Navigating Dental Practice Transitions: Insights from Kim McCleskey on The DrBicuspid.com Podcast

In a recent episode of The DrBicuspid.com Podcast, Professional Transition Strategies Consultant Kim McCleskey joined to discuss the intricacies of the dental practice transition process, whether you’re a doctor wanting to sell your practice to a DSO (dental service organization) or just want to understand what your options are. With three decades of experience in the industry, McCleskey sheds light on how dentists can navigate this complex journey and achieve sustainable growth. Here are key takeaways from the podcast:

Adapting to a Changing Landscape

The landscape of dentistry is constantly evolving, requiring dentists to adapt and stay informed. The dental industry is following a similar consolidation pattern to other industries such as primary care and retail sectors. Experts estimate the dental industry is about 35% consolidated and will reach the full 60% to 70% consolidation within the next five years. McCleskey stressed that this consolidation wave has a limited window of opportunity for dentists to sell their practice to a DSO (dental service organization) to receive the highest return on their investment.

Building Sustainable Growth

McCleskey emphasized the importance of dentists focusing on building sustainable growth in their practices and how DSOs can help. While historically, DSOs have gotten a bad reputation for imposing hefty growth requirements, they’ve changed their tune and have realized it’s mutually beneficial to collaborate and find solutions that don’t require the dentist working even harder to achieve sustainable growth. Instead of imposing an increased workload, many DSOs emerge as a true partner with the practice owner as they can help manage expenses and improve the EBITDA margin, such as leveraging benefits like economies of scale for better prices on supplies.

Comprehensive Understanding of Options

Dentists have diverse goals and motivations that influence their decision to sell their practice, making it crucial to understand their ultimate outcome. They also need a comprehensive understanding of the options and strategies available to them. This knowledge empowers them to make informed decisions and achieve the result that aligns with their goals.

Tailoring Transition Goals

McCleskey shared that transition goals should be tailored to where the doctor is in their career and how much time they want to continue working before retirement. For instance, she discussed that many doctors in their 40s prefer to stay involved in the practice, so deal structures like joint ventures are great options, in which they retain a portion of their practice and still receive distributions since it’s a partnership. For older dentists looking for an exit strategy with a shorter trajectory, she shared that a 100% buyout may be worth considering.

Providing the Right Guidance

Understanding a dentist’s ultimate outcome is crucial for providing the right guidance throughout the transition process. Dentists must work with expert advisors and brokers who understand their goals and can help them achieve them.

What’s Next?

Listen to the recent episode of The DrBicuspid.com Podcast featuring McCleskey to learn more about how collaboration, informed decision-making, and a focus on sustainable growth are vital for a successful dental practice transition.

Contact the experts at PTS for help navigating the dental practice transition process with confidence so you can achieve your ultimate outcome.