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Articles

The Professional Advisory

  1. Is it Time to Move?
  2. Staging A Dental Practice
  3. The High Cost of Dying
  4. Deal-Busters
  5. Patients - Attract and Retain
  6. Should I Stay or Should I Go?
  7. Is There a Buyer for Every Practice?
  8. Good, Better, Best - The Market has Spoken
  9. Smooth-Sale-ing
  10. Buying Time
  11. Patients, Patience, Patients
  12. A Real Patient
  13. Why Do a Practice Valuation? I'm not Selling
  14. Irrational Exuberance or The New Normal?
  15. Do dental equipment and dental technology affect a practice value?
  16. Finding and Being a Mentor
  17. Bigger is Better
  18. Daves Top Ten List for Buyers (Vendors should read this too!)
  19. How Well Do You Know Your Practice?
  20. Dave
  21. What will happen to dental practice Values in the next 10 years?
  22. Your Premises Lease is an Important Asset
  23. What are Associates Thinking?
  24. There is Life Outside the GTA
  25. When Is the Right Time to Sell My Dental Practice?
  26. Mergers are a Viable Option
  27. Is Your Associate an Asset or a Liability?
  28. Has your Practice Facility Kept Up With Your Billings?
  29. The 100 per cent of Gross Myth
  30. The Past, The Present and The Future
  31. Caveat Emptor
  32. Overpaid Long Term Staff
  33. Selling your Practice in Stages
  34. A Potential Pitfall of Selling Shares
  35. Value in Your Practice Through Balance
  36. Only Trusted Staff Can Defraud You
  37. To Own or Not to Own Practice Real Estate? That is the Question.
  38. Coping With A Large Patient Base
  39. Successful Dental Practice Transitions
  40. Taking Care of Business
  41. The Investing Dentist Phenomenon
  42. Two areas to focus upon that could negatively impact the value of your practice
  43. Organize your Debt in Order to Sell your Practice
  44. Having a Better Team
  45. How Do I Prepare My Practice For Sale
  46. How Do I Prepare My Practice For Sale? Part 3
  47. How Do I Prepare My Practice For Sale? Part 2
  48. How Do I Prepare My Practice For Sale? Part 1
  49. Advice to My Son or Daughter Graduating from Dental School
  50. Transition - What to Expect
  51. Discussion on Digital X-Rays
  52. Partnerships and Shotguns
  53. Strategic Planning - How to Get Started
  54. Calling All Vendors - Practices have Gone Up in Value
  55. Purchasers: Expect to Pay More for a Practice because of Lower Professional Corporation Tax Rates
  56. Matrimonial Practice Valuations
  57. Purchaser's Guide to Affording a Practice
  58. Location Improvements Throughout Your Career
  59. Small Practice Valuations
  60. Partnerships – The Best and The Worst
  61. Changing Location When the Opportunity Comes Along
  62. Visual Presentation of Your Practice
  63. Presentation of Charts
  64. Your Premises Lease Can Be Your Worst Enemy
  65. How to Select an Appraiser for Your Practice
  66. How Are Your Billing Ratios?
  67. It Pays to Invest in Your Tangible Assets
  68. The Importance of Separate Financial Statements
  69. Five Time Frame Levels to Sell a Practice
  70. 12 Suggestions to Safeguard Computer Data
  71. How to Buy a Visible Practice
  72. Why is there a shortage of good practices today?
  73. The Importance of Equipment in the Purchase of a Practice
  74. The Balanced Practice
  75. Will My Practice Be Saleable in The Future?
  76. Buyer Be Aware
  77. Excess Profit - The Second Key
  78. Patients and Profits are the Keys
  79. Plan Ahead

Volume 19: Changing Location When the Opportunity Comes Along

Download the PDF version now!

Dentists, like most other professionals, often become complacent in the location in which they are working. The community changes but their practice remains the same. The first thing they know is that the practice does not relate to the community and no longer attracts new patients. This often happens because the ethnic nature of the neighborhood changes. Part of Canada’s ethnic kaleidoscope is that a new group comes into the country, congregates in a certain area and changes the orientation of the neighbourhood. A dentist who relates to these new patient groups will prosper while others, who were well established before the new influx, may now flounder and stagnate.

The opening of a new plaza in your area can also create a major impact on your practice. Another dentist sees this as an opportunity and opens a new practice in the plaza. Meanwhile, your practice that hasn’t moved with the times and is tired and old, no longer attracts patients. They see the new location and prefer to go there. This visibility trend, that started in the 1980s and certainly continued on into the 1990s and the new century, is playing an even greater role today in “who is successful”. If you remember in Volume 18, I wrote about investing in your own practice. For some dentists this may mean moving to a more upbeat, superior and more visible location to allow your practice to grow.

I visited a dentist recently, who had graduated more than 20 years ago, to answer his question. ”What should I do now”? The location was very good but the practice looked tired. He had not replaced the chairs and lights, which had been moved from his first location he had originally purchased back in the 1980s. He had spent nominal dollars on a few new assets. Ten years ago he had seen the writing on the wall and had moved the practice to the present location and has done very well increasing his gross to over $1,300,000 – but he still has his old equipment. This could have a long-term impact of loosing patients because the practice does not look up to date. For many patients dentistry is a matter of perception – associating tired, outdated equipment with the treatment provided. My recommendation to the dentist was to invest about $100,000 on chairs, lights and an additional operatory. The practice would then look like the superior treatment centre it really is. Remember, the government pays half the cost when you write off your Capital Cost Allowance.

Dentists should periodically re-evaluate their practices. Would moving the practice to a superior location better relate to my patients? Do I really want to be here in five or ten year’s time? Is a beautiful practice in an inferior building with poorly kept hallways the place to be? And seldom is stair access only in an everaging population a good formula. Reinvesting in new leasehold improvements is expensive but upgrading a location that you do not want to be in is counterproductive and would only tend to perpetuate your problems.

If you are anticipating selling your practice in the next few years, it is probably too late for major improvements – you would not be able to recoup your costs before you sell. Focus on upgrading such things as x-rays and sterilization, which is generally not an excessive amount of money.

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