Practice Managment: Preparing for a Transistion

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.

3. Keep an open mind

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 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: • What hours will they work? • Will you need to hire additional staff? • How will you divide current and new patients?

Discuss your preferences during the interview process to ensure both sides are on the same page and you can work together successfully.

8. Get started

Now is a great time to embark on a practice transition. The pandemic gave a lot of us time to think about the big picture and recalibrate our goals. At ADAPT, we’re seeing many long-time owners preparing to sell, while smart, entrepreneurial buyers are ready to take charge of their futures.

Finding the perfect opportunity can take time, but remember that it’s worth the wait to get it right! Start by creating your free profile at adapracticetransitions.com, where you’ll be matched with dentists who share your goals, timelines, and approach to dentistry. You can also access the ADAPT blog for resources to help prepare for the next phase of your career.

ABOUT THE AUTHOR Dr. Suzanne Ebert graduated from University Of Louisville College Of Dentistry in 1998. After completing a residency, she started a solo private practice and enjoyed being a private practitioner for 11 years. Upon the sale of her practice, she elected to continue her career by providing dental care to indigent populations as the Dental Director at a local Federally Qualified Health Center. Under her tenure the clinics expanded and addressed real needs in the community including eldercare, special needs care and ER diversion. As Adjunct Faculty for the University of Florida, she had the privilege of working directly with senior dental students as they rotated through the clinics. Dr. Ebert is unwavering in her desire to protect private practice dentistry. She is a vocal advocate of having a strong association to lead the dental profession through the issues facing it today.

Dr. Suzane Ebert spoke at this year's ODA Annual Meeting covering this topic. Visit adapracticetransitions.com for more information.

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