Dental Practice

Whether you’ve recently purchased a dental practice or are even a few years out from retiring, everyone’s goal should be to work smarter, not harder to avoid potential burnout. Here’s how to make sure you’re getting the most out of the hours in your week, months, and years.

Know your numbers

It’s important to note that even though you may own a high-production office, that does not mean you are necessarily successful. Calculating your office overhead will then, in turn, help you understand your bottom line. For example, if you gross $2 million but have 80 percent overhead, your net profit is only $400K, while conversely, a $1 million practice with only 50 percent overhead is profiting $500K.

Ask leading questions

Getting to know your patients and their needs is as easy as asking “What would you like to change about your smile?” The answer is almost always “a whiter smile.” Showing them the shade chart to illustrate where they are now and where they want to be can start the discussion of teeth-whitening options, whether it is in the office, at-home bleach trays, or crowns or veneers. Initiating this brief conversation could generate an easy profit.

Offer a variety of products

Give your patients the ability to shop inside your office, such as a few various brands of power toothbrushes as part of a daily care regimen or an oral irrigator for those reluctant to or who need to floss. Additionally, for adults who experience hypersensitivity or a high caries rate, offer an in-office fluoride treatment and xylitol gums and mints at a minimal expense.

Manage schedule efficiently

A properly trained front staff leads to fewer unfilled appointment blocks that aren’t bringing in any revenue. Appointments should be scheduled from noon backward and prioritized based on the level of care needed and time required for each patient. Automate as much of the process as possible by confirming all appointments by text or email and sending messages based on a patient’s individualized care plan. Any last-minute cancellations can be filled by sending out a mass text or email to a patient wait list, rather than making individualized phone calls.

What’s next?

Read up on more ways to properly manage your dental practice on our Insights blog, then contact the experts at Professional Transition Strategies for more advice.

What To Do When Your Dental Practice Is Too Busy

Is your number of active patients—those who have visited the office in the last 18 months—more than 2,500 when 1,500 active patients is considered full capacity? Are you booked 80 percent of the time with a six-month advance? Then it may be time to implement a plan of action for a more manageable workload. Here are some suggestions to help get you started.

Manage your schedule

The two most common areas of stress are too many patients and booking patients too far in advance. The answer is to consolidate your appointments. Try treating patients in as few appointments as possible, perhaps by planning to do a querent or half mouth an appointment.

Delegate

Doubling as a business owner, it’s easy to get lost in the day-to-day responsibilities that are, in theory, easier for you to handle than to delegate. Leave the high-level tasks to yourself while passing off other responsibilities to your staff.

Raise your fees

Raising your fees in increments of 10 percent will go unnoticed by most patients. Those patients that are lost by the increase will be offset by the revenue gained.

Bring on an associate or partner

If the workload is still too much to manage, consider enlisting help. However, bringing on an associate or partner should never be done to build up a business. Only then should you consider whether or not your office has the physical space to accommodate another doctor. (Read more on the differences between an associateship and partnership here.)

Reevaluate insurances

When all else fails or isn’t enough, it’s time shop different insurance companies. Compare the list you accept, and measure based on which generate the most revenue.

What’s next?

Read up on more strategies for better managing your practice on the Insights blog, then contact the experts at Professional Transition Strategies to help implement a plan.

Dental Practice Transitions, by the Numbers

You’ve kept up with the Insights blog; you’ve taken the dental practice transition quiz. Now it’s time to learn even more about the process by way of a cheat sheet broken down by the numbers.

1,500

Number of active patients considered full capacity for a single dentist. Any more, and it may be time to consider taking on an associate or partner.

680 

Credit score that is favorable to getting a better business loan.

80

Percent of goodwill that contributes toward the overall value of your practice.

150 

Hours it takes to sell a dental practice, which is one of many reasons to hire a professional broker.

15

Minimum number of days patients and staff should be notified about the sale of a dental practice.

30

Percent of dental practices that will belong to a dental service organization by 2021, as predicted by the American Dental Association.

5

Years out you should start thinking about a retirement plan.

20

Pages that make up a prospectus, broken down into different categories of interest to the buyer identifying the areas that potentially need attention.

99

Percentage success rate of a buy-out, versus 60 percent for a partnership and 20 percent for an associateship.

What’s next?

Read the e-book “Strategies for Transition” to learn more about the different dental practice transition options, then contact the experts at Professional Transition Strategies to learn more.

Associateship versus Partnership: Which Is Right For You?

Bringing on an associate or partner to your dental practice should be done when the patient demand warrants it. But which is right for your dental practice? Here’s how to figure that out.

Know your numbers

The number of active patients who visit the practice at least every 18 months is a clear indicator that it’s time to take on an associate. While 1,500 active patients is considered full capacity for a single dentist,  if the practice has more than 2,500 active patients, then the practice should be able to accommodate a full-time associate. The math goes: Every 200 to 250 active patients should be able to support one associate day per week. Along the same lines, if you are booked 80 percent of the time with a six-month advance, it may be time to bring on another doctor or look at your schedule.

Establish your practice

No matter which route you choose to go, taking on an associate or partner shouldn’t be done to build up your practice. Rather, there needs to be enough work for them from day one in order to make the deal worthwhile. If deciding on a partnership, the practice will need to be big enough both in terms of active patients and also collections and physical size. In general practices, that means collecting at least $1.2 million and $1.4 million to $1.6 million in specialty practices.

Assess your situation

The biggest consideration to note is that associateships are only successful 20 percent of the time, while partnerships see a 60-percent success rate. Associates typically only last two years at most because of unset expectations in regards to patient assignment, salary, and timeframe for branching out and buy-in related to value, purchase price, and buy-in/buy-out terms.

What’s next?

Learn more about the different options for expanding your practice on the Insights blog and in the e-book “Strategies for Transition,” then contact the experts at Professional Transition Strategies to get the ball rolling.

5 Ways to Attract New Patients to Your Dental Practice

The underlying goal of any business owner is to grow its customer base. With a dental practice, whether new or existing, there are small but impactful ways to attract new patients, while at the same time contributing to the valuation of your business. Here’s how to get started.

Insurance options

The sale of a dental practice is a great time to start shopping other insurance companies to make sure you’re offering the best coverage for your patient base, while also opening the door to new patients.

Newspaper announcement

In addition to involving the community in the transition of a dental practice, a joint announcement in the local newspaper will help drive new business to the practice with the added exposure.

Marketing strategy

Pre- or post-sale, a well-laid marketing strategy takes time to plan in terms of reach and return on investment. A new practice will need a marketing strategy that is specific to its staff and client demographics rather than carrying over a plan from the previous owner.

Expand services

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? Patient need and care should be top of mind when considering the best solution.

Relocation

A change in geographic location will not only inevitably attract new clients, but also present the opportunity to upgrade equipment to offer new services, while being careful not to overbuild your new location to avoid patient blowback.

What’s next?

Learn more ways to attract new patients to your dental practice by catching up on our Insights blog posts or contacting the experts at Professional Transition Strategies.

How to Get a Better Deal on Your Business Loan

There’s room for negotiation in every step of the dental-practice-buying process, including when shopping for a business loan. A low interest rate, low fees, favorable payment schedule, and flexible or no-collateral security will all significantly enhance the benefits of your business loan. Here’s how to get a better deal.

Know your numbers

Like in your personal life, good credit can work to your advantage. In order to get the best deal, make sure your credit score is above a 680. Likewise, having at least $50,000 in the bank will help you get favorable terms on your loan.

Learn your value

For existing practice owners, going through the valuation process can assess the true worth of your business. Though nearly impossible for a brand-new dentist to obtain, real estate and even cars can help get you a positive net worth faster.

Shop options

Get quotes from at least three different lenders that have experience in practice financing (two national and one local) when shopping around for the best loan. Research different promos from each, and have them compete for your business.

Get prequalified

After choosing your lender, getting prequalified and getting in your prequalification letters as soon as possible will ensure you aren’t overstretching your financial means.

Choose lending type

Conventional lending will save you a considerable amount of time, among other things. With an SBA loan, which works with the government, be prepared to complete lots of paperwork.

What’s next?

Read up on the rest of the steps involved in the buying process in the e-book “Transitions: Your Next Adventure Awaits,” then contact the experts at Professional Transition Strategies for guidance.

5 Reasons to Use a Professional Broker to Sell Your Practice

Selling a practice takes approximately 150 hours, which is why you’ll want to hire a professional broker to do the heavy lifting rather than attempting to add that task to your already full plate. In order to get the most of your sale, both financially and personally, there are other considerations that can affect the entire outcome of selling your practice. After all, your time is money.

Focus on the bottom line

Your primary focus during the selling process is to maintain the success of your practice. Both you and your buyer will suffer consequences if the value of your practice decreases with a decrease in production.

Enlist an expert

Just like your patients come to you for your experience, trust a broker for their expertise. Professional practice brokers are experts in the industry and have extensive market knowledge that will lead to a more seamless and possibly faster sale.

Alleviate stress

Change can bring on unnecessary anxiety with both staff and patients if the transition is not handled properly, ensuring the identity of your practice is protected.

Vet potential buyers

A professional broker will actively handle all your marketing needs to ensure the sale of your practice is put in front of the right eyes, often already knowing potential buyers looking for a practice in your area and presenting you with only qualified prospects.

Remain professional

Selling a practice can be an emotional process, so a professional broker will help remove emotion from the transaction a more efficient and cleaner outcome, allowing you to maintain a work-life balance.

What’s next?

Professional Transition Strategies not only offers a free valuation at the beginning of the process with no signed contract in place, but also 30-day listing agreements where most other brokers require a yearlong contract with penalties. Contact the experts to start the seamless selling process.

How to Get a Return on Your Dental Practice Investment

Purchasing a dental practice is no easy task, but it’s only the beginning of the hard work you’ll need to do to see a return on your investment. Whether the practice is new or existing, opportunity cost should drive all your post-buying decisions. Here’s how you can ensure ROI is top of mind.

Time value

At the top of your considerations list should be the theory that a dollar in the bank today is worth more than the expectation of receiving a dollar in the future. In other words, spending and earning wisely now will only pay off in the long run.

Loan payment

Like taxes on your mortgage, interest on your loan payment can be written off as a deduction. Consider taking out a longer-term loan with lower payments to increase the cash flow of the practice, similar to taking out an insurance policy.

Tax advantages

Along the same lines, maximizing tax advantages with every decision will only pay off every year. For example: While all assets depreciate in value over time, Section 179’s Depreciation Schedule allows you to depreciate all assets up to a certain amount in the first year so that no taxes will be paid, in most cases. (Note: Associates don’t receive the same type of tax advantages as the practice owner.)

Cash flow

When purchasing an existing dental practice, cash flow should be analyzed by the income stream of the practice, the compensation necessary for the purchasing dentist, and any obligations incurred, no matter if you are looking at the loan for the actual purchase of the practice or any other working capital needed for equipment, supplies, or anything else to get the practice ready for operation.

Sole proprietorship

Rather than taking the safer route working as an associate or for a dental service organization that will only provide a commission for the work you do, owning your own practice will only maximize the investment of your dental degree because you’ll not only receive a commission but also a profit component.

Prospectus

When working with the experts at Professional Transition Strategies, an approximate ROI equation for the purchase of the practice is included in each prospectus, which adds up the compensation of the doctor, any adjustments made for non-business-related expenses, and net income distributions. The remaining amount is an approximation of the cash flow or immediate ROI available to the purchasing doctor.

What’s next?

Read up on the buying process in the e-book “Transitions: Your Next Adventure Awaits,” then contact the experts at PTS to help guide you through the process.

4 Steps to Selling Your Dental Practice

A successful dental practice transition doesn’t happen overnight. In fact, a well-laid plan to sell your dental practice should start as early as five years out, depending on whether you’re looking to retire or bring on a partner. Here are the steps you should take to sell your dental practice.

Hire a broker

A qualified broker will perform a complete appraisal on your practice, help you understand your options in terms of a timeframe for the sale, offer advice on how to increase the value of your practice, market your practice and reach out to potential buyers, and schedule showings of the practice, as well as ensure you are still concentrating on the health of your practice. (While most brokers charge a fee, Professional Transition Strategies can occasionally perform these services at no charge.)

Vet potential buyers

A non-disclosure agreement is signed by every potential buyer who inquires about your practice, after which time a prospectus is sent. A conversation between the potential buyer and broker then takes place to answer questions and gain a better understanding of the buyer’s intent. If the practice is deemed to be a good fit, a letter of intent is submitted, which typically takes 10 days.

Due diligence process

Once the seller and buyer agree to the terms, the due diligence process begins, which can take anywhere from 30 to 45 days. PTS can provide a checklist of the due diligence process for the seller that includes a breakdown of the practice corporation, personal funds, and treatment of accounts receivable, in addition to real estate, insurance, and licensing.

Notifying patients and staff

In order to preserve the relationship with your patients and staff, you’ll want to tread lightly when announcing the transition. Staff should be notified 15 to 30 days before the closing, whereas patients and referrals should only be notified after the closing date.

What’s next?

Read our e-book “Strategies for Transition,” then contact the experts at PTS to start the process of selling your dental practice.

Quiz: How Well Do You Know the Dental Practice Transition Process?

You’ve kept up with our blog; now it’s time to put your dental practice transition knowledge to the test. We’ve put together a 10-question quiz that covers everything from the different types of transitions to the factors that contribute to the “goodwill” of your practice. The prize for a perfect score? Priceless information to help guide you through the dental practice transition process.

How Well Do You Know the Dental Practice Transition Process?

 

1.) Which of the following is a top reason to sell your dental practice?

a.) Retirement

b.) Maximize management responsibilities

c.) Marriage or divorce

d.) None of the above

 

2.) What is one way to increase the value of your practice before you sell?

a.) Limit services

b.) Sell equipment

c.) Lower expenses

d.) Increase expenses

 

3.) Who is buying dental practices?

a.) Dentists looking for an additional location

b.) Dental service organizations

c.) Associates

d.) All the above

 

4.) What is one consideration you should make when relocating your dental practice?

a.) Smaller square footage

b.) Proximity to competition

c.) Overhauling equipment and building

d.) Maximizing downtime

 

5.) When should you start thinking about a pre-retirement plan?

a.) 3-5 years

b.) 5-10 years

c.) 10-20 years

d.) Never

 

6.) How should you notify your patients of a dental practice transition?

a.) When they show up for their next appointment

b.) Joint letter to patients and newspaper announcement

c.) Changing the name of the practice

d.) None of the above

 

7.) What changes could you make after a dental practice transition?

a.) Discontinue supplies

b.) Bring more specialty work in-house

c.) Lay off employees

d.) Sell patient list

 

8.) What is one factor that does not contribute to the valuation of a dental practice?

a.) Office hours

b.) Return on investment

c.) Accounts payable

d.) Equipment

 

9.) What factors contribute to the “goodwill” of a dental practice?

a.) Community status

b.) Patient relationships

c.) Staff loyalty and longevity

d.) All the above

 

10.) Which of the following is NOT a type of dental practice transition?

a.) Buy-in

b.) Associateship

c.) Distribution

d.) Merger

 

Answer Key:

(1.) A. Retirement; (2.) C. Lower expenses; (3.) D. All the above; (4.) B. Proximity to competition; (5.) A. 3-5 years; (6.) B. Joint letter to patients and newspaper announcement; (7.) B. Bring more specialty work in-house; (8.) A. Office hours; (9.) D. All the above; (10.) C. Distribution

 

To learn more about the transition process, check out a few of our previous blog posts:

Why should you sell to a dental service organization?

How can you lower your dental practice overhead?

What are the sections of a dental practice prospectus?

What types of dental practice agreements will you enter?

Who should you have on your team of advisors?

How should you choose a lender?

What questions should you be asking yourself before selling your dental practice?

What considerations should you make before starting a multispecialist dental practice?

What questions should you be asking your buyer?

How can you ensure a successful dental practice transition?

What options are available for dental school graduates?



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