Dental practice sales are very difficult transactions. They typically involve a young buyer with limited experience in the world of business, and an older seller who has great concerns regarding the perpetuation of his or her legacy. To compound the problem, this is usually a once-in-a-career event for both parties, and neither party is very knowledgeable about how to proceed. While there is a general... More »

Consider these simple facts:Most doctors have no income-producing asset that makes more money than their dental practice.Any practice transition activity will, by definition, have some type ofeffect for the rest of your life, both at the professional and personal levels.Any misstep in this area can be costly — often beyond measure.Here is a list of some of the more deadly sins committed during transition activities.... More »

As a buyer’s representative working with dentists who want to purchase or buy into a dental practice, I’m amazed at the information the buying dentists use to make their decisions. They don’t always gather the best information, nor do they always understand what the informationmeans.This is one of the most important career decisions most dentists will ever make. I encourage them to examine all aspects... More »

(Please note that the following article is not intended to be a legal opinion or to address other legal issues that might arise in the case of marriage dissolution. Typically, divorce law is governed by state statute and state legal precedence. Accordingly, one should seek competent legal advice from an attorney familiar with marriage dissolutions.)There is a joke circulating that’s the result of the... More »

I am often asked, “How do you appraise a dental practice?” and “What percent do you use to get the price?” If the process were that simple, we wouldn’t need experts in practice appraisal, just a calculator that can multiply two numbers.Professional appraisers approach the task of every appraisal with the same principles. In each case, appraisers consider the three formal approaches to value — the Asset... More »

Making the decision to sell a dental practice is a major event in a person’s professional life, and when someone becomes committed to the process, there are some things that he or she, as the seller, can do to increase the chances of a rapid and successful transition. Whether the seller decides to retain the services of a professional practice broker, or attempts the endeavor alone, there are some... More »

Recently, I structured an equity development plan — our safer alternative to partnerships — for a practice owner and an associate dentist. I assumed that they were happy and doing well until I received a call from the owner that the associate was making too much money and the owner was losing money. Apparently, while still less than six months into the relationship, the associate was producing $50,000... More »

In these difficult economic times, one of the best ways to grow your practice is “growth by acquisition.” Growth by acquisition is a strategy to increase your patient base by acquiring another practice and merging it with yours.The best candidates for this strategy are practices small enough to comfortably accommodate additional patients, and those that don’t have a lot of value in the equipment. Also,... More »

Dental literature often quotes this formula — The value of a dental practice is 60% to 70% of annual collections. Why, then, should dentists pay to have comprehensive, professionally done appraisals of their practices?No dentist I know would pay a half million dollars for a home built on a foundation of sand. They know the foundation is key to the long-term stability of any building. The money spent... More »

When practicing as a partner, one key agreement that should be in place is the buy-sell  agreement.  This stipulates the orderly purchase of a partner’s share of the practice if a partner  dies, becomes disabled, retires, or leaves the practice prior to retirement. Here are 10 questions to ask about your buy-sell agreement:1. Is the purchase optional or required in every triggering event?In... More »