Did you know there are options when it comes to selling your dental practice? From selling to a dental service organization (DSO) to merging, Matt and Joe share your options when it comes time to selling your practice.
Matt Scherer: Hello and welcome. My name is Matt Scherer with PMA Practice Transitions, and I assist dental professionals in selling and buying practices in the state of Ohio and Western PA. My colleague is …
Joe Gordon: I’m Joe Gordon, and I do the same in Indiana and northern Kentucky. And guess what we’re going to talk about today, Matt?
Matt Scherer: Exploring your options?
Joe Gordon: It is exploring your options when it comes to selling your practice, and not exploring your options when it comes to online dating. That’s a whole different subject. We are not going to do that.
Matt Scherer: All right. So when you talk about exploring your options, Joe, what do you really mean? Like what options as a seller do I really have? I mean, I want to sell my practice, right?
Joe Gordon: Back in the old days, that’s the way it was. It was. You went out and you found somebody, and you sold your practice to them, either over a period of time … They may have been an associate in there for a while, and they may have peeled off a little percentage every year, or you may have sold and tossed the keys on the counter and walked out the door.
Joe Gordon: Now in the times we have now, there’s way more options than that. We have … People like Matt and I exist to help match up buyers and sellers, because there are so many options out there. Typically we see people moving all over the country to find practices, which is not something that was typical 30 years ago.
Matt Scherer: A lot more group practices today than there were 30 years ago.
Joe Gordon: A lot more.
Matt Scherer: So that’s an option, is to sell to a dentist who might own four, five, six, ten practices. The other option could be a DSO, which is-
Joe Gordon: And a DSO is what, Matt?
Matt Scherer: Dental service organization is what they’re called. It’s a corporate buyer with money from investors. There are scenarios where I think that makes sense. A lot of times if there’s an absentee ownership type of scenario, certainly a DSO could make sense for a seller.
Joe Gordon: And then what has become prevalent over the years is that practices are worth more than they’ve ever been worth. You can get a lot more out of a dental practice these days in terms of the goodwill than you could have 30 years ago, because of changes in technology. The fact that dentists per capita, some places are very … are struggling to be able to fill some of those voids, so it makes the practices more and more valuable that we have.
Joe Gordon: We also have seen the corporate role move in with these dental service organizations. There’s a lot of venture capital money that’s out there that’s being invested in these practices, and they’re driving those values up.
Matt Scherer: I think another viable option is a merger, merging maybe a smaller practice into a larger one or maybe even just selling your patient base. Mergers can be very, very advantageous to the buyer, the buying doctor who’s merging the practice in, because essentially what you’re doing is you’re taking revenue and putting it in yours, without all the extra overhead. So it’s a great way actually to grow your practice if you’re looking for new patients and things like that, is to try and find mergers. And I know we come across practices that are either just too small to sell, which would make great mergers for other dentists.
Joe Gordon: So yeah, if you’re looking to sell or thinking about selling in three, five, seven years, use us as a resource. We would definitely like to help and talk to you now on what your options are, what realistically we think could happen with your practice. Try not to get too bogged down in finding the perfect buyer, because they don’t exist.
Matt Scherer: Right.
Joe Gordon: They don’t exist, and don’t wait for that.
Matt Scherer: And keep in mind too when you’re … Because I know the dental organizations, the dental companies, corporate groups, they send out a lot of mailers, and it’s enticing because they’re talking about top dollar and things like that. Their buy box is is pretty tight, and they don’t usually go outside that buy box. So like Joe said, use us as a resource, and we can help you determine [inaudible 00:04:51] … If that’s the road you want to go down, is that a road that you can go down? We definitely would be happy to help. So thank you for listening to this segment. If you like us, please give us the thumbs up and please share us with your friends and colleagues.