By Sarah K. Lynch
The buyer pool for dental practices changes daily. It is organic and it flows. In my practice transition world, every day dentists buy, sell, move, merge, partner, retire, or try something else. In my opinion, dentistry is the best entrepreneurial profession in modern medicine.
Several times a week I speak with dentists who are entertaining the idea of selling their practices. Some of these doctors mention they know someone who is in dental school, and they set their sights on that person as being “the one” they want to take over their practice when they get out of dental school. In theory, it sounds like a logical idea. But more often than not, that concept is a pipe dream, and rarely if ever have we seen these situations come together. It is like assuming that just because we wear size eight shoes, our successor will wear the same size even though the person is a size 10. Someone will get blisters. The exception is the true family practice succession plan. In those family buy-in/buy-out situations, the concept has been discussed, dreamed about, and planned for years, and usually happily becomes reality.
Unless a practice is up to speed with the technology and instrumentation the incoming dentist is trained in, there will be an adaptation issue for the new doctor. This is routinely factored in to how the practice is priced. Some buyers will not entertain purchasing an office that will require borrowing extra working capital to upgrade and office downtime to renovate, thus limiting the available pool of buyers for some practices.
Practice owners hire experienced practice brokers in order to tap into our intimate knowledge of the marketplace and to price their practices correctly. We are in constant communication with our active buyer clients so we can learn what they’re keenly interested in. Over the years, I’ve observed many dentists achieving incredible practice success, and their ambition broadens as they advance in their careers. They are confident in their abilities as practitioners and business owners, so what better way to grow than by acquiring additional practice locations with associate dentists?
Practice management technology and patient communication systems are significantly improving productivity. Information aggregation of practice metrics, patient contact, and today’s practice marketing modalities enables more practice owners to cover more ground and grow. I call it proactive practice management. Undoubtedly, this is an exciting time to be in the dental profession.
At our firm we are seeing more savvy dentists and dental specialists putting their entrepreneurial talents to work by purchasing additional practices. One doctor I spoke with clearly stated, “At this time there is no better place to put my money and earn 10% to 15% on my investment.”
They are not losing sleep about the competition. These entrepreneurial dentists are busy staying focused on delivering excellent patient care and being the competition!
What do these entrepreneurial dentists do? They are proactively engaged in purposeful activities that deliver results. They are excellent leaders, communicators, and delegators. You may be wondering if they came out of the womb that way. In most cases, I would say no. These skills can be learned. Many had masterful mentors, learned best practices in study clubs with colleagues, or engaged quality practice management consultants. I have noticed how these successful entrepreneurial doctors navigate — they highly value the element of time. Even if their priorities shift, their unwavering focus is still on putting energy into purposeful activities that deliver results.