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 For many patients dentistry is a matter of perception – associating tired, outdated equipment with the treatment provided.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.

The Professional Advisory

  1. One Year Later

  2. Dealing with Unsolicited Offers

  3. Covid-19 Practice Sales Update

  4. When is the Right Time to Sell Your Practice and Why?

  5. Partnership Pitfalls

  6. The Real Cost of a Dental Practice Set-up

  7. Smaller Practice Realities

  8. Dental Market Update - 2019

  9. Creating Your Own Most Valuable Practice (MVP)

  10. Small Practice Economics

  11. The Market is Very Efficient

  12. How Can Dental Practice Values be Rising and Declining?

  13. Hygiene as a Value Driver

  14. The Value of a Good Team

  15. Is it Time to Move?

  16. Staging A Dental Practice

  17. The High Cost of Dying

  18. Deal-Busters

  19. Patients - Attract and Retain

  20. Should I Stay or Should I Go?

  21. Is There a Buyer for Every Practice?

  22. Good, Better, Best - The Market has Spoken

  23. Smooth-Sale-ing

  24. Buying Time

  25. Patients, Patience, Patients

  26. A Real Patient

  27. Why Do a Practice Valuation? I'm not Selling

  28. Irrational Exuberance or The New Normal?

  29. Do dental equipment and dental technology affect a practice value?

  30. Finding and Being a Mentor

  31. Bigger is Better

  32. Dave's Top Ten List for Buyers (Vendors should read this too!)

  33. How Well Do You Know Your Practice?

  34. Dave's Top Ten List for Vendors

  35. What will happen to dental practice Values in the next 10 years?

  36. Your Premises Lease is an Important Asset

  37. What are Associates Thinking?

  38. There is Life Outside the GTA

  39. When Is the Right Time to Sell My Dental Practice?

  40. Mergers are a Viable Option

  41. Is Your Associate an Asset or a Liability?

  42. Has your Practice Facility Kept Up With Your Billings?

  43. The 100 per cent of Gross Myth

  44. The Past, The Present and The Future

  45. Caveat Emptor

  46. Overpaid Long Term Staff

  47. Selling your Practice in Stages

  48. A Potential Pitfall of Selling Shares

  49. Value in Your Practice Through Balance

  50. Only Trusted Staff Can Defraud You

  51. To Own or Not to Own Practice Real Estate? That is the Question.

  52. Coping With A Large Patient Base

  53. Successful Dental Practice Transitions

  54. Taking Care of Business

  55. The Investing Dentist Phenomenon

  56. Two areas to focus upon that could negatively impact the value of your practice

  57. Organize your Debt in Order to Sell your Practice

  58. Having a Better Team

  59. How Do I Prepare My Practice For Sale

  60. How Do I Prepare My Practice For Sale? Part 3

  61. How Do I Prepare My Practice For Sale? Part 2

  62. How Do I Prepare My Practice For Sale? Part 1

  63. Advice to My Son or Daughter Graduating from Dental School

  64. Transition - What to Expect

  65. Discussion on Digital X-Rays

  66. Partnerships and Shotguns

  67. Strategic Planning - How to Get Started

  68. Calling All Vendors - Practices have Gone Up in Value

  69. Purchasers: Expect to Pay More for a Practice because of Lower Professional Corporation Tax Rates

  70. Matrimonial Practice Valuations

  71. Purchaser's Guide to Affording a Practice

  72. Location Improvements Throughout Your Career

  73. Small Practice Valuations

  74. Partnerships – The Best and The Worst

  75. Changing Location When the Opportunity Comes Along

  76. Visual Presentation of Your Practice

  77. Presentation of Charts

  78. Your Premises Lease Can Be Your Worst Enemy

  79. How to Select an Appraiser for Your Practice

  80. How Are Your Billing Ratios?

  81. It Pays to Invest in Your Tangible Assets

  82. The Importance of Separate Financial Statements

  83. Five Time Frame Levels to Sell a Practice

  84. 12 Suggestions to Safeguard Computer Data

  85. How to Buy a Visible Practice

  86. Why is there a shortage of good practices today?

  87. The Importance of Equipment in the Purchase of a Practice

  88. The Balanced Practice

  89. Will My Practice Be Saleable in The Future?

  90. Buyer Be Aware

  91. Excess Profit - The Second Key

  92. Patients and Profits are the Keys

  93. Plan Ahead