Matt Scherer and Joe Gordon, with years of experience in buying and selling dental practices, discuss the various types of dentistry services and how they can affect the purchase or sale of a dental practice.
Transcript
| Matt Scherer: | Hello and welcome. My name is Matt Scherer. I’m with PMA Practice Transitions, and I cover the Ohio and western Pennsylvania area. Sorry about that. I primarily help dental professionals in buying and selling practices. My colleague is … |
| Joe Gordon: | Joe Gordon. And I do pretty much the same as Matt, but I do it in Indiana and Northern Kentucky. Today we’re going to talk about types of dentistry and the type of services that either you’re currently doing, or if you’re looking to buy a practice, the type of work you would like to do. Why do we think that’s important Matt? |
| Matt Scherer: | Well Joe, obviously if you’re buying a practice, you’ve got to look at the mix of of dentistry that the dentist does, right? So if the dentist is doing ortho and endo and oral surgery, and you’re a dentist who doesn’t like to do ortho, endo and oral surgery, why are you buying the practice? |
| Joe Gordon: | Exactly. |
| Matt Scherer: | So from a seller side, you have to look at also the type of dentistry that you do, because if you are a higher, what we call a higher end dentist, you’re doing higher end procedures and things like that, potentially you shrink down your buyer pool a little bit, because a lot of general dentists coming out of school are just that, general dentists. They’re not doing the high end cosmetic type stuff. |
| Joe Gordon: | We need to match that up with our expectations and what we’re going to do. There are a number of practices though, that would say we run into buyers who like to endo and who like to do oral surgery, and the practice is currently referring out that work. That’s a huge additional source of revenue. It can be 20-25% increase on day one, just by providing those services, and you’ll see that with some of the older practitioners that we do. |
| Matt Scherer: | Yeah. |
| Joe Gordon: | Yeah. |
| Matt Scherer: | I think when we talk about the type of dentistry as well, we’re also talking about, is it a medicaid practice? Is it heavy PPO? Is it fee per service? And what are you as a buyer looking to do? Do you like to do Medicaid? I would say, you know these days most people don’t. So if it’s a heavily medicaided practice from a selling standpoint, potentially you decrease the value because again, you’re decreasing your buyer pool. |
| Joe Gordon: | Exactly. And the same thing goes with pediatric. |
| Matt Scherer: | Yes. |
| Joe Gordon: | If you have a general practice, but it has a large population of pediatric patients for whatever reason, again, you may be shrinking down your potential buyers of that. And from a buyer standpoint, is that something that you want to do? I personally find pediatrics a bit frightening for me, and I know a of general dentists [crosstalk 00:03:00] that are the same way. They don’t want anything to do with that. And it’s appropriate; if you’re going to be a pediatric practice, be a pediatric practice. |
| Matt Scherer: | Absolutely. |
| Joe Gordon: | Yep. So we want you to be aware of these things as you go into buy a practice. We want you to be aware of this as you deliver services and what you are, what you are selling. |
| Matt Scherer: | Yes. Yeah. And I think when, when you’re coming in as a buyer, obviously part of your due diligence is looking at the payer mix and things like that and looking at what value you could bring into the practice. And I think, in a future segment we’re going to talk a little bit about price versus value. And we’re not going to get into it too much in this segment, but that’s definitely a segment to look forward to, because I think that’s a huge thing when a buyer’s looking to buy a practice. |
| Joe Gordon: | One of my favorite subjects. |
| Matt Scherer: | Good. So with that being said, I don’t know if you have anything else to add as far as the type of dentistry, but certainly we appreciate you taking time to view this segment. And if you liked it, please give us the thumbs up, share it with your colleagues and friends and we appreciate your time. Thanks. |