What Is the Value of Your Dental Practice?

In an article for DentistryIQ, Professional Transition Strategies Founder and President Kyle Francis says “it’s surprising that many dentists don’t even know the value of their practices.” As your most valuable asset, your dental practice is worthy of the time and investment to seek an appraisal. Here’s what to consider.

Keep your options open

Retirement and career planning are the two main reasons dentists need to know the value of their practices,” Francis says. This gives practice owners the opportunity to leverage the values they’ve created to get a bigger payday with enough time to work with current or future dental partners to make necessary improvements over the course of time. In the long term, they can build value in a number of other ways, including an equity relationship with a dental service organization (DSO), which can take up to seven years.

Factors affecting practice value

An appraisal is really the only way to assess the true value of your dental practice since they are performed on a case-by-case basis. Practice type, location, practice visibility within the community, regional growth, standalone building versus retail center and even signage all contribute to the overall value of your dental practice. Other factors include revenue trends and forecasts, the number of active patients, patient attrition and retention rates, and new patients in the last month and year, as well as value of the dental equipment and its resale rate.

Assessment and documentation

Getting a dental practice appraisal is no small task on the part of the owner but well worth it in the end. It will require three years of profit-and-loss statements and tax returns, current balance sheet, production broken down by provider and procedure type, active patient roster and list of employees (with wage or salary information), new patients during the past 12 months, accounts receivable aging report, copy of lease (if applicable), dentist biography, photo documentation of office and equipment, office hours, and insurance plans accepted. “The sooner you know how much your practice is worth, the earlier you can start enhancing its value,” Francis says.

What’s next?

Contact the experts at Professional Transition Strategies to start the process of appraising your dental practice, whether you plan to sell, retire or practice for 20 more years.

5 Reasons to Use a Broker to Sell Your Dental Practice to a DSO

With an estimated 600 dental service organizations (DSOs) across the country, the number of possible offers for your dental practice can seem exhilarating. However, not all DSOs are created equal, and more importantly, neither are all dental practice transitions. Here’s why to use a broker to sell your dental practice to a DSO rather than trying to navigate the transition on your own.

Experience

Brokers will have personal experience with the DSOs. It’s easy for a broker to predict which way the transaction is heading and negotiate accordingly. This is all to say you should use a broker that has experience with dental practices, specifically one that knows and has experience with the different groups.

Knowledge

Brokers will have inside knowledge of the groups that actually practice clinical autonomy. When representing yourself, it can be hard to get to the bottom of each interested party while also negotiating the terms and running a successful practice at the same time.

Representation

By having someone act as your fiduciary, you can feel confident your best interests are being represented rather than just the interests of the group. The broker shouldn’t be compensated by any group. While being your advocate in the transaction, the broker shouldn’t have any other skin in the game.

Demand

A broker has the ability (and obligation!) to bring your opportunity to several groups that share your values. By creating more demand, you tend to have better negotiating power so that you can expect to receive higher offers and betters terms by the end of the transaction.

Bottom line

Houses are commodities; dental practices are not. Therefore, while you can sell your own house, you need an intermediary to sell your dental practice. Your time is better spent focusing on the well-being of your practice and its employees and patients before hanging up your proverbial hat.

What’s next?

Contact the experts at Professional Transition Strategies for help selling your dental practice to a DSO.

PTS Launches Innovative New Dental Practice Real Estate Cooperative

Co-op concept groups single-tenant dental practice properties for dentists who join dental service organizations (DSOs), allowing dentists to retain part ownership and lower capitalization rate with private equity backing

Professional Transition Strategies (PTS), a company that represents dental practice buyers and sellers and offers brokerage and practice consulting services, today announced the launch of a new real estate concept that will improve property value for dentists who own a single-tenant building where they practice when they join a dental service organization (DSO). By joining PTS’s dental practice real estate cooperative (co-op), dentists can retain part ownership in their building while significantly improving the property’s capitalization (cap rate).

“DSOs are the fastest-growing sector in dentistry right now, especially among younger dentists, who are three times as likely as older peers to be affiliated with a DSO, according to the American Dental Association (ADA),” PTS Founder and President Kyle Francis said. “When DSOs purchase a practice, private equity groups typically purchase the buildings that DSO group affiliates practice from, but when a dentist joining a DSO owns a single-tenant building, that property falls through the cracks. The co-op groups those properties together, backing leases with a portfolio worth hundreds of millions of dollars, increasing security and value.”

Dentists who sell to the co-op and retain part ownership benefit from the arrangement by lowering the cap rate, a formula used in real estate investing that divides the annual income of the property by its cost or value. The cap rate is a measure of risk in an investment, and lower cap rates are more attractive to investors. Dentists who sell a portion of their practice to PTS’s new dental practice real estate co-op can expect a lower cap rate on the same principle that makes any other type of business’s property more attractive to investors if it’s occupied by a chain rather than a mom-and-pop shop: lower risk.

The co-op bundles properties for dental practices similarly to how DSOs bundle the dental practices, with the selling dentist retaining part ownership in a joint venture (JV) agreement and selling over time. A property that is part of a co-op portfolio of strong leases with many long-term tenants generating hundreds of millions annually is more attractive to investors than a single-tenant practice generating half a million dollars per year, so it can sell at a lower cap rate and secure a stronger return.

“For dentists who own the property where they practice, that property is typically their second-most valuable asset after the practice itself,” PTS Lead Broker Stanton Kensinger noted. “If there’s a way they can lower the cap rate from the 8.5 to 10 range to 6.5 to 7 by selling to the co-op, that’s a win-win situation for everyone. PTS is in a unique position to put this co-op together since we already work with numerous DSOs across the US. As far as we know, this co-op concept has not been done before in the dental industry, but we have an opportunity to create additional value with the co-op, so we’re pleased to offer this new option.”

About Professional Transition Strategies

Founded in 2006 and headquartered in Colorado Springs, Colorado, PTS helps dentists buy, sell or start dental practices, move to new offices or expand at a current location. The company is committed to client success and provides expert consulting services to help dental professionals improve operations, marketing, accounting and other facets of practice management. PTS donates a percentage of its profits to Give Back a Smile, a cosmetic dentistry charitable foundation that restores the smiles of victims of violence. Find out more about PTS at www.professionaltransition.com.

How Does the COVID-19 Pandemic Affect Dental Practice Valuation?

dental tools

We’ve gone through some crazy months with the COVID-19 pandemic shutdown. Those owning dental practices undoubtedly wonder how locking their doors for all procedures aside from emergencies would affect their numbers and, in turn, the value of their practice.

Unlike businesses, such as restaurants, ride-sharing services and even amusement parks, whose revenue during the shutdown is lost forever, revenue for dental practices was delayed but not lost. This is because tooth decay, impacted wisdom teeth and braces can’t be treated at home.

Most likely, you are working harder than ever before to ensure you meet the pent-up demand from the shutdown. Your numbers reflect the additional hours you are seeing patients and the accelerated hygiene program you have implemented.

While your concerns during the spring are warranted, it is still important to know where your practice currently stands. The best way to do so is with a practice appraisal so you can start working off facts instead of feelings.

When a dental practice valuation is created, your financials are incredibly important. But not only your financials are considered. In addition to your top-line and bottom-line numbers, understanding your practice in and out is imperative. To do so, reports from your practice management software are also necessary. Now is the time to dig even deeper.

Reports from your practice management software

Here are some of the reports you can get from practice management software, such as Dentrix, Eaglesoft, OMSVision, WinOMS and Open Dental:

  • Production summary by category: A buyer will want to know everything there is to know about your practice before making an offer. A common question is the type of procedures you do in-house. They want to know if they can replicate the type of dentistry you perform. Do you place a lot of implants? Do you refer out most surgery?
  • Practice statistics: Your practice statistics report will give you a statistical snapshot of your practice. A potential buyer is interested in looking at this so they can develop a strategic business plan if they decide to buy your practice. The report easily groups together statistical information about your practice, such as patient demographics, continuing care statistics, new patient stats and the number of patients per provider.
  • Aging reports: While your accounts receivables tend to not be included in your practice value because it is always changing, it still holds value. Aging reports help determine how your practice is collecting its accounts receivable, as well as tracking family and insurance balances. A good rule of thumb is to expect 85% of your accounts receivable total on top of the fair market value of your practice, if you are planning to sell your accounts receivable in addition to your practice.
  • Ratio of patients with insurance versus cash-pay patients: Most buyers have a preference of fee for service (FFS) versus insurance when buying a practice. While some may not care, almost all want to know the breakdown. Is the practice 50% insurance-based and 50% FFS? Is it mostly insurance based? This report will do the hard work for you when finding the answer.
  • Patient demographics report (by age or ZIP code): A buyer does not need to know exactly who your patients are (after all, that would violate U.S. Health Insurance Portability and Accountability Act (HIPAA) laws). They do, however, need to know the type of patient you see. Do they skew younger or older? Do they live near the office, or do the majority tend to travel a long distance to see you? Understanding who the patient is by demographics allows a potential buyer to understand even further what they are investing in, as well as potential attrition rates.
  • Production summary by American Dental Association (ADA) code and category: In addition to the breakdown of production by category, a buyer will also want to know how much of each procedure contributes to your overall revenue. They are also interested in learning what each provider is producing and collecting. This includes not only the seller, but also associates and hygienists. It is important for a potential buyer to determine at what level they will need to produce to maintain practice revenue, especially if the selling doctor is not staying onboard.

Determining the value of dental equipment

We all wish that the value of your dental equipment is close to what you paid for it. However, similar to a car, the value decreases once it leaves the lot. Of course, this is not to say that there is no value because there is. When determining the equipment value, your valuation creator will look at it as if you were to place it on eBay or Atlas Resell Management. Aspects that will make this part of your valuation to be the most valuable are if your dental practice is digital, if you own a laser, conebeam, digital pan, CAD/CAM or 3-D printer, and if you’ve recently remodeled your office.

The importance of financials

Last but certainly not least are your financials, which are very important for determining your practice value. When looking at your financials, the past three years are considered but at different levels. The most recent year is weighed the heaviest followed by last year. The year before is weighed the least.

The great news is that if your practice has been around for a few years, you don’t need to factor in your 2020 numbers when determining the value of your practice. While we can’t simply erase 2020 as much as we may desire, we can at least revel in the fact that those few months of being closed doesn’t affect your largest asset. This is only the case if you have historical data to work off of.

If you purchased your practice within the past year, 2020 numbers must be included. Yes, since you reopened, your financials look great. However, the closed months can affect your overall value significantly with such little data to consider within the valuation, therefore, becoming detrimental for your practice value.

How will COVID-19 affect your dental practice value?

The details of how you reopened your practice after the COVID-19 shutdown will not affect your practice value. If you are considering selling all or a portion of your practice, it is valuable information to the buyer. Some of the most common questions asked are:

  • How many weeks were you/are you closed?
  • When did you/do you reopen?
  • Were you open for emergencies?
  • What day did you/will you reopen at reduced capacity?
  • What day did you/will you reopen at full capacity?
  • Do you expect all staff to return upon reopening?
  • Did you receive a Paycheck Protection Program (PPP) loan? If yes, how much did you receive, and when did you receive the funds?
  • What post COVID-19 operation measures were taken? Did you require N95 masks, face shields, disposable gloves, headcovers/booties, UV lights, extraoral suction, rubber dams on all patients, implement hand scaling only, pre-procedure mouth rinse, patient questionnaires/waivers, temperature checks, social distanced reception areas, etc.?

How goodwill affects a dental practice’s value

While not tangible and maybe a bit harder to understand, the goodwill within your practice will make up a good part of your practice’s value (as much as 80%!). The goodwill makes up those non-categorized assets, such as your community status, patient relationships (shown many times through your recall systems, active appointments, patient charts and referring doctors), and staff loyalty and longevity. This goodwill, when the practice is transitioned correctly, ensures long-term income for the buyer.

What is affected by COVID-19?

While your practice value may not be affected by COVID-19, what may be affected, if you are looking to sell all or a portion of your practice, is the closing date. Many banks and institutionalized buyers, such as dental service organizations (DSOs), ask for your practice to be open anywhere between one to three months after you reopen to ensure that practice stability is not an issue. In this same regard, they will ask for your practice to be producing at least 80% of your pre-pandemic production.

While we do not know what the future holds and when 2020 numbers are factored into a valuation, you can at least gain a better sense of where you are now and your options by getting all the facts.

To understand the value of your practice, post-pandemic, and make an educated decision on the future of your practice, contact the experts at Professional Transition Strategies.

To learn more about different appraisals methods are best for dental practices, check out the July issue of Dental Economics.

The DSO Conundrum

When it comes to selling your dental practice, it’s easy to rule out the option to sell to a dental service organization (DSO) because of their negative yet false reputation of corporate interest. In fact, a DSO might be a good fit when the seller is looking to stay on with the practice but wants to release managerial responsibilities, such as in a retirement situation, anyone who is looking to maintain a work-life balance, or a dentist who wants focus on the clinical side and patient care without contributing time and money associated with running a business. Here are all the facts you need to know about selling to a DSO.

What is a DSO?

A DSO is a business organization with the sole purpose of allowing non-dentist investment into dental practice ownership. A DSO isn’t necessary if all of the owners will always be dentists. But, you are limiting the value that can be achieved as the growth is limited by the personal funds of the owning dentists and their ability to carry debt.

The backstory

Dating back to the 1990s, many DSOs started from a single office that became very successful and its owner decided either to buy or start up other offices around them to keep up with the financial growth. However, most dental boards around the country have regulations limiting practice ownership to only dentists. In the 2000s, investors began putting together structures to help these large groups thrive, and this activity has expanded dramatically in the last 10 years.

Their responsibilities

DSOs provide non-clinical functions on a continuum. Some do a little, such as financial backing or accounting services; some do a lot, such as supply and lab formularies. However, they are a consulting group, a buying group, or an outsourced business services company. But, they may offer some or all of these services as they grow.

A new approach

Whether considering a typical transition or blended approach, it’s important to note that some may approach a DSO with hesitancy. Patient interest and office culture are just a few concerns staff can manifest when going into an unknown situation. But, the incentives have been aligning investors and doctors as both have goals they want to achieve.

The pitfalls

Before entering into an agreement, have an appraisal done by an independent party that includes a range based on other comparables. Avoid dealing directly with the DSO in any cases, and be sure to consider more than one or two groups when looking to transition. Lastly, conduct an accurate return-on-investment calculator to see what the long-term result will be in any situation.

What’s next?

Contact the experts at Professional Transition Strategies to learn more about existing DSO options and investors starting DSOs.

How Do You Value a Dental Practice?

dentist office

While it may seem as though you can value your practice by simply taking a “x” percentage of your collections, it is not that cut and dry. Furthermore, because there is no Multiple Listing Service (MLS) for dental practices, you cannot value a practice by reviewing market comparisons. There are many details considered when determining the value of a dental practice. That’s why it is imperative to have a comprehensive practice appraisal conducted for your practice. Here’s all you need to know about valuating a dental practice.

Why do I need a valuation?

A detailed valuation/prospectus will help you to understand the current value of your practice and give you a roadmap about options and opportunities within your practice. It will also include ways to increase practice profitability and value.

By understanding the current standing of your practice, you can make an educated decision on its future. For instance, is it the right time to sell? Is the practice healthy enough to support an additional doctor full time? Is your practice attractive to a group with which you can affiliate? Is your practice healthy enough to allow you to expand and acquire additional offices to build your empire?

Get the facts

Almost every firm that offers valuations or appraisals will most likely come to a similar value, with different ways of getting there. What makes the appraisal or valuation good is how close they are to how a bank or dental service organization (DSO) would value your practice. While you may believe your practice should be valued higher because of its growth opportunity, a bank will not lend on potential. For this reason, it is important to use a reputable company for your appraisal. This will allow you to work with accurate numbers and facts rather than ballparks and hypotheticals.

What will affect my practice value?

Because no two practices are identical, it is important to understand the different factors that can affect your practice value. The following considerations will play an important part when determining your practice’s fair market value:

  • Location: When deciding the multiplier to use for a practice, location is important. Not only is the city and state a major factor when measuring desirability, but the practice visibility within your city is also a key component. Is your practice located in a rural, slow-growing area? Or is it in a booming metropolis that has seen consistent growth through the years? Is your office in a medical complex with little or no signage? Or are you in a retail center or standalone building?
  • Practice type: The type of dental practice you own will affect the value of your practice. A general dentistry practice tends to receive a greater multiple than a specialty practice because of more secure revenue sources and a lack of dependency on referral. To put it simply, a specialist does not “own” their patients as much as a general dentist does.
  • Active patients: While not heavily weighed, the number of active patients within a practice is also factored in when determining a practice’s value. It is important to note an active patient is considered someone seen within the past 12 to 18 months, even if the individual was only seen once.
  • Growth potential: A bank generally will not loan primarily on what a practice can do, but the growth potential is factored in determining the value. Is there opportunity to add more treatment rooms to your space? Is your city growing? Is there a new complex being built next door that will drive additional patients?
  • Patient attractions and retention rates: Each valuation should consider the number of new patients the practice sees on a monthly/annual basis. In addition, are you retaining your patients, or do you have a high attrition rate?
  • Reason for practice sale: While it may seem unfair, the reason you are selling your practice can also play a part in the value it is given. For example, are you selling because you are suffering from a medical condition that doesn’t allow you to practice? This type of event can affect the value because the practice will see declining revenues each day the doors are closed.
  • Projected patient retention after practice sale: When investing in an established practice, one factor always considered is if the new owner can expect patients to stay after the change. If a high attrition rate is expected due to the previous doctor relocating a few miles away or the practice has a heavy Delta Dental Premier patient base, the value will be slightly affected for the worse. For this reason, if a higher retention rate is expected (i.e., the current doctor plans to stay on for a while), a higher multiple will be used.
  • Dental equipment: Even though the value of hard assets is not weighed heavily when determining a practice’s value, it is taken into consideration. The equipment value will not be what an insurance company assigns or what you paid for the equipment. It will be based on the resale value (as seen if sold on eBay or Atlas Resell Management). Therefore, the age and condition of the equipment and the technical advancements will play a factor.
  • Office condition: The condition of the office is considered within the practice value. While it is not advised that you do a complete renovation before selling, you will want to make sure it is somewhat aesthetically pleasing. If a buyer must account for a total gut renovation of the space, the value of your practice will be affected.
  • Practice revenue trends and profit margin: The practice value is significantly influenced by revenue trends of the past three years, with the most recent year being weighed the heaviest. For this reason, it is important not to drop production as soon as you decide to sell. Doing so will hurt your practice value. In addition to revenue trends, your profit margin is heavily considered. Accurately determining a practice’s profit margin takes a high level of skill and expertise in the dental industry. Therefore, it is imperative you use a professional who specializes in reviewing dental practices.

What will not affect my practice value?

Here are some factors that will not affect the value of a dental practice:

  • Accounts receivable (A/R): While some companies may factor A/R into your practice value, it is not good practice. A practice’s A/R is constantly changing, sometimes by the day, by the hour and even by the minute. For this reason, the A/R will not be calculated until the day of closing. It is up to you, the seller, to decide if you would like to collect on your A/R personally or sell it along with the practice. Regardless of your choice, a reputable broker will not charge off the A/R. A good rule of thumb to estimate the value of your A/R is to take 85% of the total.
  • Patient overview: Even though the patient overview will not contribute to your practice value, it is still recommended to understand how your patient base is broken up. For this reason, you should not only know your active patient count and the number of patients in recall, but also know patient demographics.
  • Insurance: The insurance plans you accept, as well as the percentage of patients on these plans, typically does not factor into your practice value, unless your practice is heavy Medicaid or the majority of patients are in network with Delta Dental Premier.

What information is needed to determine my practice value?

Several pieces of information are necessary when determining a practice’s value. While the list may appear overwhelming, it should only take about 45 minutes to gather all materials needed. This list includes:

  • Three years of profit-and-loss statements (P&Ls)
  • Three years of tax returns
  • Current balance sheet
  • Production broken down by provider
  • Production broken down by procedure type
  • Total active patients
  • New patients per month for the past 12 months
  • A/R aging report
  • Copy of current lease (if applicable)
  • Employee Rroster with hire dates and hourly wages and benefits
  • Bio of selling dentist
  • Physical observation of office with pictures of equipment (typically performed by PTS staff)
  • Lists of insurance plans
  • Office hours

What’s next?

As mentioned, it is vital to understand the value of your practice before deciding your practice’s future. If you don’t, you will not fully understand your options and will inevitably make an uneducated decision that can affect your entire future. For this reason, it is advised to reach out to a reputable company to perform a valuation for your practice.

For more information about buying a dental practice or selling a dental practice, contact the experienced team at Professional Transition Strategies.

Webinar: The Do’s and Don’ts of DSOs

Click here to learn more about the dental service organization (DSO) landscape and how they are impacting the dental industry. Listen to Professional Transition Strategies Founder and President Kyle Francis and Practice Consultant Kim McCleskey answer some of the most common DSO questions, such as:

  • What is a DSO? Why do they exist?
  • What do they do? How are they funded?
  • Why did they get a bad name?
  • Are they good or bad?
  • Should you work with them directly?
  • What does competition do to offers? Why is leverage important?
  • What is a “silent partner”? What are the differences between a DSO, DPO and DSP?
  • What are the biggest pitfalls we see?
  • Should you create your own?

How to Handle Employment of Your Dental Practice during COVID-19

man holding up glasses

During these uncertain times, it’s impossible to predict when things will go back to the new normal and what that will look like. As a business owner, it’s important to plan for all scenarios while also doing what’s best right now. If you’ve had to shut down shop temporarily, here’s how to handle employment at your dental practice during COVID-19.

Consult HR

Whether you’re operating under a dental service organization (DSO) or as an individual practice, human resource (HR) companies exist for a reason. Is it better to lay off or furlough employees with the expectation of coming back? Should you find work for them to do part-time from home? An HR expert will have answers to all these questions and more, so take advantage of their services.

Review state labor laws

State labor law websites are constantly being updated with new rules for unemployment and paid time off. Because each state has its own set of guidelines that are evolving with the current climate, it would be impossible to list all the scenarios here, so consult your own state’s labor law website as you need guidance going forward.

Consider federal laws

In addition to individual state laws, regulations are being put out on a federal level that cover the best interests of both the employer and employee. The U.S. Family and Medical Leave Act (FMLA) has options for parents trying to juggle childcare, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) provides relief for those businesses in the health care field, and the Small Business Association (SBA) provides resources to those who have had to shutter their doors indefinitely.

Communicate clearly

Chances are, your employees have all the same questions you do but fewer answers. Once you have a clear path forward, make sure you are communicating with them often so everyone is on the same page. Setting expectations up front as best as you can will make an easier transition once you are able to open your doors again.

What’s next?

Contact the experts at Professional Transition Strategies to figure out your next steps forward and the resources to get you there.

Why Now Is a Good Time to Join a DSO

men shaking hands

During these uncertain times, you may be hesitant to make a drastic change. But now more than ever, dental service organizations (DSOs) are looking for private practices to purchase in spite of economic standings. Banks are still lending, and DSOs are still buying. Here’s why you should consider selling your practice to a DSO in the foreseeable future. 

Buyer’s choice

New buyer groups have emerged in light of the recent changes. Fewer legacy DSOs will be buying practices at this point as they need to concentrate their efforts on managing the ones they have. Smaller DSOs, Small Business Investment Company-backed DSOs, new private investment-backed DSOs and family office-backed DSOs will emerge as frontrunners when it comes to buying. 

Act now

Deals now will receive 2019 values thanks to earn-outs in the next year, if not sooner, while those that wait will see a lesser value. Waiting puts at risk lesser values in 2021 since 2020 numbers will weigh heaviest during the valuation process. What’s more, tax rates are expected to double. It’s easy to forget that cash is kind in times of need. 

Benefits

Partnering with a DSO means support with operations, marketing, research, purchasing, recruiting and, above all, a guaranteed exit strategy, among other reasons — all of which are needed more now than ever. 

Targeted states

DSOs have identified the following states for possible purchases: Arizona, Colorado, Florida, Georgia, Indiana, Ohio, Rhode Island, Tennessee, and Virginia. Other states include Arkansas, Connecticut, Delaware, Illinois, Iowa, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, North Carolina, Pennsylvania, South Carolina, Utah and Wisconsin. 

What’s next?

Contact the experts at Professional Transition Strategies to get a prospectus done and figure out if selling to a DSO in these times is the right course of action. 

How to Maintain Attrition During a Dental Practice Transition

dentists working on patient

Confidentiality is key during the dental practice transition process, especially when it comes to maintaining attrition rates of both patients and staff alike. Buyers and sellers may be equally excited to pass the proverbial torch, but if not done properly, both parties will suffer the consequences. Here’s how to handle the transitionary period to make sure all involved are on board for the ride.

How to handle

Especially in the case of retirement, it can make financial and logistical sense for the current owner to stay on for a transitionary period to reinforce to the staff and patients that they are in good hands with the new dentist. Limited office hours for a month after the sale will give the seller the opportunity to introduce patients to the buyer and offer advice on operating the dental practice.

How long

The transitionary period typically lasts for three months but perhaps longer, such is the case when selling to a dental service organization (DSO) so the seller can stay on with the practice but wants to release managerial responsibilities. Similarly, since financing and purchase price depend on patient retention after the sale, notifying your patients needs to be done properly and in a timely manner.

What to do

During this time, it is up to the selling dentist to provide introductions in the form of a letter to patients, hosting an open house or writing a newspaper announcement. Not only will all these steps help put patients at ease and afford opportunities to learn about the new dentist, but it also becomes great marketing for the dental practice.

What’s next?

Contact the experts at Professional Transition Strategies to help guide you throughout the dental practice transition process.