3 Reasons Your Dental Practice Might Be Undervalued

When you want to sell your dental practice to a dental support organization, few things are as important as knowing what your practice is worth. If your dental practice is undervalued, you can easily end up selling your dental practice to a dental support organization at less-than-ideal terms. 

Your practice must be adequately assessed and valued for optimal outcomes. However, too many dentists don’t fully understand the value of their practice. This can lead to their acceptance of offers they otherwise wouldn’t entertain. 

To combat this, we put together a few reasons why practices are undervalued when appraised. Knowledge is power; the more you understand the dollar value of your dental practice, the better equipped you are to sell at a fair price! 

1. The Assessor Is Motivated

Many practices receive offers from dental support organizations directly. If you’re a busy dentist trying to tackle all of the operational and administrative tasks in your day, you might be tempted by these offers. You might even look at the quoted dollar figure and think the offer in question might be worthwhile. This might be a good option if you’re looking to sell and are struggling to fit everything you need into your workweek.

However, it is worth remembering that many dental support organizations are motivated when they make an offer. If you are receiving a quote directly from a DSO or DPO, you likely are not receiving the best offer. And why would you? The DSO or DPO in question wants to offer you an offer that will entice you to commit, not the best possible offer. They’re representing their interests, not your own. If you are a dentist receiving an offer from a DSO or DPO, obtain a second appraisal for the best results. 

2. An Outdated or Irrelevant Assessment Was Used

You may have done your homework and received a second practice evaluation. That’s a good step and a great tactic to ensure you’re getting the best possible terms. However, knowing what method was used when your practice was evaluated is essential. You might not be familiar with the standard methods for evaluating a dental practice, but a cursory knowledge of common dental practice evaluation paradigms will take you far. 

Different practice evaluation methods can influence the total dollar value associated with your practice. Let’s say your practice is evaluated head to head versus others in your market. This look, which compares your value to the value of similar companies in your geographic area, could be helpful in understanding your practice’s value. 

However, let’s say you have a better online reputation, patient base or some external factor that makes you a stronger practice than a direct competitor. This market-based evaluation might not accurately assess your business. A custom practice evaluation is in order to make sure that your practice is properly measured. 

Inversely, focusing on past collections may not let you understand the actual financial health of your practice. If your assessor uses the wrong practice evaluation method, you might not have a truly accurate picture of your practice’s value. This could result in your acceptance of a less-than-ideal offer from a dental support organization. Be sure you understand the methods used when an outside party evaluates your practice’s value. 

3. You Never Were Given Your EBITDA 

If you want to sell your dental practice to a dental support organization, you must fully understand your practice’s EBITDA. Earnings before interest, taxes, depreciation, and amortization (EBITDA) is a tried-and-true method for evaluating the profitability of a business. Comparing businesses head-to-head is difficult. This is especially true with dental practices. 

Any two practices could have completely different client bases, cash flows, future earnings, markets, and asset portfolios. EBITDA helps strip away all of the external noise and focus on the core profitability of a dental practice. If you have not received an EBITDA quote, request one ASAP. Selling to a quality DSO without understanding your practice EBITDA will be tough. Get ahead of this and get a fully comprehensive practice evaluation. 

It is worth noting that many DSOs and DPOs will offer an EBITDA assessment, but they are usually motivated to underquote. Accepting their valuation of your practice at face value is bringing a knife to a gunfight; you’re just out of your element and you’re likely to accept a lower offer than you would normally. A dental broker can help you work alongside a specifically trained CPA to get an accurate EBITDA to help counteract lowball DSO and DPO offers. 

Call Triumphant Transition Partners Today! 

Are you a dentist looking to sell your practice to a dental support organization? Contact Triumphant Transition Partners today! Selling a dental practice is challenging, and many dentists can be overwhelmed by the process. If this is you, partner with a qualified dental broker to represent your interests in the practice sale process.

Partnering with Triumphant Transition Partners will:

  • Equip Your Attorneys with Relevant Data
  • Grant You Access to Our Qualified Buyers Network
  • Give You Consultative Insight Through the Process
  • Help You Understand Your Practice’s Value for Optimal Offer Values

Contact Your Friendly Triumphant Advisor for a Courtesy Consultation Today!

4 Questions to Ask a Dental Support Organization

You likely have many questions if you’re contemplating selling your dental practice to a dental support organization. The decision to sell your dental practice is a big career move and can pay big dividends for your career. 

However, not all dental support organizations are equal, and we encourage you to consult with multiple dental support organizations as you weigh selling. Transitioning your practice is a big decision, and you want to ensure you have the right buyer before you lock yourself into the biggest deal of your professional life.

As dental brokers, we’ve spent a lot of time consulting with dentists and dental support organizations and have unique insight into the goals and needs of each. To help you decide, we recommend asking your dental support organization these questions. 

What Changes Can I Expect to See?

Dental support organizations support dentists who want their nights and weekends back. However, this often comes with a tradeoff. You might not be responsible for every facet of your practice anymore, but that comes with a partner who will weigh in on decision-making and have processes for calls that used to be yours. 

You must ask any prospective dental support organization partner how your practice will change. This will vary from DSO to DSO, but be prepared to understand:

  • Will my staff stay on?
  • Will practice software change?
  • Will my practice be rebranded?
  • What does supplying the practice look like? 
  • Will my feedback be taken into consideration when addressing potential changes? 

Will I Need to Stay On for a Certain Period of Time? 

Some DSOs expect the seller to stay on for a few months while the practice transitions. Others are flexible about whether the dentist needs to stay on and might be a good fit for a dentist looking to make a quick exit. Other dental support organizations are open for longer-term commitments where the seller stays on as a practicing dentist for an extended period.

Whatever your unique situation, there’s a dental support organization for you. However, it is imperative to understand the terms of the deal before you make any commitments. If you expect to leave dentistry as soon as possible for another venture, nothing is as debilitating as needing to stay and help transition the practice for a few months. Be sure to ask up front to understand if this potential dental support organization is a viable partner. 

Be sure to ask:

  • Will I need to stay on post-close?
  • What does compensation look like post-close?
  • What would my responsibilities be post-close? 

What Are the Terms?

Dental transitions can be complicated, and you need to understand the terms of your deal before you make any commitments. Contracts can be structured in very different ways, so don’t assume anything, and be sure to ask the DSO.

  • Is the purchase price paid out in cash?
  • Will part of the deal be stock?
  • Is there an earn-out clause? 
  • If work is required post-close, what does compensation look like?
  • Are elements of the deal based on performance? 

What Would Others Say?

If you’re considering selling, see if the DSO has testimonials from other dentists. Selling your practice is a big decision; you want to ensure you choose the right partner. If possible, get in contact with past sellers and ask:

  • Did the DSO hold up its end of the deal?
  • How was the transition process? 
  • What changed about the practice post-sale?
  • Have past sellers retained their autonomy? 

Protect Your Interests with a Dental Broker

These questions are great to have on hand when fielding inquiries from dental support organizations. However, first-hand insight and knowledge of the dental support organization’s history is invaluable, and that’s one of the many reasons dentists consider partnering with a dental broker. 

The right dental broker can significantly help as you attempt to qualify dental support organizations. An excellent dental broker is only there to represent the seller’s interests and will have industry knowledge about whether any given DSO is a good fit. The right dental broker will also have access to industry contacts you can consult with if needed. 

That’s where Triumphant Transition Partners enters the picture!

We’re here to help you:

  • Evaluate your practice
  • Discuss your goals
  • Present your practice to our private buyers’ network
  • Qualify buyers
  • Equip your attorneys with pertinent documentation and data
  • Negotiate the final sale on your terms and price

Contact Triumphant Transition Advisors for Your Courtesy Consultation!

5 Ways Dentists Can Free Up Time

If you’re a dentist, you are probably always asking yourself how you can save time when practicing. It’s an important question; many dentists find themselves inundated with patient work, administrative upkeep, business strategy, and a slew of other job responsibilities. The consequences of these time constraints can be massive. If you can’t free up time to focus on what you most want to do, your career satisfaction will take a hit. 

If you’re struggling with finding free time as a dentist, rest assured that you are not the only one struggling. Read on to learn more about how to free up more time!

Reduce Administrative Upkeep

You went to dental school because you loved dentistry and wanted to care for your patients’ dental health. That’s a very admirable goal. However, if you’re in private practice, you likely spend much of your time tending to the non-dentistry portion of your dental practice. Hiring, purchasing supplies, balancing the books, marketing, and other administrative tasks likely take up a significant chunk of your time. These tasks are crucial to the operation of your practice, but many dentists are unprepared to tackle these tasks. As a result, they find their time spent on administrative duties. 

These administrative duties are critical to running the practice, but they’ll eat away at your nights and weekends if you aren’t careful. These additional duties are a major contributing factor to the  high burnout rates among dentists today. By some estimates, 50% of dentists struggle with burnout. 

Hire & Train The Right People

If you’ve ever been on a sports team, you likely already know just how crucial collaboration can be. One team excelling can make another team that much more efficient. A great support staff can make you more impactful, much like how you had your best JV football games when your offensive line played well. 

However, the right dental assistants, front staff, and practice managers don’t just pop into existence. You’ll need to find and hire them, or if you can’t find and hire the A team, train up your current staff to grow into the support staff you need. That may require extra work, but it’s worth it. A good support staff can revolutionize your practice and improve your career satisfaction. 

Focus On What Matters

This is an excellent rule for anyone struggling to keep their to-do list manageable. As a dentist in private practice, your responsibilities are myriad. You likely are a high performer, and it can be tempting to “do it all,” but if you aren’t careful, you can find yourself sinking valuable time into things you don’t particularly like or need to do. 

Prioritizing patient care when you have other duties as a small business owner can be difficult. You might want to spend more time with patients but still need to pay bills, order supplies, and deal with staffing, marketing, and tech problems. Finding the right balance as a dentist/small business owner can be challenging, but it is possible. See our next bullet point for more! 

Clean-Up Processes 

A good business process adds structure to your day and helps keep the practice staff and business goals on track. A poorly designed business process adds unnecessary work and might increase the odds of burnout for you and your team.

Consequently, you must evaluate your current processes and see where to optimize. Minor tweaks to your patient reminder process or procurement orders can significantly impact the time needed to run your practice. 

Consider the impact of increasing your patient retention rate. Let’s say you retain 60% of all first-time patients as repeat patients. Increasing that retention rate to 80% has a massive impact on your bottom line and overall profitability, and changes in how you do patient outreach via text and email could help drive that sort of increase. Likewise, increasing the percentage of time spent on a type of patient you like treating could help increase practice collections without increasing the amount of operational effort. Minor tweaks to processes can help get you there, but you need to find the right process consultant to help you make those changes. 

Partner With A Dental Support Organization

If you’re a dentist looking to be more efficient, partnering with a dental support organization might be a great call. These organizations are specifically suited to aid in the management and operational improvement of a dental practice, so many dentists partner with these organizations to do just that. After all, you’re a dentist and an expert in clinical care. 

However, you’re likely not an expert in business management, and even if you were, you still need to focus on your patient base. A well-vetted dental support organization will provide additional resources, proven methods of improving your practice, and access to a larger organization. 

The right dental support organization can help you with…

  • IT Infrastructure
  • Hiring & Staffing
  • Procurement
  • Continuing Education
  • Marketing & Practice Growth
  • Compliance & Regulation
  • Process Innovation 
  • & More

However, it is worth stressing one word: right. The right dental support organization can be a partner who helps you increase your profitability and get time back. The wrong dental support organization could actually decrease your work satisfaction. Many dentists sign on with dental support organizations and are shocked when they realize their control over practice decision-making is changed with a new partner. Others cannot sell their practice at the best possible price or struggle to achieve mutually beneficial terms in the closing process with the dental support organization. 

That’s why you must contact Triumphant Transition Partners and find out if a dental support organization is right for you! 

As your dental broker, we will….

  • Help You Understand The Value Of Your Practice
  • Show You Qualified Buyers From Our Private Buyers Network
  • Represent You Through The Process
  • Equip Your Attorneys With Relevant Practice Evaluation To Get You The Best Terms Possible!

Contact Your Trusted Triumphant Transition Advisor for a Courtesy Consultation!

3 Common Misconceptions About Dental Support Organizations

You have likely heard a lot about dental support organizations if you’re a dentist. 

How could you not have? 

Many of these organizations are active across the US and Canada, and they’re often highly visible at any dental conference or in industry news. These organizations can benefit any dentist looking to jump to the next step in their career, and you probably know many dental colleagues who have contracted with DSOs. You may have considered the same for your practice. 

However, as dental brokers, addressing some common misconceptions about dental support organizations is essential. These organizations can supercharge your dental career, but these misconceptions must be put to rest before you partner with a dental support organization. As dental brokers, we have deep and rich relationships across the dental industry and wanted to share our expertise on dental support organizations.

Read on to Learn More!

Why You Might Partner With a DSO

First, let’s clarify: A dental support organization can significantly help many dentists. The simple fact is that many dentists are incredibly busy and need help to run their practices more effectively. Many dentists’ are on an island, and DSOs offer a tremendous dental community support system that is doctor-centric and typically doctor-led. 

A dental support organization (DSO) or dental partnership organization (DPO) is an organization that provides non-clinical business and operational services to a dentist, freeing up the dentist to more effectively care for their patient base. 

There are so many ways that dentists and dental support organizations can set up these agreements, but generally, an excellent dental support organization could assist with:

• General Administrative Services

• Human Resources and Staffing

• Payroll and Billing

• Insurance Coding and Insurance Services Liaison

• Advertising and Marketing Services

• IT Services 

• Building and Facilities Management Services

• Procurement Services 

• Accounting Services

• Regulatory Compliance

A dental support organization can revolutionize your career. However, while the above benefits are helpful, we still think it’s important to highlight three common misconceptions about dental support organizations that must be dispelled. 

Misconception: DSOs Are for Retiring Dentists

Many dentists sell their practice near the end of their career. It’s easy to see why. Selling a practice is a great way to transition into retirement, and many dentists are familiar with dental support organizations entering the picture at the end of a dentist’s career. 

While this is a common use of dental support organizations, we’d be remiss if we didn’t point out several other benefits of dental support organizations. Many dentists might sell their practice as an exit strategy from dentistry and use the funds gained from the sale of their practice to pivot to another vocation. Selling to a dental support organization is a viable option for early to mid-career dentists ready to say goodbye to the administrative part of dentistry and focus on the clinical or growth side of their dental practice. 

It’s also worth reminding the dentists out there that many dentists elect to stay on after the sale of their dental practice. It breathes new life and extends one’s career once they partner with the support they gain, and the incremental wealth built by partnering. It also gives an exit strategy, young or old, whether five or 25 years, out to a doctor, especially when they have built a great practice that the average dentist cannot afford. When you achieve a certain level of revenue and growth, it is challenging to find a confident buyer or doctor to sell to and that can take on this type of undertaking. This is a very common dental support organization arrangement. If you love dentistry, partnering with a dental support organization can free up your time to focus on patient care. The dental support organization has the resources and operational expertise to focus on business management and can simplify your practice and improve your quality of life. This often increases your income while decreasing the amount of administrative work you need to do. That can be a win for all parties involved! 

Misconception: DSOs Are Always the Right Call

We have seen and worked with countless dental support organizations and + dentist partnerships, leading to tremendous benefits for both. However, any dentist looking to contract with a DSO must find the right partnership for their unique needs and circumstances. There are thousands of dental support organizations, each with its unique core offering, specialty, and value proposition. You could be setting yourself up for failure if you do not consider each dental support organization against your own unique needs. You also need to know what the deal terms mean and how it benefits you in the short and long term. You do not know what you do not know, and we equate it to taking a knife to a gunfight. The devil is always in the details.

Let’s say you intend to stay on as a dentist and want the operational aid support of a dental support organization. You must understand what degree of input you will have in the practice regarding various operational decisions such as hiring, procurement, and marketing. Some DSOs prefer to handle all operational decisions with a templated method, which could mean that you’re left without much control of the practice, aside from clinical decisions. However, other dental support organizations are much more flexible and willing to customize transition plans accordingly to ensure you retain input into important decisions. They want a true partner where you have as much control as you desire, and they are there to support you as much or as little as you wish in the areas in which you need support. They want to align with the right doctor and encourage you to remain the leader in the practice.  The moral of the story here is that not all dental support organizations suit every situation, and how do you know which is the right one for your short and long-term aspirations? 

DSO Initial Offers Are Non-Negotiable 

You’re probably thrilled if you’ve received an offer from a dental support organization! After all, if a dental support organization has reached out to you with an offer, it’s an honest and accurate gauge of your practice’s value. 

Well, not always. Many dental support organizations have teams that reach out to dentists to entice them to sell. They spend hundreds of thousands of dollars on direct marketing, business development team representatives, and paying their own partner doctors significant referral fees to entice you to sell to them directly without representation. You need to know precisely what the deal terms and valuation mean. The adage of them wanting to buy low, sell high. The offers extended from these teams are often lower than what the dentist might receive if fielding multiple offers from qualified buyers. If you have received such an offer from a dental support organization, that’s great! It’s a sign that your practice is valuable and that you should consider every possible offer before selling. 

That’s why it’s so essential that you have industry-knowledgeable representation in the form of a dental broker with you as you sell your dental practice! The right dental broker will help you increase the value of your practice, expedite the sale of your practice, increase the number of interested buyers, generate more interest than you can alone, have an entire auction/bidding process, and equip you with the best terms and highest valuation. A dental broker represents your interest, while a DSO represents their interests. 

At TTP, we offer….

  • Unique Sell-Side Advisory With Buy-Side Experience
  • Detailed Discovery, Practice Valuation & Review
  • Access to Our Private Buyer and DSO Network
  • Management of Letters of Intent and Buyer Screening 
  • Offer Qualification & Representation Through Close
  • We represent your interest
  • We custom-tailor every transition to meet our vast array of clients’ specific needs
  • Negotiate the best deal terms for YOU
  • Create a competitive bidding process

You have put too much time into your dental practice to sell to the wrong dental support organization or with the wrong price or terms. Partner with a top dental broker and call Triumphant Transition Partners today!

Get Your Courtesy Consultation Today & Call Now!