Though it may seem counterintuitive, now is a good time for dental practice transitions. If you are considering buying a dental practice, we’re seeing a lot of increased interest from older dentists who are considering retiring. If you are thinking, “Maybe now is the time to sell my dental practice,” you are not alone. The good news is, we are also seeing an increase of interest from younger doctors recognizing now is a good time to buy.
If you are interested in buying a dental practice, you might be concerned about the current economic state of the dental profession, but the industry is weathering the crisis better than many. 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.”
Dentistry is an essential business, which is being reflected by the public returning faithfully to dental practices as they have opened up. Dentists have long used sterilization procedures and PPE as a regular part of their office procedures. They are trusted to be safe with their patients, and their patients want dental care. As Miller stated about his own experience, “My wife and I haven’t been to a restaurant for dinner—[a] sit down dinner—since March. I don’t see that as essential, but I’ve been to the dentist.”
Why Now is a Good Time for Buying a Dental Practice
While dentistry remains strong, that doesn’t mean that practices haven’t been impacted by the pandemic. Dr. Howard Farran, the founder of Dentaltown, recently reported that between 1999 and 2019, “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.” This impact has played out in two ways.
First, when practices had to shut down, money stopped coming in, making paying employees difficult. When they first opened, many were only doing emergency procedures. Then they were limited by the number of patients they could see at a time. So if a practice employed three doctors, maybe only one was working at first, then two. Practices that may have been considering adding another doctor in January may not be considering one now. Doctors who had been employees and couldn’t last without two or three months income may have moved on to seek other opportunities.
Second, many older doctors, when faced with the expense and effort to respond to the pandemic, have been spurred to consider retirement sooner. They don’t want to deal with the hassle of redoing their sterilization procedures, of adjusting their office practice methods, or investing in new equipment when they were already eying an exit. A dental practice transition that they may have considered being a few years out suddenly looks more attractive now.
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 10 years. I think there’s opportunity out there.” Dentists remaining have a unique opportunity to take charge of their career during this time and move on to owning their own dental practice.
One last point to consider is there may be hidden opportunities in these newly available dental practices. As part of our services, DDSmatch Mid-Atlantic provides insight into additional revenue opportunities not being leveraged in an otherwise successful practice. This can offer the buyer future growth potential without boosting the sale price.
Why Is Now a Good Time to Sell My Dental Practice?
For those looking to retire, the answer to why now may be a good time to place your dental practice for sale is related to the above information on buying a dental practice. The uncertainty created by the pandemic in the first half of 2020 has caused a lot of younger doctors to reconsider their career path, many of whom are concluding now is time to take control of their career, rather than be subject to the decision making of an employer in stormy times. These doctors who may have been biding their time earlier are now increasingly ready to buy your dental practice. As stated above, this has been confirmed as we have seen an increased interest from buyers across the country.
So, if you are considering placing your dental practice for sale, there are a few things that will help you generate interest and realize its full value. The first is cosmetic. Make sure your office presents well. For instance, if you haven’t replaced your carpet or updated your paint, now is the time to do so. If you are experiencing a lighter patient load as you ramp back up, this can allow time for some lower cost, high-impact cosmetic improvements in order to create a strong first impression.
Second, your equipment should be reasonably up to date. If you haven’t switched to digital systems, you may want to consider doing so before selling to help maximize the interest. Younger doctors have only been trained on digital platforms and may not be as interested in older practices with equipment that is out of date, requiring them to take on an upgrade project.
Third, if you don’t have a website, you may want to contemplate this type of web presence. Although you may not have needed one before this for marketing purposes, it may be worth having one created now. The first thing a buyer will look for is your website. If they can’t find one, they may move on to another practice and not give yours a second thought. It doesn’t need to be fancy or elaborate. Just a simple site that shows your office, communicates information about you and your staff, and, for the time being, communicates your sterilization procedures. DDSmatch Mid-Atlantic can refer you to companies who can create a basic, professional site for you at a reasonable cost.
Why Dentists Choose the DDSmatch Mid-Atlantic 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 Mid-Atlantic can help you achieve your dental practice transition goals. We are more than just business brokers—we are dental practice transition specialists with deep expertise in this industry and current market conditions.
We emphasize being thorough and transparent in all of our transitions, with a focus on finding the right match between the buying and selling doctor. We understand that selling a dental practice is more than just a financial transaction. A sale means that a doctor is selling their life’s work and of course they want to see their legacy protected. Our goal is to ensure that everyone walks away from the table happy with the deal they’ve made. We’re well known for creating win-win transitions. How we accomplish this depends on a few different factors.
To begin with we are clear about the aspects of what the deal will entail through issuing a comprehensive letter of intent to reduce ambiguity and define the key aspects of the 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 the pieces that’ll 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, noncompete . . . all in writing, ahead of time. Even though a letter of intent is a nonbinding agreement, we want that expectation set for the seller and buyer.”
Second, we use our Trusted Transition Process. This means we are using the same steps with every seller to provide the buyer with transparency about what they are buying. To this we 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. They provide a detailed, 70-page report on every financial aspect of the practice, allowing the buyer to easily see production, collections, taxes, overhead, and any other information they need to understand why the practice is worth what you are asking for it.
Opportunities for Buyers
While we do not represent buyers in dental practice transitions, we have a lot to offer those looking to buy a practice right now. Our website is free for buyers to search a wide range of quality dental practices for sale. Once you’ve created a profile, you can view information about available practices. Our algorithms will track what areas you are looking at and keep you informed of available opportunities in those areas.
So even if you are a fourth-year dental student, this is a great way to stay in touch with different opportunities and the market conditions in your area. We have thousands of dentists registered on the site to keep access to DDSmatch resources as we continue to add opportunities and information. Even those still in dental school use the site to start looking at practices and associate opportunities and to be kept up to date as they progress through their education and career.
We offer flexibility in our search capacities. You can search by associateships, partnerships, practices available for merger, or dental practices for sale. You can search by location and size. If you are logged in under your profile, you can 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.
Finally, we strictly guard confidentiality to protect our clients’ interests. There are no doctor names used on the site to protect the integrity of our transitions and the dentists we serve.
We know that a dental transition is a big decision for everyone involved. Our success is dependent on our clients being happy with their transition and the buying doctors feeling satisfied with what they’ve bought. As Miller says about our clients, “If they see a patient in the grocery store 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.”
If you are interested in buying a dental practice, you can search our available practices. If you are considering selling a dental practice, contact us today and find out how we can help you meet your practice transition goals.