Dentists / Practice Owners
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You've been building your practice (and your greatest financial ASSET) for the past 10, 20, 30+ years....
You may be surprised to hear the following:
- 88% of us, as dentists, are relying on the $$$ from the eventual sale of their practices for retirement
- 80% of dentists are significantly UNDERVALUING what their practice is worth (the opposite was true just 5 years ago) – this can mean tens or hundreds of thousands (possibly millions) of dollars!
- Practices are worth more RIGHT NOW than ever before (and that may well change in the next year or two) YES, even in a COVID world
- Dentists usually SELL their practices 5-7 years later than they should!
- 20-22% of U.S. dental practices are now affiliated with a DSO/group
- There are 1100+ DSO companies (from 5 to 1000+ locations in size)
- YET… only 12% of dentists can name 5+ DSOs/groups
Our surveys with fellow dentists clearly show that the larger and more successful the practice, the harder and more time-intensive it is to manage/administrate it. Regulations are up, overhead is going up, HR, marketing, HIPAA, insurance, marketing, etc. -- and so maintaining practice growth is becoming more and more challenging. Bottom line is...dentists are TIRED of doing it!
THE OVERWHELMING MAJORITY OF DENTISTS SAY THEY JUST WANT TO DO DENTISTRY! (Yes, of course!).
Here's another thing to consider -- many higher revenue practice owners are thinking "we'll sell the practice to our associate or to another outside individual dentist when we start to slow down" -- Ok, yes, that's the way it's BEEN DONE in the past number of decades. The challenge? There are several actually, BUT the main one often is that it's becoming harder and harder for dentists to get the financing they need from the lenders -- especially now since practice values have (as they should) gone up, and lenders are still "stuck" on only (if they approve at all) offering $$$ based on "outdated" practice value formulas. Which means two things -- you probably won't get anywhere NEAR the amount you would (get if you were to affiliate with a group/DSO) and even if you agree on a solid price and the associate/outside dentist gets SOME financing you may have to "hold notes" for the difference (and some of you don't / won't want to do that).
Once you are past "peak" value, and even slow down a slight bit, your practice value goes way down. Plus...as we mentioned earlier, TIMING is very important. Even if your practice collections stay stabile/consistent, the multiples (of the adjusted cash flow -- EBITDA -- of the practice) being offered in the future (even 1 year from now) may be much lower than they are right now
What IF….
- You could get an ACCURATE and OBJECTIVE understanding of what your practice is WORTH? (at a modest cost to you) AND...not only that, only that, but RECEIVE TWO reports back -- one which shows the value should an individual dentist buy or buy-in, and the other which shows what the value might be to a DSO/group (so you can compare the difference and reasoning behind it)
2. Learn more about WHAT YOUR OPTIONS are -- whether that be to continue to grow your practice (and what to focus on to maximize future value), consider selling to an associate or "outside" dentist, or consider affiliating with a group. We would, as colleagues and experienced transitions advisors and Dr. Tony, as a CBI (Certified Business Intermediary), assist in doing that, and can then also, should you choose considering to affiliate with a DSO, help by reviewing with you which of the groups would the best fit for your practice (culturally, clinically and philosophically). We could also introduce you to the "right" 1 or 2 best group options and negotiate the best price AND terms (whatever you WANT).
FINALLY...HERE'S THE BEST PART (FOR YOU!)
We would do #2 for you WITHOUT CHARGING YOU A DIME TO DO SO! (Yes, you read that right!).
YOU DO NOT NEED TO HIRE A BROKER AND PAY THEM 7%-10% OF THE DEAL!!!
As a dentist of 33 years (1987 graduate of Tufts University School of Dental Medicine) and a CBI (Certified Business Intermediary, I have the experience and business relationships to help you make the SMARTEST and MOST IMPORTANT decisions. As the Managing Partner of Connect the Dents, a business development and M&A advisory company, we have done the following:
- Performed HUNDREDS of practice appraisals (just in the last 2-3 years) ALL OVER THE COUNTRY – small, large, GP, specialty, single location, multi-location.
WHY? It's simple -- OUR 2 STEP SYSTEM which factors in EVERYTHING YOUR PRACTICE IS!!!
1. POINTS -- Your practice is MUCH MORE than just what your financial documents say -- we analyze and score 8 important categories
PLUS
2. CASH FLOW DETERMINATION WITH THE APPROPRIATE MULTIPLE
This system allows for for a "check and balances" system to assure a "grounded", accurate report utilizing TODAY's standards.
- 95% of those practices which do then sell or affiliate with a DSO/group using our FMV (Fair Market Value) determination do so AT EXACTLY THE VALUATED AMOUNT OR WITHIN 2% OF IT.
- We have extensive profiles on dozens and dozens of DSOs – and focus EXCLUSIVELY on those of top integrity with proven models which focus on clinical excellence, dentist autonomy, and top patient care
If you own a practice and want to continue to practice 2-10+ years, it may be a very smart idea to find out what your practice is worth NOW and at least consider (not obligate to) finding out what sort of deal/offer is out there for you -- cash up front -- terms -- ongoing compensation, etc. How it would look for you to continue to practice without the headaches of managing the practice and also continue to earn excellent income for treating your valued patients. WE CAN HELP YOU!!!
Waiting until you are “ready to retire” can end up costing you and your family literally HUNDREDS of THOUSANDS (for some practices, even MILLIONS) of dollars.
Affiliating your practice with a DSO/group NOW does NOT mean you are retiring or having the ability to make less income. In fact, it's the OPPOSITE in most cases! You can continue to practice, not have the headaches of managing the practice, and, because you are focused on providing patient care and clinical matters, often earn higher income. Many financial experts say to do one or two things if you are a business owner with a growing business ---- either buy another business (practice) OR SELL YOUR BUSINESS at its peak value!
Think about this...what could you do WITH a bundle of CASH right now? (pay off debt, invest, buy a home, etc.). What IF you received this cash up front PLUS had the ability (with many DSO affiliations) to INVEST back some of what you received INTO the DSO itself ("roll-over" equity) to then possibly benefit from strong returns on that investment over the next 3-5+ years??? In a way, you could get paid "TWICE" for your practice!! Of course, that part is not guaranteed as it is an investment, but many DSOs have a strong growth and proven track record of return rate.
That's the opportunity you may have if you have a practice which collects $1MM+ a year
Here's the bottom line...there are "great" DSOs, "good" DSOs, and "bad" DSOs...so knowing WHO TO POSSIBLY AFFILIATE WITH IS KEY! Don't rely on RUMORS or get advice from someone who knows about a limited number of DSOs. Connect the Dents has a great deal of data, information, and extensive profiles on DOZENS OF DSOS--their business models, how they operate, what sort of deals/benefits they bring to the table, AND...their actual performances as described by our colleagues who have actually affiliated with them!
DSOs can, have, and will continue to, PAY "PREMIUMS" for solid practices, especially those which are in growth phase, within their target locations, and which the practice owner stays aboard.
The multiples being paid will NOT last forever, however,, and, many believe, including us at Connect the Dents, it may not be much longer. What does that mean? In simple terms, your practice could continue to increase collections, increase profitability and yet, if you instead looked at selling down the road instead of "now", get LESS (or MUCH LESS) even with better financial numbers.
One final thing to consider...selling a practice obviously always means having TAX OBLIGATIONS.
We'll keep this simple...no one knows what the %s will be later in 2021 and beyond (for both capital gains and ordinary income tax rates -- both of which come into play when selling a practice). What we DO KNOW is right now (in 2020 and probably early 2021 at a minimum), tax rates are much more FAVORABLE for practice deals than they probably will be, and that can also MEAN TENS OR HUNDREDS OF THOUSANDS OF DOLLARS in tax savings now versus down the road.
PLEASE TAKE A MOMENT AND RE-READ ALL OF THE ABOVE INFORMATION. Add it all up and if it at least gets you CURIOUS, we urge you consider taking a look at where you stand now and then learn what your options are! Click on/go to Contact Us or call Dr. Tony directly at 917-796-4538 to discuss your situation -- NO OBLIGATION to do anything and completely CONFIDENTIAL.
Maybe you would like to FIRST learn more about all this stuff? Ok, consider the following...
We’ve recently hosted TWO WEBINARS which you can listen/view on your time (they are each one hour in length) to assist you in learning more about all of this: Please go to the links below to do so:
Learn some more! 2 webinars to view/listen to:
1. VIEW RECORDED WEBINAR from late April 2020 "What is Your Practice Worth NOW?"
Go to link: bit.ly/355JMOv
2. VIEW RECORDED WEBINAR (from November 2020): "DSOs and You: Threat or Opportunity?"
Go to link bit.ly/3n6E05U
We provide appraisals as a STAND-ALONE SERVICE, meaning there are no expectations and no pressure to do anything with us OTHER than get the appraisal done. That is what you are paying us to do and that only!
We are NOT practice brokers and not looking to get your listing
Now, more than ever, in a "COVID" world it's more important than ever to get that appraisal done to know "where you stand" and "why"!
Here's the RECAP...WHAT CAN WE DO FOR YOU?
FOR PRACTICE OWNERS -- any or all of the below 3 bullet points:
- Know where you stand: Valuate/appraise your practice — What is your practice REALLY WORTH? (see below)
- Determine what your options are NOW:
-- Buy another practice?
-- Consider selling?
- Considering affiliating with a DSO? Practices are selling at an all-time high right now, AND being able to get top dollar up front and continue to practice long-term without having to deal with administration/managing the practice is very appealing to many of us as dentists. Connect the Dents has extensive profiles on dozens and dozens of DSOs -- understands their business models -- and can help MATCH and INTRODUCE you with one that fits your clinical and philosophical interests. Here's the BEST PART for you....we'll help negotiate the best price and terms FOR YOU and you won't have to pay ANY (NOTHING) "BROKER" FEE!!! How's that sound?
LET'S TALK! SEND US A MESSAGE WITH QUESTIONS OR TO SET UP A 20 MINUTE CONFIDENTIAL, NO-OBLIGATION CALL! CLICK ON / GO TO Contact Us or call me directly at 917-796-4538
CONSIDERING BUYING A PRACTICE? Great! IT'S NOT EASY OUT THERE! WE CAN HELP!!!
We offer any/all of the following services:
- Representation -- Identified a practice to buy and up against a broker AND the selling dentist? We can help! We'll represent you and negotiate the best deal and terms
- Experienced opinion -- Not sure about the asking price? Been forwarded the appraisal (from the seller's side) and trying to understand it? We can help! We'll take a look and give you EXPERT ADVICE on the $$$ being asked
- Valuate / appraise a target practice -- you and the seller have agreed to work together, but the practice has never been appraised and the two of you want a third party to determine the FMV (Fair Market Value)? We can help!