How To Maintain Revenue | Buy & Sell A Dental Practice | PMA

Matt Scherer and Joe Gordon talk about the importance of maintaining your dental practice revenues as you go through the selling process.


Matt Sherer: Hello, and thanks for joining us today. My name is Matt Sherer with PMA Practice Transitions and I primarily cover the Ohio and Western Pennsylvania area for dental professionals who are looking to either sell their practice or purchase a practice. My colleague here is…
Joe Gordon: Joe Gordon. I do exactly what Matt does, but I do it in Indiana and in Northern Kentucky. Today we’re going to talk about maintaining your practice revenues as you go through a selling process.
Matt Sherer: What a great topic, Joe. How many times do we see dentists who are looking to retire in the next three to five years and what do they do? They go on vacations, they take more time off…
Joe Gordon: They slow down.
Matt Sherer: They slow down.
Joe Gordon: They cut a day out of their schedule, and then they wonder why their practice revenue goes down, and going along right hand in hand with that is the value of your practice. One of the largest factors in valuing a practice and coming up with a fair price is the gross amount of revenue. As that declines, the value of practice declines.
Matt Sherer: What I’ve seen, I think what happens a lot of times too is the revenues, the top line of revenue start going down, the collections. But what don’t they change in the practice? They don’t change their overhead. Then ultimately what happens is their bottom line number goes a lot less-
Joe Gordon: Oh, absolutely.
Matt Sherer: … which is a huge factor in the sale of their practice and the value of their practice.
Joe Gordon: Absolutely, Matt.
Matt Sherer: What we want to talk about today is just doing yourself a favor. You’ve worked 30, 40, sometimes 50 years building an asset, building your practice to what it is, and you want to maintain that legacy and get the most value out of that practice. It’s so important to just maintain that revenue, whether it’s you doing it or somebody else doing it for you. Right?
Joe Gordon: Absolutely. If you need to get an associate in for… sometimes it’s health reasons. To maintain that revenue, let’s go ahead and do that. Let’s go back and revisit our collection policies, look at our billing policies. Let’s make sure those are still maintained and they don’t slack off from your staff stand point. The other factor in maintaining your revenues as we all know, we… patients move, patients die. We have to maintain a good flow of new patients coming into the practice that a lot of people will put a lot of effort into looking at what the new patient counts are, and we really need that to continue. Continue your marketing.
Matt Sherer: You had a lot of dental clients as a CPA over the last 38 years. How many of them raised their fees in the last five or 10 years?
Joe Gordon: They tend to become stagnant right before they retire. Again, that’s just going to hurt your top line and it’s also going to hurt the value of the practice in that no buyer of a practice wants to go in and have to increase fees 10, 15, 20% to get to what market value is these days. It just makes them look like the bad person when they transition over a few patients.
Matt Sherer: And raising your fees isn’t a bad thing. What’s the cost of bread today versus 20 years ago? Right?
Joe Gordon: Exactly.
Matt Sherer: If you raise your fees incrementally, 5%, I don’t think any of your patients are going to realize those fee increases and it’s just going to help you maintain your revenues.
Joe Gordon: Absolutely. I think it’s great, and cashflow maintaining, with your revenues maintaining is probably the best thing you can do when you think about transitioning your practice.
Matt Sherer: Well, we appreciate your time today. If you like us, please give us the thumbs up and also please feel free to share this segment with your colleagues and friends. Thanks.

Matt Scherer | PMA Team Member Published by Matt Scherer