If you’ve decided that you are ready for the next step of your life and your practice, and are considering selling your dental practice, you’ve come to the right place. We, at Professional Transition Strategies, have helped hundreds of doctors throughout the country to sell their practices. Compared to other brokers, we have an incredibly active marketing approach to ensure your practice is in front of every doctor looking for an opportunity in your area. While we do make sure your practice has tremendous visibility, we also believe that confidentiality is important.
Therefore, we implement a strategic approach to garner interest in your practice, while also maintaining complete discretion. Of course, all prospective buyers are required to sign a non-disclosure agreement prior to receiving additional information about you and your practice.
As many dentists come to find out, transitioning a dental practice is not a simple as one may believe. If not done correctly, it can be costly and detrimental to the legacy you’ve created for your practice. At Professional Transition Strategies, we make the transition process easy, painless and seamless for general and pediatric dentists, endodontists, orthodontists, prosthodontists, oral surgeons, and periodontists across the country.
We start with performing an Overall Practice Analysis. We will analysis: numerical, physical and emotional characteristics.
- Profit and Loss Statements
- Patient Information
- Types of Procedures
- Primary Doctor’s Net Income
- Best Exit Strategy
- Financial Situation
- Employee Loyalty
- Transition Type
- Office Update Needed?
- Office Location
To determine possible transition options as well as understand the appraised value of your practice, the team at Professional Transition Strategies will create a complete prospectus. The prospectus will give you the value of your practice by using key metrics that are generally agreed upon within the practice’s specialty.
The (approximately 20 page) document will be broken down into different categories which will be of interest to the buyer.
After you have a better understanding of the value of your practice, you may determine that the appraised price is less than what you expected, or need, to fulfill your dreams of a transition. Therefore, you may want to increase the value of your practice prior to moving forward with selling. Some ways to increase the value are:
- Offer different types of treatments to patients. For instance, if you are not currently doing implant work, ortho, etc., start offering those services.
- Increase your marketing, regardless if it is paid advertising, guerrilla marketing, or associations with which you can network.
- Lower your expenses, if you can ensure it does not come at the cost of topline revenue or your patients.
- Upgrade your facility, however it is important to note that you won’t get dollar for dollar, therefore don’t just do it for the sake of selling practice
- Acquire or merge with another practice because of economies of scale. This can grow exponentially whenever there are 4+ practices in combination.
Types of Transitions
Not all practices nor transition is the same. There are a lot of factors that contribute to determine the right transition strategy for you. A few considerations are: the size of your practice, the location of your practice, types of plans accepted, number of operatories and if there is expansion opportunity, are you looking to continue practicing with the practice longer or do you want to sell and walk away?
While there are various strategies available, the most common transition types are:
- Buy-Out: Purchaser buys practice for a negotiated price with a relatively short transitionary period, typically an average of three months.
- Buy-In: A specific buyer purchases a defined portion of practice for negotiated amount from Day One. In addition to a practice analysis, PTS will perform a personality profile to ensure compatibility.
- Associate to Buy-In (ROADMAP): A potential buyer is courted from a group of associates to buy-in over a period of time. This ensure compatibility and allows time to figure out the future of the practice, rather than deciding from Day One. Division of Power tends to be the biggest consideration which needs to be made.
- Associateship: Associates are easy to find, and this route allows you to maintain full control. However, it is important to note that success rate is only 20%. This is because not everything is agreed upon from the beginning. Therefore, everyone tends to have different expectations at the end.
- Merger: Two existing dental practices combine to become one entity and normally as equal partners moving forward.
- Roll-Up: In a Roll-Up, you purchase multiple dental practices to combine under one entity in a group and maximize to economies of scale. Therefore, when your practice is purchased, you can receive a higher value, ultimately making this one of the most lucrative transition types, if you have time.
- Affiliation: An affiliation gives most of the business control to another entity, typically a DSO or a group, with the purpose of slowly transitioning out of your practice and giving up clinical control to that group. This can be an excellent way to maximize value.
Below are a few examples of unique strategies the Professional Transition Strategies team saw over the past few years:
- A Doctor in small town knew he would sell within the next 7-10 years. He decided to go with associate to buy-in (ROADMAP) transition, to attract the right person to his quaint and charming community. His practice was doing over $1.2 million out of 7 operatories with loyal client base and staff. Two years after signing the initial associateship agreement, he signed a buy-in agreement for 1/3 of practice. Two years later, he sold an additional 1/3 to the same buyer. Resulting in a minority ownership within the practice. Two years later, they consummated the sale with a 1-year associateship contract to achieve every one of his goals.
- A large Oral Surgery group based in a mid-size town, had 7 owners, three of which were looking to sell and retire. They needed to find the perfect transition to ensure continued success for the practice. The group chose an immediate buy-in option for two new individuals. Mid-way through the transition, a fourth surgeon decided to sell their portion as well. It was determined that two new doctors can cover all the production without loss of production.It is important to note that a benefit to a buy-in transaction, is that while it can be immediate if needed, it can also allow for multiple goals to be obtained during the same transaction.
- A Prosthodontist in the mid-west, chose a long term buy-out transition was the right transition for him. Rather than being paid at lump sum at time of closing, he decided to take his buy-out over three consecutive years and staying on as a consultant to the office. This allowed him to decrease his tax rate and maximize goodwill within the transaction.
Ultimately, there are various transition strategies to consider and every situation is different. Therefore, no matter what transition type you are considering – either looking to sell your dental practice, considering bringing on a partner, or looking to buy a practice — you came to the right place. Contact the Professional Transition Strategies team to help determine the right plan for you and your future.
Visit Our Blog
Want to learn more about professional transitions? Or perhaps you are just curious what we have been up to? Visit our blog, Insights, where you can learn more about professional transitions, recent events we have participated in, and stories about our clients and their professional transition.
Read Our Case Studies
Every professional transition is unique its own way. Over the years we encountered a number scenarios, both simple and complex. To illustrate the variety of situations and clients we have worked with, visit our case studies page. You might find something that parallels your needs.
Read Our Ebook
What do I need to know to have a successful professional transition? Good question. We have written an ebook called Strategies for Transition, which provides a comprehensive guide for those figuring out the next steps for themselves and their practice. Learn more and register to receive your free copy.