When you have learned to place implants and you embrace the bigger surgery picture, you want to do many more implants. You want growth now. You want to attract patients with missing teeth. Consider a practice merger. Yes, it works!
A solid marketing plan is necessary and add to that the possibility of a merger right in your own town, it is magic. In addition to older dentists who are considering selling, there are dentists who need to move out of state to care for family members, dentists who have decided to work in a different environment or possibly become specialists. You never know who is thinking of making a change.
In discussing mergers, dentists can easily be lost at “how?” Let’s talk about the bigger picture, your bigger future before we worry about the “how” of merging a practice in your community. Let’s talk money and numbers to start.
First, a practice merger has never failed to pay back the purchase price within a year. What you are purchasing is a practice full of habitual dental users. These are good patients with great potential for you.
Why does it work so well? In your existing practice doing $850K with three days of hygiene and a team of three, you already are paying your expenses. You might be netting $350K. If the opportunity came for you to purchase an additional practice doing the same $850K in collection, your new net would be much more than the two nets together of $600K. This is because you are already paying the fixed costs of your overhead. Your new net would be 65% of the added collection or $552,500 plus your existing net of $350K for a $1.7M practice.
Your net increased exponentially because you have already paid all the fixed expenses of rent, utilities, and keeping your staff costs at 20%. You may need to increase an additional assistant, hygienist and receptionist. Yet, with increased production, you are still at 20% for salaries. Your supplies will increase some (still stay at 5% of collections) and your lab will increase whether you do Cad/cam or laboratory crowns. We want lab or equivalent to be at 10% or higher. Bigger picture, you now have doubled your collections and increased your net by $552K.
What also will increase are the opportunities in another three days of hygiene. That is about 600 new to you patients during the first year. If the selling dentist did no implants, this is a wonderful thing. If the selling dentist did do implants, this is also good as he/she was attracting patients with web and marketing who want implants. They are habitual dental patients (good habits, frequent users and believers) who now know you can carry on those traditions of saving a smile with implants.
What also increases with a practice merger is positive enthusiasm with your team. They know when you have hit a plateau and you are struggling for something more. They want you to succeed (job security) and will welcome the opportunity to see new smiles.
Let discuss some “hows.” One big fear is the falsehood you would have to move into that facility and use that old equipment and run two practices. This is not necessarily so. Every merger is different. The building may be leased and the equipment may be going with the selling dentist. Poof! That worry is gone.
Another positive “how” is the merger may present a better facility then you presently lease. At least, consider moving to a bigger and better facility.
We encourage our Doctors to always be looking for opportunities. Wouldn’t you rather be the one to purchase rather then a young, hungry dentist with lots of debt? Be a friend in the dental community, go to lunch frequently, listen to the sounds on the street of what people and dentists are thinking.
First, ask a broker if any practices in your area are for sale. When they are for sale, remember the broker is hired by the seller. You need solid representation, too. Some dentists might be just thinking of a change. Take them to lunch and assure them you will long be a solid member of the community and would like first chance to know of a change. WARNING: Don’t get into details and don’t promise anything.
What you are looking for is a close-by (every town is different as to what is “close by”) opportunity where the selling dentist is actually leaving this practice. AVOID the conversation of “well, I’m not ready yet, but let’s give it a try. We’ll see how it works.” The Doctor needs to be emotionally and financially ready to leave the practice or the practice is not ready to sell.
You need someone knowledgeable to look at tax statements, P/L statements, questions about insurance, and staff contingency to see if this is the right deal for you. The goal is a win/win for both parties. If you do not know anyone with experience in dental sales, call me (888) 977-4600. I am not a broker but will evaluate the numbers on a practice for success.
Even with 600 new patients coming in this year, you still must market and brand yourself as fully skilled in implants as well as other skills. Social media and reviews need to keep happening as well as your website keeping current.
A merger is your same town is a win-win. Look around and get it done. You won’t believe the boost it gives your practice, your team and you.
