PRACTICE MANAGEMNT Preparing for a Transition By: Suzanne Ebert, DMD Whether you’re considering buying, selling, hiring an associate, or finding a new job, you’re probably wondering: how long is it going to take? At ADA Practice TransitionsTM (ADAPT), we work with dentists in all 50 states — including Oklahoma — to help them find the right practice or person to reach their goals. Through our work, we can confirm that there’s no “standard” timeline for practice transitions. In nearly every case, the longest phase of the process is finding the dentist or practice that fits your goals. This part can range from a few weeks to more than a year. However, there are several things you can do to streamline the process. With a bit of preparation, you’ll be ready to act when you find that right person or practice. 1. Assess your situation Your search period will largely depend on your situation, so it’s wise to start by setting realistic expectations. For example, if you are trying to sell a fully updated practice in a highly desirable area with strong financials (and you have all the documentation in order), you may be able to sell in just a few months. A less desirable area or a practice that is not at all updated usually takes longer. For a job search, a tight restrictive covenant/non-compete clause may extend your search, unless you are willing to consider practices in an entirely different area. In general, the more narrow your search, the longer it will take. Once you have found the right person or practice, the rest of the process can move quickly — if you are prepared. An associate hire can be executed within a few weeks if both sides know what they want. A sale naturally takes longer, but if the buyer and seller both have their paperwork in order (financing lined up, practice valuation complete, etc.), it can close faster. 2. Understand what you want – and what you don’t want I often see candidates drag their feet because they aren’t quite sure what they want. By the time you start talking to prospective matches, you should have a pretty good idea of your goals. (ADAPT members have access to a trove of “Get Ready” resources to help think this through, plus an Advisor who can act as a sounding board.) Start by making a list of your must-haves and must-NOT-haves. This exercise will help you make quicker, more informed decisions when presented with a potential candidate. Involve your spouse or partner to make sure you are on the same page. They can provide valuable feedback and brainstorm what is best for the whole family.
can learn a lot with a 15-minute chat, and you may discover that this opportunity is actually quite good. The would-be associate may have skills you hadn’t considered, or the practice may have “good bones” that you can transform into your dental dream home. Be especially open about location. So often, I see candidates immediately rule out a practice just because it isn’t where they think they want to live. But these practices can offer the best opportunities, particularly rural practices where the cost of living is lower, practices cost less, and you may be able to enjoy a great work-life balance by working part time. 4. Build your team Identify your lawyer and accountant before you need them. It is much easier to take the time to find the right professionals – who have navigated the intricacies of dental practice transitions – now, before crunch time. Start talking to your state or local society to find vetted professionals well versed in your state’s regulations. You can also ask colleagues for their recommendations. 5. Line up your financing If you are buying a practice, your lender can make or break your transition. Begin by interviewing at least three lenders. Ask about the terms they offer, their process, and what they require. Find out how you can strengthen your application, such as improving your credit. Still have student loans? Don’t let that stop you from pursuing your dream of practice ownership. Since banks see dental practices as relatively safe investments, they will lend to people with student debt, provided their credit is in good shape and their personal spending is in check. Start the conversation with a lender to learn how you can make it happen. 6. Get your paperwork in order If you are selling, your buyer (and their lender and accountant) will need a lot of information about the practice’s finances. The entire transaction will go much more smoothly if you have it all rounded up, ready to go. Work with your accountant to prepare the reports and data the buyer’s lender will require. If you are buying, ask your lender and accountant what they will need from you – tax returns, bank statements, etc. – and begin assembling your file. 7. Write your job description and have a plan If you are hiring, think about how the new associate will fit into the practice. Ask yourself:
3. Keep an open mind
• What hours will they work?
Don’t overly narrow your focus. The perfect opportunity may not look like you expect it to. If a candidate or practice checks most, but not all, of your boxes, I recommend having an initial conversation. You
• Will you need to hire additional staff?
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• How will you divide current and new patients?
