Mission Impossible?

Going to dental school is currently an expensive proposition and most young dentists do not think that starting their own dental practice is  desirable or even feasible. While it may not be so desirable, it is not impossible because there are no shortage of dental practices that can be purchased and run as a turn key operation. True they may not have state of the art "brand new" offices but I do not believe that this is a necessary ingredient.

The real "special sauce" is for the purchasing dentist to have the skill set, the personality, the desire and the amount of caring needed to invest in their own dental practice. Probably a new dentist should spend several years practicing before considering purchasing his or own dental practice.

When working as an associate, a young dentist is only "playing with house money" and not their own since all the really large investment belongs to his employer. For some, working as an associate may be the way to go long term, but for those who have confidence in themselves and want to make their own practice decisions, having an equity position ( owning all or part) in a  practice can be their ultimate goal.

When considering purchasing a dental practice, just like buying any other business, due diligence is extremely important. Not all practices are equally valuable. Transferability and profitability of the practice are important considerations. How long of a lease does the office have and is it a favorable one? Is the practice as it is currently constituted profitable enough that it will withstand a 20 (or more) percent drop in earnings if the existing patients do not transfer 100 percent? How many current patients does the practice have ( active patients can be defined as patients who have had an appointment in the last year and a half).  How does the practice find new patients and what sorts of insurance does the practice accept.  Many dentists, who work as an associate,  should be willing to  pay a premium if they are already working in the practice,  since they will have a higher likelihood of having a good transfer if they are already treating some of the patients.

When buying a practice it is normal to want to fix up the facility and make some changes in how the practice runs, but usually a good idea to keep things looking and running the way the  are for at least a year before making changes (no fee increases for sure!). This principle is probably true when taking over any business but for dental practices this is fairly important since this helps reassure  the patients that things, at least for now will stay much the same as before. It helps to maintain the staff if possible because the patients are used to dealing with them and it will help them be comfortable.  They need to get to know and trust the new dentist and it will be easier if the place seems as similar as possible for the first year or two. Patients can become resentful if a new dentist spends visibly large sums of money to upgrade an office or decides to change the entire staff,  because they reason that the fees may go up in order to pay for the changes and they can be uncomfortable with staff changes as well. Also once a dentist has been practicing for a year or two he or she will have a better idea of changes that may be needed before committing additional funds.

Buying a practice can be a good career move especially if the "right" practice is purchased. The right practice should be one in which there is potential for increasing the number of new patients and good retention of existing patients. Also consideration should be made of how the dentist selling performs his diagnosis and treatment planning. If the owner is finding work that the purchasing dentist would not treatment plan, this would be a very good reason not to purchase the practice, since the purchaser may not be able to maintain the level of billing that the dentist was able to generate. The converse is also true... It might a great idea to purchase a practice where the owner was not diagnosing and treatment planning all the dental work that his or her patients need according to a new dentists "standard of care".   If such a practice is bought , over a period of time, the new dentist may be able to expand the billings of the practice for existing patients if they are able to educate the patients of problems they didn't know existed. Also many young dentists have familiarity with performing Invisalign , endodontics, oral surgery and implant dentistry and that  may allow them to  add to the mix of services the practice may offer.

Of course this short blog post is not a comprehensive overview how and when to buy a dental practice, but it is only meant to reinforce the idea that in 2018 buying a dental practice can be still be a good investment and is not impossible even for a dentist paying off student loans. That being said, care should be taken to fully investigate a practice before making an offer and it never hurts to hire a practice consultant to help with the evaluation, since advice from one who is competent can be extremely helpful in evaluating whether a practice is worth the purchase price or not.




from Ask Dr. Spindel - http://lspindelnycdds.blogspot.com/2018/08/mission-impossible.html - http://lspindelnycdds.blogspot.com/