July 20, 2020
How to Grow Your Dental Practice with a Joint Venture Partner
The silent partners of the dental world, joint venture (JV) partnerships are an often-underutilized or lesser-known way to grow a dental practice. When planning for retirement or an exit strategy in the distant future, a JV can increase profitability by investing in dental practices in which the doctor remains as the owner, operating under their brand with their staff and strategy for many years. Here are the methods JVs can use to grow your dental practice.
A JV‘s goal is to accelerate internal growth and profitability under the dentist’s leadership and brand. Strategies could involve lower product and team benefit costs, payer negotiation leverage, marketing expertise and partnerships with other local dental practices. A well-managed JV can even increase margins with new patients, something the owner might not have time to do while managing the practice and its staff.
While some branded dental service organizations (DSOs) grow primarily by starting new offices, most are creating growth through acquisitions. However, investing in already-established practices will pay out come valuation time. A JV partnership should execute both internal practice improvement and acquisitions effectively to increase capital, as long as the transaction is structured properly. With private equity, a transaction should earn a significant value increase for the investors in your JV, as well as the practice owner who takes part of their purchase consideration in equity.
Contact the experts at Professional Transition Strategies to see if a JV partnership is right for you.