Let's Buy a Dental Practice

[ToldYouSo]

I love this thread @_@

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[David1991]

I'm saving everything that is written in this thread in a pdf file so who knows. Maybe I'll polish it up and publish it

How about a Q&A format. I'd read that (if I wasn't reading it here )

Just make sure to give proper credit to those asking the great questions

 

[Tooth]

Sorry to be a downer here, but is the current state of the economy affecting your decision of which practice to buy, if you buy at all? There are many analysts predicting a "double-dip recession" and/or the Greater Depression. Just wondering what your thoughts are.

BTW, according to an article titled "21 Most Recession & Depression Proof Jobs" Dentist was ranked #3 citing,

Dentist: Dental hygiene is very important to Americans. We like our choppers straight and pearly. This is a safe bet, even when money's tight. While people may not have as much to spend on expensive braces, data from Bureau of Labor Statistics shows that dental offices did increase as much as 2 - 4% during previous economic recessions in 1990, 2001 & 2007. Recession also means people will be eating cheap, rather than healthy. This takes a major toll on the teeth, but creates business for you. Remember, no matter how much people hate dentists, they hate toothaches more.

Still, I can't help but wonder.

 

[Munks]

Sorry to be a downer here, but is the current state of the economy affecting your decision of which practice to buy, if you buy at all? There are many analysts predicting a "double-dip recession" and/or the Greater Depression. Just wondering what your thoughts are.

I was going to ask this as well... To The Hammer, it seems that you've got a very good sense of business, and I'm guessing that you're doing well even in this economy. My thoughts are that most dentists are definitely being affected by the economy right now (*I live in SoCal, so I am a bit biased ), but in the long run, the cavities and problems will eventually require even costlier service to fix.

I was also wondering about your previous comments on more dentists retiring than graduating... From what I've read (though I have read many conflicting arguments), it seems that older dentists seem to be clinging on to their practices more, and new dentists are getting stuck in corporate/undesirable jobs. I've also read that even rural areas are starting to get a bit competitive now (still far from saturation however). With the new dental schools opening up this or next year, the graduating dentists rate must be increasing as well.

Then again, everything I've read is either from here, dental town, or other online articles, so I'm really not sure of the validity of these statements (though I am learning from this thread so go figure ).

 

[uncbestyet]

Good stuff man! I am starting dental school in a month .... so this stuff is still a long time away.... but its still good to hear about the business side of dentistry that I really didn't get to hear about while shadowing.

Keep it coming.

 

[bob1]

Typically, how large is the debt from buying a practice? It seems like it would be huge compared to dental school debt (which more people complain about)

 

[anishannayya]

Noooooooo! This thread is slipping. So, BUMP!

And, after the explanation behind this is complete, I nominate this for a sticky. I just hope that like most things on the internet, it doesn't disappear; half complete and forgotten.

The Hammer: Great post, and I'm looking forward to the answers. The suspense is killing me. I need that instant gratification!

 

[The Hammer]

Noooooooo! This thread is slipping. So, BUMP!

And, after the explanation behind this is complete, I nominate this for a sticky. I just hope that like most things on the internet, it doesn't disappear; half complete and forgotten.

The Hammer: Great post, and I'm looking forward to the answers. The suspense is killing me. I need that instant gratification!

Sorry I haven't been as vigil on this thread this weekend. In addition to putting my professional life back in order I have been putting my love life back in order as well so I took a mini vacation this weekend. But I should be back answering questions tonight.

 

[anishannayya]

Sorry I haven't been as vigil on this thread this weekend. In addition to putting my professional life back in order I have been putting my love life back in order as well so I took a mini vacation this weekend. But I should be back answering questions tonight.

Oh, gotcha.

 

[LNinlove]

I nominate this for a sticky.

I second that!

 

[The Hammer]

Sorry to be a downer here, but is the current state of the economy affecting your decision of which practice to buy, if you buy at all? There are many analysts predicting a "double-dip recession" and/or the Greater Depression. Just wondering what your thoughts are.

BTW, according to an article titled "21 Most Recession & Depression Proof Jobs" Dentist was ranked #3 citing,

Dentist: Dental hygiene is very important to Americans. We like our choppers straight and pearly. This is a safe bet, even when money’s tight. While people may not have as much to spend on expensive braces, data from Bureau of Labor Statistics shows that dental offices did increase as much as 2 - 4% during previous economic recessions in 1990, 2001 & 2007. Recession also means people will be eating cheap, rather than healthy. This takes a major toll on the teeth, but creates business for you. Remember, no matter how much people hate dentists, they hate toothaches more.

Still, I can't help but wonder.

The recession isn't affecting what type of practice I'm buying. Once I go through all of the practices you'll understand why. Here is the secret about dental offices and the economy. The economy won't necessarily effect how much work you do as much as it will effect what type of dentistry you do. When the economy when to **** a couple of years ago. I did fewer "smile makeovers" and much more fixed and removable prosth. The trick is to be flexible enough to change as the situation dictates.

 

[21BlackJack]

Great thread! Thanks for the info Hammer. I just spent the last hour reading the whole thing. Gotta love the time you have summer before dental school starts...

 

[jay47]

The recession isn't affecting what type of practice I'm buying. Once I go through all of the practices you'll understand why. Here is the secret about dental offices and the economy. The economy won't necessarily effect how much work you do as much as it will effect what type of dentistry you do. When the economy when to **** a couple of years ago. I did fewer "smile makeovers" and much more fixed and removable prosth. The trick is to be flexible enough to change as the situation dictates.

Right on. In the end, it boils down to one thing: No matter how much people hate the dentist (if at all), they hate tooth pain worse. As long as Coke, Pepsi, Nabisco, McDonalds, and any other restaurant are in business- there will be teeth to fix, and therefore there will be work.

 

[allover]

Associateships



So what should you be paid? A reasonable amount is 20-25% of your collections minus lab. But if you are being paid a percentage of collections you need to be doing the kind of work that will pay you. If you are doing mostly Medicare then 25% of your collections will be crappy. If you are doing mostly medicare then you should ask for a guaranteed monthly salary and if your 25% of collections exceeds this then you get paid the difference. This is a good idea for several reasons:

.....

what exactly does collections mean? and minus lab? how are these two things determined and by whom? ty.

 

[uncbestyet]

I think ....

collections = money taken in/total money billed to patients
(some people don't pay their bills)(might also apply to insurance too)

total income/total billed to patients *100= collections percentage (%)

lab - the amount of money that is paid to a private lab to prepare crowns, inlays, onlays, etc.

 

[The Candidate]

There should be "Let's Start a New Office" thread.

 

[The Hammer]

I think ....

collections = money taken in/total money billed to patients
(some people don't pay their bills)(might also apply to insurance too)

total income/total billed to patients *100= collections percentage (%)

lab - the amount of money that is paid to a private lab to prepare crowns, inlays, onlays, etc.

Exactly. Another way to definite it is this:

Gross: This is the total amount of production that a dental office does. It is the total of all procedures done. Sometimes this is also just simply called "Production"

Collections: This is how much money is actually collected. Because some people might not pay or you are taking a reduced fee insurance collections are usually a percentage of production. Also since some fees are billed to insurance and you have to wait a month or so to collect your production for a given month will be different than your collections. Here is an example. Let say as an associate you produce $40,000 of dentistry for the month of July. But you are still having money come in from procedures that you did the previous three months so your collections for the month of July might be $35,000. So as an associate you would get say 25% of that $35,000 minus your lab bill for the month of July.

You lab bill is just how much you owe your lab for any crowns, dentures etc that they fabricate for you. So to return to the above example in July you collected $35,000, your lab bill was $3000 so your collections are now $32,000. So you will be paid 25% (or whatever % that you agreed upon) of the $32,000.

 

[David1991]

What is a typical % for collection of production in a dental practice?

 

[allover]

Exactly. Another way to definite it is this:

Gross: This is the total amount of production that a dental office does. It is the total of all procedures done. Sometimes this is also just simply called "Production"

Collections: This is how much money is actually collected. Because some people might not pay or you are taking a reduced fee insurance collections are usually a percentage of production. Also since some fees are billed to insurance and you have to wait a month or so to collect your production for a given month will be different than your collections. Here is an example. Let say as an associate you produce $40,000 of dentistry for the month of July. But you are still having money come in from procedures that you did the previous three months so your collections for the month of July might be $35,000. So as an associate you would get say 25% of that $35,000 minus your lab bill for the month of July.

You lab bill is just how much you owe your lab for any crowns, dentures etc that they fabricate for you. So to return to the above example in July you collected $35,000, your lab bill was $3000 so your collections are now $32,000. So you will be paid 25% (or whatever % that you agreed upon) of the $32,000.

the 35K would include collection from julys 40k gross/production? also, how does an associate verify the collections amount is accurate?

 

[Daurang]

Again, this is a awesome thread.

What's your take on chain offices? i.e. Kool Smiles, Small Smiles, Gentle Dental, etc.

One of the above recently offered me a contract at a brand new office, another dentist and I will be running the mill:

1. Guarantee $500 minimum, or 22% collection, whichever is higher.
2. It's a full medicaid office.
3. They estimate employee monthly gross billing to be $72k, and from this they would collect 98.5%, 22% of that collection ($14k a month) goes to the associates pocket. Question is, is this actually doable? will I be working like a robot or a human being?

Which is it...Kool Smiles or Small Smiles?

 

[KaliTurbo]

The Hammer,

This is such a great thread I had to sign up.

Can you elaborate on what the 65% would consist of? I mean 65% is a pretty big chunk of of the pie and leaves very little margin left. Would the 65 include admin salary, hygienist salary, utilities etc?

Here is what I've gathered from your practice 1: sure thing so far.

Revenue: $48,583
Minus Cost of Goods Sold (65%): 31,578.95
Gross Margin: 17,004.05

Expenses
Long term notes payable: 5465
Utilities: xxx amount
Admin salary: xxx amount
Hygienist salary: xxx amount
Total expenses: 5465 +

Earnings Before Income Tax: approx 11,539.05
Income Tax (no for agi adjustment, standard deduction, single, not blind nor over 65): 2490 (29,873.20/12 months)
Net Income: $9049 per month take home not taking into account utilities/admin/hygienist salaries unless those were part of the 65%

So I'm hoping the 65% includes utilities/admin/hygienist/lab fees etc otherwise the $9049 will shrink even further. Please advise.

 

[KaliTurbo]

corp FTW, don't want your personal assets to get seized if you get sued.

Hi dmd87,

If you get sued for your own malpractice it doesn't matter what you have, s-corp, llc, c-corp, the judgment will seize your personal assets if your malpractice insurance doesn't cover the entire amount. Now if you have bad debts etc that is associated with your business, the banks cannot go after your personal assets, that is the shield that the llc provide. Nothing protects you from malpractice etc for insurance lol.

 

[Cold Front]

Which is it...Kool Smiles or Small Smiles?

That offer was from Small Smiles. I had another offer from a different location, 22% production with 10k sign-on bonus. Everyone I spoke with tells me to run for the hills regardless of the offer.

 

[The Hammer]

What is a typical % for collection of production in a dental practice?

Usually 98% is what you want. anything less than that and you need to have a talk with the front desk

 

[The Hammer]

the 35K would include collection from julys 40k gross/production? also, how does an associate verify the collections amount is accurate?

The $35K is everything that has been collected up until the day that your paycheck is calculated. If you had a bunch of patients who paid in cash in July then that would be included because that is money that has been collected. If you had patients who were insurance and the check from the insurance company hasn't arrived yet then until it does you don't get paid for it.

With a good practice management software program like Dentrix it is pretty easy to run a report on your production at the end of everyday to see what you have done and what has been collected

 

[The Hammer]

OK my love life is now back on track and it is time to return to the business at hand. So lets look at the next practice.

Practice 2: The Cadillac

Practice 2:
Avg Gross: $1,130, 613
Operative: $ 791,429
Hygiene: $ 339,184
Days: Mon-Thurs 7-5
Active Pts: 4000 (Insurance 50%, cash 50%) general dentistry, implant placement and restoration, some ortho
Building: Rent
Equipment: Bought within the past 5 years all up to date digital, computers etc.
Price: $904,000 ($850,000 plus $54,000 working capital)

A lot of things going on here so lets just take it one thing at a time. First:

The asking price for the price for the practice is $850,000 which is about 75% of the gross. This is very high for the area. In fact this is pretty high for anywhere but a couple of very select markets. In East Tn this is pretty unrealistic and it tells me a couple of things:

1. This guy thinks that his practice is the s h i t and by extension he is the s h i t. Now don't get me wrong, I think that I'm the s h i t as well but I am also realistic about what my practice is worth. I also know this dentist and I've seen his work and I smoke his a s s six ways to Sunday so for him to be asking this amount means trouble for the buyer.

This could mean that he is too emotionally tied to the practice and he might think that he wants to sell but when the reality of the sale hits he might freak out and make your life Hell. This is more common that you would think and it happened to me on the first practice that I tried to buy right out of dental school. Not fun.

2. It also could mean that he needs the money badly. Possible for his retirement. This is pretty common too unfortunately, especially in this economy. This can make him very inflexible when it comes to negotiating a fairer price and if you are able to get him to lower his price he will resent you for it. Once again no fun.

OK now let's look at the financials. If I screw up my math again. please correct it for me

So the loan will be $904,000 at 7% for 7 years. This breaks down to a monthly note of $13643.78 eek: That is a pretty big nut to crack.

If the practice is grossing $ 1,130,613 at 98% collections the practice is making $1,108,000 a year or $ 92,333.40 a month. At 65% overhead this makes your pre-tax take home $32,316.69. Now take out your monthly note of $13643.78 and you have $18,672.91 for the rest of your expenses. That is a nice paycheck, so why didn't I pick this one? Let's look a little closer at the numbers.

We have already talked about the asking price being too much, so what else is a problem? Well lets start with this, the ADA and other practice management companies will tell you to expect a 25% drop in production when a new dentist buys a practice. This can be lose of patients, patients wanting to delay treatment until they get to know the new dentist, the new dentist may be slower than the selling dentist or the new dentist be hesitant about diagnosing new treatment so the patients don't view him/her as "inventing dentistry to pay off their loans".

So let's say you have a 25% drop in production once you buy the practice. What effect will that have on you? Production will go from $ 92,333.40 a month to $ 72250.05 minus the overhead is $ 25,287.52. Minus your monthly note leaves you pre-tax with $11,643.74. Still a pretty good paycheck, right?

The problem is all of this is contingent on you being able to continue the production that the dentist is currently doing. He is doing $ 791,429 a year. That is a hell of a lot of dentistry for one person to be cranking out. You can not do those kind of numbers with single tooth dentistry. I looked at his fee schedule and he is actually charging less than I was for his crowns and other restorations so where is all the money coming from? It is coming from here

1.He places his own implants. He is using a practice model very similar to a chain clinic called "ClearChoice Dental Implant Center". They specialize in "get your teeth in one day" where the doctor will place the implants and immediately load them that day.

2. He is doing a lot of ortho both conventional and Invisalign.

3. He uses very aggressive high pressure sales techniques to get case acceptance

4. He also has a high profile marketing campaign in radio, TV , billboard and print.

5. From what I can tell the patients want the missing teeth replaced but are not necessarily interested in having their other problems addressed. This means that there is lots of restorative work to be done if you can convince the patients to accept the treatment.

I know that I said consider all of these practices to have 65% overhead just to make things easy but in reality this practice has closer to 75% overhead.

So to sum things up, why did I pass on this practice?

1. Asking price was too high
2. Monthly note left little room for a "margin of safety" in case of a loss of production
3. I would have to basically run the office exactly like it is being run right now to insure that I would be able to make the monthly note. Very little room to change the practice to reflect my vision.
4. I don't place implants, do ortho or let diagnosed treatment go just because the patient only wants their missing teeth replaced
5. The high overhead leaves no money to take advantage of other financial opportunities that might present themselves
6. The seller dentist may be too emotionally involved with the practice and may cause big problems after the sale

So this is why I called this practice the Cadillac. It's big, flashy, expensive and impressive but is it really worth the extra expense?

So let's discuss this practice and then I'll move on to practice 3

 

[puncho]

Great breakdown, hammer.

Since you've been in that area for a while, you know it (and the doctors) pretty well.

For someone who is moving and planning to buy straight out, would you recommend associating for a year to know the area/market better?

If not, how else would you be able to tell how he's coming up w/ the large gross (e.g. your points 1-5)?

 

[Oracle DMD]

what we just learned: cadillacs are in fact shiney overpriced traps.

 

[jay47]

what we just learned: cadillacs are in fact shiney overpriced traps.

And they don't get very good gas mileage! (high overhead....)

 

[Oracle DMD]

lol, it seems like there was a shiney expensive trap and another shiney trap among the 4 practices!

 

[BrainsOut]

If I screw up my math again. please correct it for meSo the loan will be $904,000 at 7% for 7 years. This breaks down to a monthly note of $11,515.24

I'm not sure how you got that number, same for practice #1.
I use this function in excel:
"=PMT(7%/12;7*12;PRICE)*-1"
which gives -13,640 monthly, that's a ca. 15% difference. I also double checked with some loan calculators. Correct me if I'm mistaken.

to expect a 25% drop in production when a new dentist buys a practice.

That's going to hurt, in case of this practice - a lot.

You can not do those kind of numbers with single tooth dentistry.

I haven't come across that expression yet. If it means what I think it means - its literal meaning - then I must ask how come. Does it come down to less efficient appointments, i.e. when you schedule 30mins and do only 1 filling? I really don't get it as I don't think of procedures limited to one tooth as sth to be perceived as less profitable (as that would include everything besides dentures, bridges, some surgeries and ortho).

I looked at his fee schedule and he is actually charging less than I was for his crowns and other restorations so where is all the money coming from? It is coming from here

How deep can you run your due diligence? Does it go as deep as in other businesses? Are there any areas where you might be tricked or the books somehow cooked?

1.He places his own implants. 2. He is doing a lot of ortho both conventional and Invisalign.

Do future ex-owners ever suggest giving some training in the procedures they've been performing extensively?

3. He uses very aggressive high pressure sales techniques to get case acceptance

Did he, or owners of other dental offices, let you see how they work on daily basis or is it sth you had to figure out based on external info?
In this case does he have a bad reputation going around? Do his former patients resent him?

4. He also has a high profile marketing campaign in radio, TV , billboard and print.

Have you seen the deals he has with these media companies? Would you care to negotiate those?

 

[The Hammer]

Great breakdown, hammer.

Since you've been in that area for a while, you know it (and the doctors) pretty well.

For someone who is moving and planning to buy straight out, would you recommend associating for a year to know the area/market better?

If not, how else would you be able to tell how he's coming up w/ the large gross (e.g. your points 1-5)?

Associating for a year is a good idea. It makes for a better transition and it gives you time to make sure that the practice you are buying is exactly what it was presented as being

 

[allover]

Associating for a year is a good idea. It makes for a better transition and it gives you time to make sure that the practice you are buying is exactly what it was presented as being

what do practicing dentists think of dentists having done a a year long GPR after graduating? are you more willing to hire them and or pay them more?

 

[The Hammer]

what do practicing dentists think of dentists having done a a year long GPR after graduating? are you more willing to hire them and or pay them more?

Usually yes, a GPR means that hopefully you have gained more skills and more speed so it will definitely give you a leg up on applicants who have just graduated

 

[8 SNAKE]

So this is why I called this practice the Cadillac. It's big, flashy, expensive and impressive but is it really worth the extra expense?

So let's discuss this practice and then I'll move on to practice 3

Given the choice, would you rather buy into a practice that has more upside potential or one that's already well run, priced fairly and operating at a pace that you would like to continue?

A dentist once told that he put a great deal of emphasis on a prospective practice's reputation. He'd rather pay more for a well-respected practice than buy a fixer-upper on the cheap and turn it around. Your thoughts?

 

[The Hammer]

Originally Posted by The Hammer
If I screw up my math again. please correct it for meSo the loan will be $904,000 at 7% for 7 years. This breaks down to a monthly note of $11,515.24

I'm not sure how you got that number, same for practice #1.
I use this function in excel:
"=PMT(7%/12;7*12;PRICE)*-1"
which gives -13,640 monthly, that's a ca. 15% difference. I also double checked with some loan calculators. Correct me if I'm mistaken.

Good catch. I went back and saw that I was just using a standard % calculator. I went back and changed my numbers

expect a 25% drop in production when a new dentist buys a practice.

That's going to hurt, in case of this practice - a lot.

Yep. That is quite a dip

You can not do those kind of numbers with single tooth dentistry.

I haven't come across that expression yet. If it means what I think it means - its literal meaning - then I must ask how come. Does it come down to less efficient appointments, i.e. when you schedule 30mins and do only 1 filling? I really don't get it as I don't think of procedures limited to one tooth as sth to be perceived as less profitable (as that would include everything besides dentures, bridges, some surgeries and ortho).

Yes single tooth dentistry takes more time and uses more supplies so it is more expensive and less efficient. Think about it this way, I can do 10 crowns on one patient in about 3 hours start to finish. To do 10 crowns on 10 patients however will take me about 8 hours. Why? The operatory has to be set up and cleaned up 10 times, once for each patient. You have to numb 10 times and wait while the 10 patients each go numb. You will use more than twice the anesthetic, 10 times the amount of impression material and 10 times the number of cotton rolls, burs, suction tips etc.

But the biggest problem is just the time that it takes to see 10 patients over just seeing one or two patients and doing the same amount of dentistry. One time I had a week where I saw 2 patients on Monday and did 18 crowns that day. Tuesday through Friday I saw 3 crown patients a day and only did a total of 14 crowns because these patients only needed one or two teeth crowned. Single tooth dentistry is a time killer and what kills time also kills your productivity and profitability.

I looked at his fee schedule and he is actually charging less than I was for his crowns and other restorations so where is all the money coming from? It is coming from here

How deep can you run your due diligence? Does it go as deep as in other businesses? Are there any areas where you might be tricked or the books somehow cooked?

With dental practice software it is harder to "cook the books" and get away with it, especially if you compare it to the selling dentist's tax returns. What you have to look for is to make sure that they have given you an accurate number on active patients (you can check their recall numbers in the computer for this), an accurate percentage of makeup of insurance/cash/medicaid patients in their office (once again check their daily production records against their EOBs and yearly insurance W2's for this).

If you are really obsessive like me you will also go over their lab bills and the number and type of procedures they were billed for, their supply records and also go over their appointment books to see how many hours and days they worked and the number of no-shows and cancellations that they had.

Do future ex-owners ever suggest giving some training in the procedures they've been performing extensively?

Usually not. Especially when you consider the time, skill and diligence that it takes to successfully do implants and ortho. Those are skills that you can really learn while you earn. This doctor slowly integrated these procedures into the practice until they became a major part of it. It would be next to impossible for you to learn these skills and to perform them at the level that the dentist is currently as soon as you buy the practice

Did he, or owners of other dental offices, let you see how they work on daily basis or is it sth you had to figure out based on external info?
In this case does he have a bad reputation going around? Do his former patients resent him?

So as not to get myself in trouble instead of answering this question I am going to tell you a totally fictitious science fiction story that I just made up.

Molar Wars: A New Hope​

A long time ago in a galaxy far far away a robot named Hammertron 3000 was looking at buying a space station owned by Darth Molar. Hammertron took his bionic sidekick MacBookPro-tron 3000 and used the Force to run a background check on Darth Molar, to see what other parts of the galaxy Darth Molar might have had a space station in and what kind of trouble he might have run into. Hammertron also sent out his private Jed-eyes knights to talk to people who had been on Darth Molar's space station and even sent one of the Jed-eye knights into the space station to get a first hand report.

Once Hammertron got all of the information back on Darth Molar, he decided to look elsewhere in the galaxy for princesses with hair that looks like cinnabuns.

The End​

Have you seen the deals he has with these media companies? Would you care to negotiate those?

In the practice breakdown that I was given it has a dollar amount for how much the dentist spent on advertising. It was pretty significant and I wouldn't want to renegotiate them.

Good questions

 

[allover]

whats the joke?

http://forums.studentdoctor.net/showthread.php?t=679402

 

[8 SNAKE]

whats the joke?

http://forums.studentdoctor.net/showthread.php?t=679402

What do you mean? I believe that Hammer taught at that school. While his thread didn't imply that he was inquiring about the school as a potential instructor, I'm sure that's what he was doing.

 

[The Hammer]

whats the joke?

http://forums.studentdoctor.net/showthread.php?t=679402

I accepted a job as a clinical instructor there in October 2009. I just wanted to hear from students what they thought about the school without identifying myself as an instructor so I could hopefully get some honest opinions.

Between accepting the position in October and moving to AZ from TN on December 26th my wife left me (on December 13th actually). So I started my new job on Jan 4th and at the same time was trying to manage a divorce that was happening 1800 miles away via text and email. It's not as easy as it sounds.

By February I realized that I was killing myself and something had to give so I resigned from Midwestern and finished the divorce. Once it was finalized in the middle of March I started thinking about what I wanted to do, teach or go back into private practice. I interviewed at UF's dental school in Gainesville.

As much as I loved the students I have to say that I'm a little to "free spirited" to tow the faculty line. Then I drove a brand new bright red turbo 911 at a Scottsdale dealership and I realized that I really missed private practice so here I am.

 

[Oracle DMD]

What do you mean? I believe that Hammer taught at that school. While his thread didn't imply that he was inquiring about the school as a potential instructor, I'm sure that's what he was doing.

he was doing some recon! haha while we loved having him here at MWU (d-bags excluded) hammer is not meant for academic dentistry. there are lots of reasons, but #1 being he's a boss; and being a boss in the dental world means that having a boss really isn't in your nature HAMMER!

p.s. congrats on your smokin hot new lady friend hammer. she doesn't look like she's visually impaired either, so i don't know what kind of lies you told her to get her attention but they musta been good!

 

[Oracle DMD]

I accepted a job as a clinical instructor there in October 2009. I just wanted to hear from students what they thought about the school without identifying myself as an instructor so I could hopefully get some honest opinions.

Between accepting the position in October and moving to AZ from TN on December 26th my wife left me (on December 13th actually). So I started my new job on Jan 4th and at the same time was trying to manage a divorce that was happening 1800 miles away via text and email. It's not as easy as it sounds.

By February I realized that I was killing myself and something had to give so I resigned from Midwestern and finished the divorce. Once it was finalized in the middle of March I started thinking about what I wanted to do, teach or go back into private practice. I interviewed at UF's dental school in Gainesville.

As much as I loved the students I have to say that I'm a little to "free spirited" to tow the faculty line. Then I drove a brand new bright red turbo 911 at a Scottsdale dealership and I realized that I really missed private practice so here I am.

BTW it would be real nice if you were here to help me w/ a 4 unit mand implant supported overdenture case that i'm about to get crackin in our new clinic! hahaha

 

[THINKOFMYFUTURE]

what we just learned: cadillacs are in fact shiney overpriced traps.

Thank God I got a Lincoln!

 

[The Hammer]

BTW it would be real nice if you were here to help me w/ a 4 unit mand implant supported overdenture case that i'm about to get crackin in our new clinic! hahaha

You have my number big man, I'd be glad to help you

 

[allover]

I accepted a job as a clinical instructor there in October 2009. I just wanted to hear from students what they thought about the school without identifying myself as an instructor so I could hopefully get some honest opinions.

Between accepting the position in October and moving to AZ from TN on December 26th my wife left me (on December 13th actually). So I started my new job on Jan 4th and at the same time was trying to manage a divorce that was happening 1800 miles away via text and email. It's not as easy as it sounds.

By February I realized that I was killing myself and something had to give so I resigned from Midwestern and finished the divorce. Once it was finalized in the middle of March I started thinking about what I wanted to do, teach or go back into private practice. I interviewed at UF's dental school in Gainesville.

As much as I loved the students I have to say that I'm a little to "free spirited" to tow the faculty line. Then I drove a brand new bright red turbo 911 at a Scottsdale dealership and I realized that I really missed private practice so here I am.

. I live in Phoenix. I really hope to get into MW or ATT (tuition), though im not applying for another two years.

 

[DrDientes]

Sorry if I am looking back into the Sure thing practice still, but I was wondering after you took the gross and minused the 65% overhead, you were left with 17,000. A couple posts down you talk about having 11,000 to service student debt when replying to someone's post, what did that 6,000 pay for? The loan you took out for buying the practice? My bad for going back to the 1st practice guys I just caught up on the reading

 

[anishannayya]

lol, it seems like there was a shiney expensive trap and another shiney trap among the 4 practices!

So this trap would be the Cadillac Escalade, and the other would be the GMC Yukon right?

 

[THINKOFMYFUTURE]

So this trap would be the Cadillac Escalade, and the other would be the GMC Yukon right?

Right, the GMC wouldn't be shiny though.

 

[The Hammer]

Sorry if I am looking back into the Sure thing practice still, but I was wondering after you took the gross and minused the 65% overhead, you were left with 17,000. A couple posts down you talk about having 11,000 to service student debt when replying to someone's post, what did that 6,000 pay for? The loan you took out for buying the practice? My bad for going back to the 1st practice guys I just caught up on the reading

Yes. The $6000 was the practice note. Once you take your monthly production and take out overhead you then subtract the note on the practice

 

[anishannayya]

Right, the GMC wouldn't be shiny though.

Have you seen the new American cars? I guess those guys haven't gotten the notice that chrome "bling" went out a long time ago.

 

[The Hammer]

OK time for Practice 3

Practice 3: The Goldmine

Once upon a time when I was a little Hammer my dad and I were watching a documentary on the California Gold Rush of 1849. At one point in the program they showed a picture of one of the bigger gold mines in the US. "It looks like a hole in the ground," I said. "It is a hole in the ground," Hammer Sr. said."So what makes it so special?" I asked. "Knowing where to dig," Hammer Sr. said. "Well, how do you know where to dig?" I asked. "By spending a lot of time digging around in holes that aren't goldmines," Hammer Sr. answered.

When it comes to dental practices that are "Gold Mines" it does take a lot of digging around before you can tell if you have a gold mine or just a hole in the ground. The problem is you don't want to find out you have a hole in ground after you have bought it. So how do you tell the difference?

First let's look at the numbers:
Practice 3:
Avg Gross: $365,158
Operative: $237,350
Hygiene: $127,808
Days: Mon, Tues, Thurs 8-5, Weds 8-12
Active Pts: 1200 (Insurance 60%, cash 40%) maintance dentistry dentist is 70 and retiring
Building: Rent with option to buy
Equipment: Chairs and delivery units good, no digital, no computers, old x-rays, new pano, everything else old
Price: $289,000 ($239,000 plus $50,000 working captial)

The first thing that jumps out at me is the $127,808 in hygiene that this office is doing. With an active count of 1100 this is a great hygiene number. In fact his hygiene department is responsible for well over a third of the total office production. This is not an office in an irreversible decline. This is an office that the doctor has decided to slow down but apparently the patients won't let him. That is a very very good thing. This doctor has a good relationship of trust with these patients, if you can move in with a good transition they will trust you too. And I can promise you if you can flip them they will tell all of their friends and you will be busy.

Also if the doctor is slowing down then he probably is not doing any big restorative. He is probably just doing patch work to get his patients by. This is a great thing for you. There probably is enough crown and bridge that even if you slowly start making more extensive treatment recommendations you still won't be viewed as "that greedy new dentist".

So lets look at your practice note and the current office production:

Loan amount $289,000 but you will need another $50,000 of improvements to get it to a point that you won't be replacing anything for a few years so lets go with $339,000 at 7% for 7 years is a monthly payment of $5116.42.
The practice is producing $365,158 at 98% collections which is $357,854.84 take out the 65% overhead and you have $125,249.19 which is $10,437.43 a month. Take out the practice note and you have $5321.01 per month left over. This is at the current slowed down level. At the snail's pace the current doctor is working you are able to buy the practice, invest $50,000 of equipment that you can use for the next 10-12 years of tax depreciations, have $50,000 in working capital and still bring home $5321.01 a month. That my friends is a gold mine but it gets better, much better.

1. You will not be working at the pace the 70 year old, twice heart attacked doctor is, even out of dental school. You will be moving along at a much quicker pace.

2. The current doctors fees are LOW! Even raising them slightly to where they still will be the lowest in the area will give you a 21% increase in production. This is without even seeing more patients and trust me, the patients will not notice

3. This practice's overhead is not 65%, it's more like 52%

4. The community that the practice is in has about 36,000 people, the county has 58,000. At 44 I am the youngest dentist in the community by about 10 years.

5. The office is located across the street from the hospital/ medical center. It is located in a plaza with 8 other doctors. The building is owned by an LLC made up of the other doctor tenants. The seller dentist owns 1/6 of the LLC and is willing to sell it to me for $130,000 at 7% over 10 years and he is going to carry the note. So I actually get the tax deduction of paying rent but since I am a partner in the LLC the rent money comes back to me to pay off my loan. NICE

Now here are the things that you don't know that make this a no-brainer for me to buy.

1. This office is located between the two oral surgery offices that I was the main implant restorative dentist for. It is also located between the two perio offices that I was the main implant restorative dentist for.

2. This office is 30 minutes from my old office. If I put a few ads in the local papers it won't take long for my old patients to know that I am back in the area (also unfortunately I'm only about 15 minutes away from my ex-wife)

3. A dentist down the street from this office is having to retire due to health reasons. He has agreed to sell me his charts for about $10 a chart. He has about 2100 active patients who will have to come to my office if they want their chart. If they don't want to be my patient the copying fee for the chart is $25.

There are also several other reasons that I can't discuss at the moment of why this place is great for me in particular but the ones I've listed so far should make it clear why I bought this one. OK so time to discuss the Gold Mine