March 20, 2023
Should You Hold, Sell or Find a Partner for Your Dental Practice?
It’s the age-old question: Should you hold, sell or find a partner for your dental practice? Professional Transition Strategies Founder and President Kyle Francis recently sat down with Senior Advisor and Cofounder Ryan Isaac for his podcast The Dentist Money Show. Here’s a breakdown of all the possibilities when it comes time to test the market.
What’s the current situation?
Francis said the average age for a PTS client is 41 — not quite retirement age but the point in a career when a doctor-owner might be wondering what the next move is. How can you take your dental practice to the next level? What are the different options? What is your dental practice worth? Now could be the time to “grow something big,” Francis said, noting a turning point when you might want to leverage your debt or offload managerial responsibilities. “Dentistry is so darn predictable … and also one of the most undervalued assets,” he added.
Where is DSO consolidation going?
“It used to be that all transactions were individual-to-individual,” Francis said. “We’re now in a unique place with types of deals and structures that didn’t exist 5 or 10 years ago.” As consolidation has ramped up, so has the competitiveness of the deals. Francis noted the dental industry is 30 to 35% consolidated right now and will likely plateau at 65 to 70% in the next few years, pointing to comps in other fields of medicine that have already gone through a consolidation. “Letting big corporate win, that won’t happen,” Francis said. “If you put enough good clinicians under the same platform, you’re set up to win.”
Why hire a dental practice broker?
Simply put, a dental practice broker will help you prioritize what you want to get out of a transition of ownership, whether that’s life, money or a balance of the two. Thinking of a broker as a teacher, not a salesperson, Francis said, “you make the best decisions by having the most data points in front of you.” Only a professional broker with experience in the dental industry will help you understand where your equity lives and how to best leverage your capital to make the best financial decision that’s aligned with your personal and professional goals.
What are the next steps?
Working with a dental practice broker isn’t exclusive to the transition process. A professional dental practice broker will help you understand the breadth of the market is any given moment in time, taking the emotions out of any options on the table. “DSOs and dentists are a reflection of each other,” Francis stated. “There are good ones, and there are bad ones.” Let the experts at Professional Transition Strategies (PTS) put together a complimentary valuation to assess your next move. Contact PTS to get the process started.