Tips for Buying a Dental Practice in 2021

With the new year just around the corner, almost everyone in America is anxiously awaiting the end of 2020 and anticipating the beginning of 2021. It can only get better from here, right? Though the global pandemic may have caused changes in various industries, dental practice transitions are still going strong. Dentists continue to transition their practices, and some markets are even seeing an increase in buying and selling. If you’re thinking about buying a dental practice, don’t let current worldwide events be a reason to delay. The market continues to be strong for buyers, and lenders are still willing to loan the money for such transactions. Dental practices have some of the lowest loan default rates at around .03%, meaning many banks see it as a high gains, low-risk opportunity.

But don’t run off to the bank just yet. There are a few changes you should make note of if you’re thinking about a dental practice transition.

One significant change we’ve seen? Different banks are using different criteria and lending methods than they’ve used before. Here at ddsmatch Four States, we’ve noticed that each bank is different in their approach. If you call a local or regional bank, you’re going to get one method. If you call Lendeavor, it’s another method. If it’s Bank of America, it’s another method.” 

We’ll go over some of these changes so you can have realistic expectations about the current economic situation, and you’ll be steered in the right direction for your dental career. 

Reasons Why We’re Seeing Shifts in Bank Lending

It’s probably not a shock to you that banks are choosing to loan based on new criteria, but it is helpful to know exactly why. This information can allow you to figure out your financial plans for the future and guide you forward. 

Most people view the Bank of America as a dependable financial source for dental lending. In fact, in a recent Dental Economics article, Bank of America reported over 20,000 loans in the year 2019. But in March of 2020 (the beginning of the pandemic panic), Bank of America stopped lending on all new practice loans. The Dental Economics article goes on to explain that many dental practices with existing loans decided to pause their loan payments during this time, accepting the 90-day relief offered by Bank of America. 

A banker employed by Bank of America explained to Dental Economics that, “This is not a fundamental shift in our view of the dental lending marketplace. We simply have to dedicate all our time to servicing the thousands of borrowers who had their loans on hold and ensure they have all the support they need to succeed after opening back up, including help with PPP [Paycheck Protection Program] loans.” 

Out of the 15 largest banks in the United States, Bank of America ranks #2, with $2.16 trillion dollars in assets. Their influence in the dental industry is profound. Therefore, it may seem like other banks would’ve also followed suit and stopped issuing new loans. However, not every lender has reacted in the same way to the COVID-19 pandemic. 

For example, Leandeavor, the second largest lender for dental practices, has taken the opposite approach, and is now ramping up operations and increasing their lending. Sean Simon, Lendeavor’s vice president of credit, told Dental Economics, “Our outlook on acquisitions, and more broadly, the dental industry, remained bullish even at the height of the shutdown. We expect practices to remain more resilient than nearly every other industry in small business during a post-COVID recession . . . The PPP program caused most banks to divert all available personnel to areas that would help support processing PPP applications. We didn’t have that same limitation.”

The good news is, the dental industry is not suffering from the effects of the pandemic in the same way other industries are. For example, in the leisure and hospitality industry, 68.89% of people faced either a reduction in hours, a workplace closure, or a layoff due to COVID-19. The food services industry saw 63.83% of workers experiencing closures, layoffs, or reduced hours. Both the construction industry and the retail industry have also been hard hit as non-essential construction projects have been postponed and stores have had to reduce their hours or switch to curbside delivery for a lengthy period of time. 

Not everyone needs to go on a vacation, eat at a restaurant, or buy a new shirt, but almost everyone needs to go to the dentist on a regular basis. Right now, dental practices are averaging 76% patient volume as compared to their pre-pandemic levels, and “staffing in dental offices was at 90% of pre-pandemic levels and one-third of dental practices reported ‘business as usual’ in terms of patient volume.” — (from an HPI poll by the ADA)

The health crisis has proved that the dental industry is able to flourish and acclimate to new circumstances. As new state and local regulations for infection control came out and strict guidelines for social distancing were implemented, dental practices around the country handled these new challenges with ease, putting patients’ safety and well-being above all else. 

Keep Calm, Press On, Be Patient

Given the new changes in both standards of practice and lending, don’t be discouraged if one lender decides to decline your application. Because each lender out there is doing things a little differently, you may be turned down by one lender only to be approved quickly by the next. If you are considering buying a dental practice, you can still get a loan, it may just take more time and patience. If at first you don’t succeed, try, try, again!

It’s not always easy to keep putting yourself out there, and it can be disheartening when banks tell you “no”. Sheryl Garfinkel, of ddsmatch Mid-Atlantic, told of an experience with one buyer who went out to four banks: “He went to a local bank that was non-dental. He went to Bank of America, which is basically not lending right now. Then he went to one that looks at the rolling 12 month financials, taking the COVID shutdown months as part of those numbers…so he was not getting approved. So he concluded, ‘I guess I just can’t buy this practice.’ He was discouraged about the prospects because the bankers wouldn’t lend on the practice, but he didn’t understand the landscape. He wasn’t willing to call another lender that we knew would lend, as some lenders are basing their potential analysis off of pre-COVID numbers.”

When your loan application is rejected over and over again, just remember to be patient and persevere. Once you have your loan application completed and all your documents in order, it’s just a matter of time before one bank decides to approve it. 

While the banks are taking different approaches—and some are clearly more risk-averse than others—they are all essentially looking for the same information. One bank might say, “we want to look at the financials from the last 12 months,”  which obviously takes into account three months during which the practices were closed. That’s pretty conservative when compared with another bank that wants to look at 2019 and compare it month to month. But they all want to see that the practice is back to closely earning what it was doing before the pandemic.

When it comes to sending out your loan application, trust the advice of your experts and press forward when the going gets tough. Most importantly, don’t give up!

Prepare Yourself for a Longer Process

Just like the housing market crash in 2008 caused banks to look much more closely at home loan applications, you should prepare for the fact that your bank will go over your application with a fine-toothed comb. They’re going to study and survey your application from every angle to make sure you have the financial capability to pay back your loan. They’ll look much closer at your production ability, liquidity, and your overall global cash flow.

Lenders are asking “How qualified is the buyer, and then, how qualified is the practice? And how do those come together?” If a doctor who is producing $300,000 a year is looking at buying a dental practice that produces $1,000,000—they are going to have a problem, because they can’t do the work. Lenders will say, “You’re not going to be able to fulfill the numbers that we’re used to seeing in order to vet this practice.” So, you may have a buyer in this marketplace who in the past would have qualified for this practice, but might not qualify now due to productivity concerns.”

Lenders are also taking a loan applicant’s cash liquidity more into account. They’ve gotten a bit tighter with their guidelines. They might say, “We need between five and ten percent liquidity in the bank”—meaning they want that much cash relatively easily available to the buyer now. The buyer won’t have to put this cash as a down payment, but simply show it is available to them if needed. In the past lenders might have been a little loose about how much you needed exactly, and how easily you could access the funds in a pinch. However, now we’re seeing that they are being very specific and applying clear criteria, such as, ‘You need to have 10% liquidity.’”

We also have seen a change with what the banks want in terms of global cash flow (an analysis used by lenders to assess the cash flow of a business to get an overall picture of its ability to service the proposed debt over time). Global cash flow looks at the dental practice earnings, its expenses (including the doctor’s and staff salaries), and its projected ability to have enough left over to repay the practice loan. Essentially, global cash flow is a ratio of the number of times the financial obligations of a dental practice is covered by its earnings. A ratio of 1:1 or higher indicates a practice in good financial health; lower than that is typically an indicator that bankruptcy could be on the horizon.

In the past, banks looked for a global cash flow ratio of 1:1.2 for dental practices. This translates to the buyer being able to meet all of their financial obligations, including the practice loan, and still have money to spare. When dealing with lenders currently, the ratio is now between 1.25 and 1.4.

Each Bank May Request Different Criteria

When buying a dental practice, keep your documents accessible and in order. When we here at ddsmatch Four States look at the larger picture, the surprising thing is that each one seems to be doing things slightly different than every other. Some are doing things a little bit more drastically different than others. This can range from “We’re using 12 months of financials rolling,” which cuts right through the shutdown COVID months, to, “Hey, we’re doing business as usual and as long as everything seems in line, we’re fine. We just want to know that the practice has a plan for handling COVID and getting back to where they were pre-pandemic.”

These latter lenders, in general, are looking at month-over-month for 2019 versus 2020. They want to know how the practice is growing. They’d simply like it to be back to 80% to 85% of where the practice waspre-COVID, or possibly higher, depending on the bank. Some banks are looking at a production level. Most banks are looking at a collections level—the actual money they bring into the practice.

If national, well-known institutions like the Bank of America refuse your loan application, your next step should be to check out a local or regional bank. Smaller banks are sometimes able to be more flexible, because of the level of personal relationships and the fact that, to them, your story matters—it’s not just numbers, numbers, numbers. Although, when it really comes down to it, the numbers do have to support the loan because they’re in the business of risk management.

Thinking About Buying a Dental Practice? ddsmatch Four States Has Practices Available

At ddsmatch Four States, we know you have a certain vision for your future professional life, and we want you to achieve your career goals. We serve dentists looking to buy or sell a practice in the Kansas, Western Missouri, Arkansas, and Oklahoma areas. For more information on our available practices, or if you have any questions, contact us today!

Before You Buy a Dental Practice, Hire a Dental CPA

Are you ready to buy a dental practice? Just like buying a house, when you take this big step forward, you have to have a plan, and you have to know the right questions to ask to make the best decision for your future. It’s important to do your “due diligence” before you buy a dental practice, so you know exactly what you’re getting in terms of the true value of the practice. True value includes all the assets and liabilities that come along with the business. It’s imperative that you know just what those are so you can have a proper understanding of the practice’s commercial appraisal. 

A successful transaction will depend on who you talk to and rely on for information pertaining to the sale. It’s best to have an experienced professional you can trust who knows the full particulars of the dental practice industry. It’s especially helpful to listen to the advice and guidance of a dental CPA who has been through the process many times over.

Recently, we had the opportunity to speak with Matt Howard of Blue & Co., to ask him what a seller and buyer should know before going into the process of buying a dental practice. Howard is a dental CPA, an accredited business valuator, and a certified valuation analyst. Blue & Co. is the third-party non-biased valuator that we use here at ddsmatch Four States. Howard is the team leader for their business valuation team. Blue & Co has the right experience to give you a true value of the dental practice you are considering. They look at many different aspects of the practice to ensure the price is on point for both the buyer and the seller.

Understanding Business Valuation 

How do dental CPAs figure out the true market valuation? Howard explains that it’s a multifaceted process, 

“We’ll collect data, we’ll go through the data, we’ll enter it into our models. We’ll ask very specific questions about that data, about some maybe aberrations in the financial performance over time. Sometimes a dental supply category jumps 10% over a year. We want to really understand everything that’s going on inside the practice.”  

During the valuation process, a dental CPA will look at any irrelevant costs that may look like “noise” in the valuation reports. Howard says that’s, “anything that’s inside the practice that is not necessarily operational, or is basically something that the owner has decided to do at the practice that doesn’t exactly reflect the operations of the practice . . . a lot of times a seller will own the building, and in owning the building, they’ll pay themselves a leased rate for that building. And sometimes that isn’t a market rate. Sometimes it’s a little bit above, sometimes it’s a little bit lower. And so what our job in this process is, is to really help really work through the practice financials, the historical financial statements, and just basically help sanitize or normalize the numbers as we see them. And as the true operations of the practice are reflected.” 

Working with a dental CPA, you can be assured that you’re only paying for the true value of the practice and not the “noise” that won’t benefit you in any way. It’s not easy to decipher this on your own, so an experienced CPA is invaluable in these types of business measurements.

Should I Start a New Practice Instead of Opting to Buy a Dental Practice?

While it may seem like a good idea to start building a business from the ground up rather than taking over a practice from another doctor, your pocketbook will most likely disagree. Beginning from scratch means you’ll have to invest both capital and time, and be patient for years while your practice starts to grow. Not to mention all the things you’ll need to do before you can even open, like securing office space, purchasing equipment, finding employees to hire and train, and marketing and advertising to attract patients to your practice. 

However, when you decide to buy a dental practice that’s already established, Howard says, “You’re walking into cashflow day one.” Starting a new practice means you’ll accumulate a significant amount of debt compared to buying an existing practice. Howard describes why, “It’s a three- to sometimes seven-year journey to maturity or average collections of [a new practice]. So basically what I’m saying is the first year, you’re probably going to feed the business, as in bringing money to the table to keep it going as you build up that collection stream. The second year you might break even or maybe pay yourself a little bit, but definitely not up to industry standards. The third year, between the second and third year is generally, during these startups, where we see you making some progress towards paying yourself a reasonable wage. It’s still probably not [the industry standard], what you could get out being an associate at another practice, but you’re on your way. And then . . . [the] fourth, fifth, sixth, maybe up to seven years, will get you hopefully up to average.”

At ddsmatch Four States, we match up selling and buying doctors so you can obtain a practice that already has an established client base and that you won’t have to go into so much debt from the get-go. Our goal is to provide you with the right infrastructure to help you achieve your career goals.

Is a Dental Associateship Right for Me?

Taking over an existing practice may not be the right move for you in your career just yet, and a dental associateship may seem like the more attractive option. If you plan it out carefully, an associateship allows you to try out ownership without going into so much debt upfront. Just be sure you know exactly what you’re getting into and don’t be afraid to ask hard questions before you say yes.  

Howard explains, “Every practice has a limited amount of resources, of ops, of time for the staff to not hit overtime. So there’s a lot of variables at play here. Typically, we like to see over a $1.2 million collection practice in general. That way that there’s plenty of room for an associate to come in, inherit some of that revenue stream, as in, hopefully the seller wants to back off a bit and transfer some of their patient base over to the associate.”

Say you find a practice that seems like a good fit, but they aren’t ready to take on an associate just yet. It’s probably best to look elsewhere rather than wait around. You don’t want to end up in a situation where you don’t have enough work or aren’t making a full salary while your debts continue to pile up. Before agreeing to anything, look closely at the practice and see how many patients they have, how far in advance they’re booking patients out, and what their revenue stream is like. If they can’t book patients until two or three months in the future because their schedule is so tightly packed already, it might just be the right fit for you. 

It’s unwise to accept an associateship that doesn’t give you a fair deal. You should expect a guaranteed salary for the first little while, maybe even for the entire first year. After that point, your compensation will most likely be based on a production or collections-based system. Outline your terms with the dentist you’ll be working with and be sure you’re fairly compensated.

If you begin an associateship and things don’t work out quite how you planned, that’s ok. Not every single job is going to be the perfect fit every time. Just don’t let it throw you off course. An associateship is a good step in the right direction towards owning a practice, and you can learn valuable lessons no matter what the final outcome may be.  

What is Asset Allocation?

Asset allocation is definitely a contributing factor in the buying and selling of dental practices. 

When you have a practice that is successful, it’s built not only on hard work and smart financial decisions, but also on the goodwill that has been cultivated in the community. How that goodwill is valued will have an effect on what you’re buying. Though it may not be tangible, it’s the thing that keeps patients coming in the door, so don’t discount it. 

There are two main reasons why asset allocation is important. First, it makes a big difference in the money that is exchanged to the seller that is theirs for the keeping. Howard explains this concept further, “The million dollar price is great and all. However, it’s not about what the price is, it’s about what you keep. And obviously what I’m referring to here is taxation.”

Second, you need to acknowledge the goodwill fostered in the community when measuring the true value of the practice. Most likely the selling doctor has poured their blood, sweat, and tears into their practice and they regard it as their legacy. Their patients appreciate them and trust them, and may have been seeing this doctor for many, many years. 

The sale of tangible assets will be taxed as normal income at the ordinary rate. Assets allocated as intangibles, such as goodwill, are taxed at the more favorable capital gains rate. So the more value allocated as goodwill, the more money the seller gets to keep. For you, everything you are buying—equipment, furniture, or goodwill—you will be able to write off through depreciation over time. But for the seller, it’s either money in their pocket or lost to taxes. 

It’s a mistake to just look at the clear cut financial costs and gains of the practice without taking the time to consider the goodwill and time the previous owner has put into it. Their practice is their life’s work, and they’re way more invested in it than you are at the point of sale. When you’re negotiating asset allocation, do it in a way that gives the selling doctor the true worth of what they’ve built. That way when it comes time for you to pass the practice on to the next dentist, you can help create an outcome that works for both you and the buyer. 

Preparing to Buy a Dental Practice

Howard suggests four main things that you need before you can consider yourself ready to buy a dental practice. The first is hand speed. Basically you need to make sure you have the skills to keep producing the steady profits the practice has gained, and also have enough time and energy to devote to things like documentation.

Second, be sure you have your own financial cushion. Howard says banks like to see that buyers have “some sort of margin in their life . . . that sounds very logical, but a lot of times a buyer is not a good candidate because they don’t have any kind of safety net in their life.”

Third, you really need to know what you are looking for in a practice. Sure, you already know you want to own a practice, but create in your mind an image of “what area you want to be in and what that practice might look like.” Your lender and the selling doctor will want to know that you are “fully vested in buying in a certain area for a specific purpose with a certain clinical skillset.”

And, fourth, surround yourself with a good team of advisors you can count on to help you throughout the process. The bare minimum should be an experienced dental CPA and dental attorney that you can trust. These advisors will “help you understand the logistics of the transaction and how to structure it. But really, beyond that, if you have the right people on your team—as advisors, we’ve been through this a hundred-plus times, so just helping you through that is part of what we do.” 

With the right people there to encourage and support you, you’ll be better prepared to make the right decision about the practice your choose to buy,

Ddsmatch Four States Has Practices for Sale

If you are considering buying a dental practice in the Kansas, Western Missouri, Arkansas, and Oklahoma areas, we’re here to help! Check out our listings! You can set up a free profile on ddsmatch.com that will keep you up to date about available practices. Contact us today about potential matches.  

Buying a Dental Practice is Made Easier with ddsmatch Four States

Once you’ve graduated from dental school and worked for a few years, you may feel like it’s the right time to invest in your future by buying a dental practice. This process can seem daunting at first, especially if you’re new to an area and don’t know where to start looking. It’s not as if dentists put up “For Sale” signs in their windows when they’re thinking about retiring. At ddsmatch Four States, we make the dental practice transition easier. On our website, you can view available practices and see which practices might fit your criteria. Though we typically represent sellers, we also have a lot of helpful resources that can benefit potential buyers.

When you’re searching for the right practice, our search function allows you to search by associateships, partnerships, practices available for merger, or dental practices for sale. You can specify where the practice is located and how big or small you want it to be. Using a personal profile, you’ll be able to see location, revenue, number of operatories, staff size, if they have digital radiography, if they have cone beam imaging, information on the local area, and other information to help you know whether a particular practice meets your needs. 

You can trust the expertise of ddsmach Four States to lead you in the right direction. If you’re just beginning your search and are unsure how to get started, our tips below can help you find the practice that will match your qualifications and your lifestyle.

What Type of Practice are You Searching For?

In order to narrow down your options, you should figure out who you want to be in the practice. Are you interested in being the individual buyer, or do you want to buy into a partnership? Maybe becoming an associate sounds like the right path for you. 

Whatever your ideal situation may be, ddsmatch Four States can help you find the perfect fit in the Kansas, Western Missouri, Arkansas, and Oklahoma areas. Keep in mind these other factors as you browse different dental offices.

  • Insurance. Are you willing to see patients that only have insurance, or are you happy to provide services to those without? Whether you process payments as a fee for service, PPO, HMO, or Medicaid, your business model is important and could determine who your clients are. Patients won’t be happy if you buy a practice and decide to only accept half the insurance plans the previous dentist accepted before. You’ll probably lose a lot of business that way.
  • Atmosphere. What kind of environment do you want to cultivate in your practice? Are you satisfied with the atmosphere the previous dentist and their staff created, or do you want to affect positive change? Some patients won’t come back if they feel unwelcome or have a negative experience  in your office, so think a lot about the type of atmosphere you want.

Don’t spend as much time worrying about the real estate aspect of buying a dental practice. In a recent interview with Dr. Howard Farran, founder of Dentaltown, Thad Miller, the founder and president of ddsmatch, explained why real estate might not matter as much as you think. “In Indiana and Louisville . . . there’s a lot of dentists who own their own building . . . Whereas maybe [in] Los Angeles, Chicago, some of the bigger cities, Atlanta, they may not own their building as much and . . . you’ve got to weigh what does that real estate do for you?” 

When you own the real estate, you can take advantage of certain tax benefits, but you’ll also be paying more upfront at the time of transition. And even if a selling doctor decides to transition their practice, they may want to hold onto their real estate and have you continue to pay rent to them. Discuss with your advisors the advantages and disadvantages owning or leasing the office.

Buying a Dental Practice: Location, Location, Location

Why buy a dental office in a town or city you don’t like? Before you buy, you should narrow down your search based on the following criteria:

  • Your Commute: Think about how far you’re willing to drive to get to work. If you already own a home, are you ok with an hour long drive to and from work each day? Or (if you’re renting), is the dental practice located in an ideal area that you’d want to live close to?
  • Lifestyle: The town or city you live in can greatly influence your personal happiness. Are you into trying new restaurants and going to the gym every day? Is it important to you to have family-friendly amenities located nearby? Buying a dental practice is an investment that considers careful planning. If you can, check out the area before you buy.
  • Expansion Opportunity: Are you satisfied with owning one practice, or do you hope to eventually open up additional locations? If the practice you buy is in a small, rural town you may be limited in your expansion capabilities, so consider your future plans for the business.

Thad Miller explains that where a doctor wants to practice needs “to be a match for how they want to practice, too.” There are significant differences between urban, suburban, and rural practices, in terms of overhead costs, potential patient base, and profitability. He elaborates that “there are more profitable practices in rural parts of the States because it’s a percentage of dentists per patient, correct? So with these DSOs not setting up in these rural areas, there’s less competition.”

Miller advises young doctors to consider what their ideal schedule would be and how they want to run the practice before they buy it. “. . . If they want to go from 6:30 in the morning until 3:00, two days a week and they’re home by 5:00, they can do that. You own your business. You can make those changes. If you want to see your son’s tee-ball practice on Wednesdays, don’t work Wednesdays. Work Fridays or just go from, like I said, 6:00 A.M. to noon. That’s what’s great about dentistry, you can do it a little differently than other people and still be very profitable. You just got to weigh how many patients you’re working on.”

How Much Financing Do You Qualify For?

You may browse the list of available practices and be wowed by an office with a large staff and even bigger office. But just remember that you are limited by financing when you buy a dental practice. Before you set your sights on a certain practice, figure out how much you can afford to spend. Wondering how dental practices are valued? Dental Economics has an excellent blog post explaining the basics of practice valuation that can help you crunch your numbers.

Our team at ddsmatch Four States offers trusted dental practice valuations conducted by a top-rated, third-party accounting firm. In addition to this practice valuation, we also offer a clinical appraisal through Dr. Charles Blair’s Clinical Treatment Analyzer that helps identify opportunities to increase revenue that the selling doctor may not be currently maximizing. To perform your due diligence as a buyer, you should carefully review all of this information.

Though we may not represent buyers, we have extensive references we can give you for trustworthy dental practice lenders. Miller explains that ddsmatch brokers “have relationships in every area . . . so they’re going to actually work with these individual buyers and banks. If it’s national banks, if it’s regional banks, or if it’s local banks, we do a lot of that in our process.”

Most knowledgeable lenders are willing to loan dentists the finances they need. It’s regarded as a favorable investment because of extraordinarily low default rates. Even so, banks will want to be reassured that you can keep up with the production schedule necessary to cover the costs of the practice and service the loan. Dr. Howard Farran of Dentaltown, observes that “the big banks are telling the graduates who just walked out of school . . . that you needed at least a year’s experience before they’ll even talk to you.” Miller explained that the banks are “not as concerned about the debt as they are with the speed of the dentist keeping up with the practice, being able to do the procedures that the selling dentist has. If they work for a year, that usually gets them over the hump to where they can keep up with the hygiene schedule. They can do the restorative and be able to keep up with the schedule. That’s their biggest concern. It’s not necessarily the debt as much as it is the speed.”

Transition Process

When you begin the process of buying a dental practice, one thing to keep in mind is how you will transition into your new role. Do you want the doctor who is retiring to stay on for a few weeks after you take over for a smoother transition process? Is the former owner willing to help you, or would they rather take off as soon as the deal’s finished? If you’re just starting out as a dentist, you may want that extra assistance in the first few weeks, or you may feel able and ready to do everything on your own. Think about the pros and cons of the different types of transitions before you buy. Clear communication from the get-go can make or break a dental practice transition. 

Buying a Dental Practice is Easier With Help from the Experts

Most people who buy a house work with a realtor because they have the experience and knowledge to help make the process easier. Buying a practice may not be exactly the same as buying a house, but without the help of a transition representative, it can quickly feel overwhelming and complicated. Thad Miller says that “the buyer needs a representative” just as one would have in a legal or real estate transaction. He explains: 

“It’s important to build your team. And most of the people that I encourage them to work with, they’ll sit down with [the potential buyer] in advance and they won’t charge them to talk about how they do things. They don’t need them until there’s an opportunity . . . Even if they’re not ready to buy right now, they need to build their team. 

“I had a great practice that was in high demand, we had six or seven people that wanted to buy this practice. And the dentist who took my advice—that had a team—he sat down with the selling dentist who needed to sell. He was actually ill, he had cancer and he needed to sell, but he had a great practice and he wanted it to go to the right person. 

“The person who sat down and said, “I’ve got an attorney in place, I’ve got an accountant in place, and I’ve got my bank financing in place. I would love to buy your practice,” that’s what sold my seller . . . Because they were ready. Because he knew he could move quickly, he knew he wasn’t just kicking tires, he knew he was ready.”

Buying a dental practice can be a complex transaction, and having the right kind of support is exactly why ddsmatch Four States clients enjoy such a positive process. An experienced specialist can help you navigate all the myriad financial and legal aspects that come along with the sale. You may not be able to identify potential problems and opportunities, but a transition specialist will. Their guidance and advice can help you avoid costly oversights and errors.

ddsmatch Four States Has Available Practices Right Now

At ddsmatch Four States, we help dentists and even dental students stay informed of available opportunities and industry conditions in their desired areas so that when the time comes to buy a dental practice, they have all the information they need to make it possible. 

Though we only represent selling doctors, we want everyone involved in the dental transition to leave satisfied with the results of the deal. We’re only happy when our client is happy and the buying doctor is thriving in their practice. 

Keep in mind that when you purchase a practice, you’re not just buying office space, equipment, and files. You’re taking over a legacy that the selling doctor has built over a lifetime. Most of our clients want their practices to continue to be an important part of their community, and even to grow beyond what they built themselves. 

We believe that we achieve success through our fair and transparent processes and straightforward communication. Our goal is to find compatible matches for both the buyer and the seller. At ddsmatch Four States, our clients continue to trust us because we provide them with the information and resources they need to make successful transitions. We’d love to help you, too.

For more information about our available practices, check out our listings, or contact us today.

Why Now is a Good Time for Buying a Dental Practice or Selling Your Dental Practice

Right now it may feel like everything’s on hold. Schools are starting later, bosses are encouraging their employees to work from home as long as possible, and some small companies are choosing to remain closed. But dentists’ offices are an essential business, and patients will continue visiting their dentist despite whatever’s going on in the world. If you’re thinking about buying a dental practice, the dental industry has actually fared rather well in the current economic climate. 

Thad Miller, the founder and president of ddsmatch, recently stated that “most of our clients have had an incredible June and beyond and it looks good going on . . . We’re seeing really good results.”

As many older dentists are contemplating retirement and looking to sell soon, this is a great time for younger dentists who are ready to take over a practice and make it their own. At ddsmatch Four States, we specialize in dental practice transitions and we know the ins and outs of the market. Here are a few reasons why we think it’s prime time to buy or sell. 

Buying a Dental Practice: Why Now is an Ideal Time

Practices all over the U.S. have been impacted by the pandemic in different ways, and the numbers show just how much. Dr. Howard Farran, the founder of Dentaltown, recently reported that between 1999 and 2019, on his site, “there [were] usually about 1,000 classified ads of a dentist selling their practice and about 5,000 ads of dentists looking for an associate.” “Now,” he says,” it’s 2,000 dentists selling their practice with only 1,000 jobs.” 

At the beginning of the pandemic, most dental practices shut down for a period of time while they weighed the risks and benefits of reopening. With no revenue except the occasional dental emergency procedure, many practices that may have had three dentists on staff had to cut down to only two or one. This left a lot of doctors jobless who are now forced to find employment elsewhere.

At the same time, older doctors who were already thinking about retirement have started moving up their timeline. Instead of dealing with the hassle and expense of redoing their sterilization procedures, buying new equipment, or adjusting their office practice methods, they now want to transition their practice to a younger doctor who can handle the new changes. 

Thad Miller notes, “There’s going to be opportunities out there. We all know that the baby boomers in our society are retiring in all different sectors. In accounting, in legal, in appraisers, whatever it may be. There’s a large group of our population that are retiring and there’s fewer buyers because there’s just the mass number of dentists that are transitioning over the next ten years. I think there’s opportunity out there.” Dentists looking to own their own practice can take charge of their career and examine their different options.

As part of our services, ddsmatch Four States provides Dr. Charle’s Blairs Clinical Treatment Analyzer report, showing the opportunity in a practice. As Miller explains, for instance, “The dentist who’s selling, they stopped doing root canals 15, 20 years ago, and they stopped doing oral surgery.” The Clinical Treatment Analyzer report allows dentists to find ways to increase their profit margin in a practice that’s already successful, without increasing the sale price.

Why Should I Sell My Dental Practice Right Now?

WIth the influx of younger dentists ready to jump start their career by buying a dental practice, you may have a lot of interest from buyers. You should make sure your office is up-to-date so you’ll get what it’s worth. Here a few tips if you’re looking to sell your dental practice for a competitive price.

Cosmetic Updates

The last thing you want is for interested buyers to decide against buying your practice based on how it looks. There are simple, cosmetic things you can do around your office to make it look brand new. Replacing the flooring and adding a new coat of paint are both excellent, inexpensive ways to modernize your practice. You should also re-evaluate how you’re using the space. Could things be switched around to provide more patient rooms? Could cabinets be cleaned out to allow for more storage? If you want to update your office but you don’t know where to start, getting a consultation from an interior designer in the area can also be a good first move. Making your office appear warm, welcoming, and professional can entice both patients and buyers.

Equipment Updates

No young dentist is going to want to buy your office if you’re using old equipment and outdated systems. If you haven’t gone digital already, now is the time to do so to get the price you want. Most dentists today are trained only on digital systems and won’t want to use antiquated processes that are no longer feasible.

Get a Website

New patients searching for a dentist are going to Google search your office and look at your website before they make a decision. That goes for buyers, too. A simple website with basic information about your practice and your staff and a way to contact you will suffice. You may also want to mention your sterilization procedures and how you’re handling office cleanliness and patient appointments while the pandemic is on-going. If you don’t know anyone who can create a professional looking website, ddsmatch Four States can refer you to companies who can create a basic website for you that will fit within your budget.

Why Dentists Choose the ddsmatch Four States Dental Practice Transition Specialists 

Expectations and Transparency 

Whether you are thinking “It’s time to sell my dental practice,” or considering buying a dental practice, ddsmatch Four States can help you achieve your dental practice transition goals. We specialize in dental practice transitions with our years of expertise and ability to read the current market.

Our goal is to find the right match for both the buyer and the seller. We promise openness and clear communication throughout all the transitions we handle, so there’s no confusion or misunderstandings. We understand that when it comes time to sell your dental practice, you want your legacy protected. That’s why we won’t stop working for you until everyone involved in the transition is satisfied with the end result. We want each dental practice transition to be a win-win, and we accomplish this by focusing on realistic expectations and transparency.

First, we’ll issue you a comprehensive letter of intent with details about what to expect from the business deal. As Thad Miller explains, “We have about a five page letter of intent, which was unique to the industry nine years ago, where they usually just got a price and then they kind of fought about everything until closing.” 

He explains further that in this letter, “we address every single thing that’s going to go on in the transaction, from the price, to the asset allocation for taxes. What are we doing for real estate, the lease, the breakdown of what they’re buying and what they’re not buying, non compete . . . all in writing, ahead of time. Even though a letter of intent is a nonbinding agreement, we want that expectation set for our buyer.”

Second, we use our Trusted Transition Process in every deal we close. We want the buyer to know all the ins and outs of the practice they’re buying without any hidden details. We also add a business valuation from Blue & Co. and their team of certified valuation analysts. These analysts are CPAs who have undergone additional training and focus solely on business valuations. Each buyer will receive a detailed 70-page report that outlines all the financial aspects of the practice, looking at production, collections, taxes, overhead, etc. We want the buyer to understand why the practice is priced right. 

Opportunities for Buyers

Our main priority at ddsmatch Four States is to represent dentists who are selling, but we still have a lot to offer buyers searching for the right practice. After creating a quick profile, buyers can browse through the listings on our website for free! Our website will track practices in the areas you’re interested in and let you know of available opportunities that pop up. 

Even if you’re not a practicing dentist yet, you can stay informed of the market conditions in your area so you’ll be able to take advantage of good opportunities when they come along. We’re a great resource for dental students and qualified dentists alike. Thousands of dentists have registered with us so they can keep up to date on practices when they go on the market.

The search function on our website allows you to search by associateships, partnerships, practices available for merger, or dental practices for sale. You can filter both the location and the size of the practice. Once you log into your profile, you can also see location, revenue, number of operatories, staff size, if they have digital radiography, if they have cone beam imaging, data on the local area, and other information to help you know whether a particular practice meets your needs.

We believe confidentiality is imperative to protect our clients’ interests, so you’ll notice we don’t use any doctor names on our website. This helps us safeguard both the transitions that are currently in process and the dentists we work with.

Putting your dental practice up for sale is a life-changing decision, and we want to help you through each step of the process. We’re satisfied when both our client and the doctor buying a dental practice are happy with the outcome. As Miller says about our clients, “If they see a patient in the grocery a month after transition, they want to feel good that they don’t have to hide behind a stack of things because they didn’t have a good transition.”

Interested in buying a dental practice? Search our available practices here. If you are considering selling a dental practice, contact us today and find out how we can help you meet your practice transition goals.