You can never begin to early when selling your dental practice. Consider the next series of tips to improve your existing practice.
1. Get your fees in line. Fees should be evaluated and adjusted annually. Several resources are available to report treatment fees by percentile for a given zip code. Getting your fees in line can add practice value if instituted soon enough.
2. Create an analysis of practice cash-flow. It is critical to understand that the total value of the dental practice will never exceed the ability of the practice to generate a large enough stream of income for both debt service and a reasonable profit to the purchasing dentist.
3. Don't slack off on your production! It is common for dentists to reduce their workload and slow-down. This causes a large decline in practice value and lowers profits. It is critical that the historic growth rate of the business be met.
4. Keep new patient numbers up. Purchasers focus on this number and consider it an indication of practice vitality.
5. Get your financial records in order. Most practice profit and loss statements or income statements fail to give a true practice overhead and profit picture. Ask your accountant to group related expenses together for the purpose of determining actual overhead and profit, and to include expenses benefiting the doctor. If you own two practices, avoid a co-mingled tax return or financial statement.
6. Boost your recall system. Hygiene income may comprise as much as 22 to 25 percent of the total income in a typical general dental practice. This percentage can climb to 30 percent or more in practices aggressively utilizing soft-tissue procedures. Generally, the higher the hygiene percentage the better ... unless the practice is one where the doctor is underproducing.
7. Review the condition of the dental patient records. Through due diligence process, a purchaser usually will review a representative sample of the patient records. The practice owner should maintain les with total treatment logs, current patient data, and easily understood treatment plans.
8. Clean up clutter and upgrade the office decor. A typical prospective dental purchaser will be reviewing multiple practices. Every attempt should be made to make your dental office stand out in this environment.
9. Tune up the dental equipment. Dental purchasers want to see modern equipment in your office.
10. Do not let the lease lapse. Do not let the lease lapse. Do not let the lease lapse!
11. Review your treatment mix. Performance of specialized dental care in a general practice that cannot be easily duplicated by a purchaser can be a major obstacle in an otherwise routine practice transition. If specialized treatment (orthodontic, TMJ, implants, etc.) comprises a signicant portion of your income, be prepared to be exible regarding practice transition requirements.
12. Emphasize fee-for-service. Dental practice purchasers place a real importance on the fee-for-service component of practice income.
13. Consult with your advisors. Practice transition consultants/advisors should be able to identify weaknesses and recommend methods to correct these. This will help you maximize revenues from the transition of your practice.
1. Get your fees in line. Fees should be evaluated and adjusted annually. Several resources are available to report treatment fees by percentile for a given zip code. Getting your fees in line can add practice value if instituted soon enough.
2. Create an analysis of practice cash-flow. It is critical to understand that the total value of the dental practice will never exceed the ability of the practice to generate a large enough stream of income for both debt service and a reasonable profit to the purchasing dentist.
3. Don't slack off on your production! It is common for dentists to reduce their workload and slow-down. This causes a large decline in practice value and lowers profits. It is critical that the historic growth rate of the business be met.
4. Keep new patient numbers up. Purchasers focus on this number and consider it an indication of practice vitality.
5. Get your financial records in order. Most practice profit and loss statements or income statements fail to give a true practice overhead and profit picture. Ask your accountant to group related expenses together for the purpose of determining actual overhead and profit, and to include expenses benefiting the doctor. If you own two practices, avoid a co-mingled tax return or financial statement.
6. Boost your recall system. Hygiene income may comprise as much as 22 to 25 percent of the total income in a typical general dental practice. This percentage can climb to 30 percent or more in practices aggressively utilizing soft-tissue procedures. Generally, the higher the hygiene percentage the better ... unless the practice is one where the doctor is underproducing.
7. Review the condition of the dental patient records. Through due diligence process, a purchaser usually will review a representative sample of the patient records. The practice owner should maintain les with total treatment logs, current patient data, and easily understood treatment plans.
8. Clean up clutter and upgrade the office decor. A typical prospective dental purchaser will be reviewing multiple practices. Every attempt should be made to make your dental office stand out in this environment.
9. Tune up the dental equipment. Dental purchasers want to see modern equipment in your office.
10. Do not let the lease lapse. Do not let the lease lapse. Do not let the lease lapse!
11. Review your treatment mix. Performance of specialized dental care in a general practice that cannot be easily duplicated by a purchaser can be a major obstacle in an otherwise routine practice transition. If specialized treatment (orthodontic, TMJ, implants, etc.) comprises a signicant portion of your income, be prepared to be exible regarding practice transition requirements.
12. Emphasize fee-for-service. Dental practice purchasers place a real importance on the fee-for-service component of practice income.
13. Consult with your advisors. Practice transition consultants/advisors should be able to identify weaknesses and recommend methods to correct these. This will help you maximize revenues from the transition of your practice.
About the Author:
WB&A is a Dentist and Tax Attorney/Accountant with years of Texas dental practice transitions experience. Backed by in-depth experience, knowledge and credibility essential to making your practice transition seamless and successful. Dental Practice For Sale Dallas and Dental Practice For Sale East Texas
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