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. Dave's Top Ten List for Buyers (Vendors should read this too!)
  19. How Well Do You Know Your Practice?
  20. Dave's Top Ten List for Vendors
  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 39: The Investing Dentist Phenomenon

Download the PDF version now!

Over the last several years many of our practice sales have been to Investing Dentists. This trend is growing and with the recent decline in global equities, we are seeing even stronger demand from Dental Practice Investors. This is not a solution for everyone but certainly provides a viable option for many. In this article I will answer the top ten questions we are asked about Dental Practice Investors.

1)     Who are Dental Practice Investors?

There are a wide range of Investing Dentists that we work with but many share the following traits;

They enjoy the business side of dentistry as much or more than the scientific side.

They recognize the investment potential in dentistry and consider it as good or better than other places they can invest and feel their knowledge gives them an advantage.

They have achieved a certain measure of success in their own practice and want to leverage that success.

Many have joined together to form small investor groups (2-3 dentists) in order to further leverage their respective strengths. This also provides with better access to capital.

Large businesses have been created to buy practices and brand them under a corporate banner. This is a different strategy than the Investing Dentists discussed here.

What changes would they make to my practice?

Investing Dentists generally look for practices that are performing well and that do not need significant changes. They want you and your staff to continue to do what you have been doing for your patients. You will use the same materials, work the same way and generate the same or greater revenue. They may tweak some of the business processes to be more efficient, implement programs to ensure maximum patient retention and centralize some administrative procedures.

3) How long do I stay?

You are the central element in their decision to purchase. They will want you to stay for as long as possible with 5 years being average.

What’s in it for me?

Many dentists whose practices have been purchased by Investing Dentists over the last few years report the following benefits;

      ·        Less stress because the burden of owning and managing the day-to-day affairs of the office now falls to the owner.
      ·        Higher level of enjoyment of dentistry because that is the entire focus of your day.
      ·        Most investors will allow longer consecutive holidays (a month!) as they will arrange to fill in for you with an associate. This is not possible as an   
     owner and can be very healthy and rewarding.
5)     How will my staff be affected?
In most cases there will be no impact on staff provided your practice was run with reasonable staff levels and you were paying them reasonable wages. The investor will need one key contact person such as an office manger in order to facilitate communication. The office manager will generally feel a higher level of fulfillment as their role increases in responsibility with absentee owners.
6)     How will this affect my patients?
Generally the patients will not even be made aware that there has been a change in ownership. The Investing Dentist will want the patient to receive the same level of quality care that you have been providing to them for many years.
7)     Who hires new staff?
Investing Dentists recognize the need for good working relationships among the entire dental team. They will suggest it is most beneficial for you to have the final say on any new employees for your office.
8)     Do I have to sell 100% of my practice?
Investing Dentists have different philosophies on this question. Some like you to retain a small piece, 10% for example, in order to make sure your interests and their interests are aligned. Others find it simpler to purchase the entire practice.
9)     Will I have to take back a note from the purchaser?
Investors are generally well financed and have a good relationship with their financial institution. It would be highly unusual for you to be required to provide a vendor take-back note in order to complete the deal.
10)   What are the pitfalls of selling to an Investing Dentist?
Factors to consider to ensure you avoid any drawbacks include;
      ·   Can you actually see yourself giving up control? The idea of acting as an associate in your practice and focusing on patient care is very appealing, but
can you really let go?
      ·   Make sure there is alignment of practice philosophy with the Investing Dentist.
      ·   Gain an understanding of the Investors long term goals. 
Investing Dentists are here to stay. They represent a viable option for those dentists considering a sale, particularly if you want to keep practicing. Could it be the right answer for you?
  • More time to do things outside of the office.