Buying or Selling a Dental Practice
Dental Practice Transition Specialist
Buying a dental practice should be one of the most exciting experiences of your lifetime. However, dental schools do not prepare you for this monumental step. Having a practice transition expert like JoAnne Tanner, MBA will guide you through this process can help you avoid the pitfalls of an inexperienced buyer or seller.
The Tanner Dental Transitions team has assisted literally hundreds of dentists during this critical phase of their office ownership. They provide a blueprint for success along with a checklist to make sure you do your due diligence to uncover the critical factors of the sale. They will help you find potential missed opportunities BEFORE the sale, both internally to the business and externally, as well as AFTER the sale.
There are a number of factors that go into determining the sale price of a dental practice, not to mention the dozens of minute details about what happens before, during, and after the sale! Simply looking at gross production or adjusted net profit for a previous couple of years is NOT enough to determine a practice sale price. The current market conditions and the state of the local economy can also play a major factor in what the banks determine is a reasonable price for business loans.
By performing a thorough analysis of the current practice management systems, JoAnne can laser-focus on the most critical details of a sale to provide proper representation on the following:
Practice Vital Signs
Evaluating the key metrics or vital signs helps us determine if a practice is performing as well as advertised to ensure there is no deception. Do you know the key critical financial reports to be asking for during an owner transition? Not checking these critical reports could provide misleading information that could end up costing you tens of thousands of dollars.
One of the metrics we look at is by verifying the number of actual “active” patients and ensuring that new patient intake numbers are accurate and have been consistent. Both metrics are important and allow us to get a bigger picture of what direction the practice is heading in. Knowing exactly what the client base (specifically, the demographics of the practice) looks like will help us determine an appropriate value for the business.
Reviewing specific vital signs and trends such as sources of new patients (word-of-mouth vs. advertising) as well as “retention rate” also shows us which areas of the business have room for improvement. The seller’s business plan and profit statements help us determine if proper steps towards growth were being implemented.
We also take a look at staff training and retention strategies, the array of services offered (procedure code analysis), fee schedules, the ratio of patients who are Fee-For-Service vs. Insurance plan, and finally, the practice Financial Arrangements and Accounts Receivables. These give us an idea of what the businesses’ vitals currently are and which weak spots we can improve.
Transitioning a practice involves a plethora of financial documents and reports that can become overwhelming to tackle, but are crucial to file properly. JoAnne Tanner will assist in evaluating and verifying all documents necessary for the completion of the transition in order to ease the process.
This precision and due diligence ensure that you are checking off every appropriate box and not leaving anything to chance. It is crucial to get the proper support documents involved in the transition process may include:
- Letter of Intent
- Included and Excluded Assets
- Accounts Receivables (whether to buy them or discount them)
- Purchase Price and Asset Allocation
- Outstanding Accounts Payable
- Ongoing Service Contracts with various suppliers, maintenance, labs, yellow pages, medical waste companies, online services, etc.
- How the buyer should best handle any repair or replacement work done by the seller
Understand the Team Culture
Each dental office is unique in how it functions and each aspect of it needs to be measured and therefore managed. Having an experienced practice transitions team can support the right doctor in being successful in their efforts.
Other people to include on your transitions team, can include a CPA, an experienced dental attorney, and a practice broker (required to handle the actual sale of a practice). In addition, having a good relationship with a banker and a dental equipment salesperson will be beneficial.
JoAnne’s personal coaching and guidance extend after the transition process as well. We’ll help address common transitional issues that may seem overwhelming if you lack the necessary support.
After your practice acquisition you can expect assistance with:
- Identifying and presenting opportunities for growth
- Assigning specific training and goals for practice employees
- Coaching and Monitoring team performance during the transition
- Improving Collections workflows
- Increasing patient retention and promoting referrals
- Effective internal and external marketing strategies
- Giving input on when to consider any Capital Equipment purchases
To find out more about how Tanner Dental Transitions can help you purchase or help you sell the ideal dental practice, contact us today. We work with dentists all over the United States. (916) 791-2720 or click on the CONTACT US page to email us directly.