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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 8: Why is there a shortage of good practices today?

Download the PDF version now!

If you are considering purchasing a dental practice you may have noticed that there is a shortage in the supply of good practices. I believe that this is directly related to the value of the nest egg that the typical vendor has been able to set aside for his or her retirement. Since stock market valuations have declined over the past few years, the typical vendor is saying to themselves “I will work a couple of more years to put more money aside and those same years will not have to be supported by the funds I have already put aside.” This is a very logical approach to the economic turndown in the stock market.

The current impact of such thinking, however, is that buyers looking for practices may be out of luck. This in turn may mean that those who would normally be purchasing an existing practice are now starting from scratch in a brand new practice which will take a number of years to develop. For the vendors, it means that they will work longer than they had previously planned to do.

Future outlook

This current economic cycle will actually have a greater impact on the availability of practices than retiring baby boomers wanting to sell their practices in the years to come. The practices which did not come up for sale between 2001 to 2003 will come on the market when the economy is stronger. In addition, the practices which one would expect to come up for sale because of the vendor’s age will also come up for sale. This means that there should be more practices available in the future to satisfy the demand.

Advice for buyers

While you are an associate, take the time today to improve your education skills and business acumen so that when the right practice does come available you will have the skills to take the practice to the next level. Most good practices have well-educated practitioners driving the resources. While I am not a big fan of starting from scratch, if you can find a great location and you can live inexpensively, you could try to develop a practice away from your current associateship. With this option, you’re building a valuable patient base while still retaining your associateship as your main source of income.

Advice for sellers

If you cannot afford to retire, continue your present course. Any fluctuation in the value of your practice will be more than made up by the income as you continue to practise. Use these years to improve your practice to make it more appealing to a purchaser when you feel that is the time to sell.

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