Darya

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Jan 21, 2008
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Hi everyone,

I just came home from an interiew for and associateship and future buy-in. After 2 hours of chatting the dentist basically told me that he would like me to start working whenever I'd like, but didn't even look at my resume. He is getting ready to retire and has had the practice for 35 years. He is not in good health due to diabetes and couple of heart attacks.

The meeting was very casual. The dentist, his wife and I chatted about family, life, school, etc. He wants to cut back and gradually retire in the next 3 years.

He's been doing 450-500k on 4 day a week, supper chill, doesn't work too hard, no website, no marketing, no sales ... in the last two years he's been doing 370K, 60% overhead, taking home about 150K.

3 ops, room for 1 or 2 more. 2 hygeinest who have been with the practice for 30+ years and 1 assistant. The wife and daughter do front office and assist as well when needed and potentially would like to work for the new dentist.

The practice is in a great location with potential for growth. They want the associate help them grow the practice before they turn it in. He wants me to see all the new pt and some of his old pt and eventually all and willing to step back and make it work for me. I would potentially buy 1/2 of the practice next year and the other half when he is ready to retire.

We'll be meeting again in the next few weeks. They have not figured out the details yet, but are looking into it.

I have a good feeling about the pratice, but need advice.
 

divertete

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Nov 27, 2004
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My best advice is to post this in the Practice Transitions forum on Dentaltown. There, you'll get advice from people who have actually been in similar situations. I'm just a lowly, regular old associate. But here are the things that jump out at me.

This guy sounds similar to my boss, laid back and ready to welcome you in. You might be tempted to agree to some things with a handshake, but be sure to get it all spelled out in a contract. A lawyer to help you with the details is a great idea. You ESPECIALLY need to have the practice appraised NOW, because the purchase price needs to be based on current production, NOT on the price after you have worked your butt off to grow it. This was drilled into us in our business classes in dental school.

The wife and daughter staying on are potential red flags, but then again it could work out great. Also, go into this with an open mind, and know that these types of associate-leading-to-buy-in deals don't work out more often than not. Good luck though, it sounds like a potentially great opportunity!
 

Darya

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Jan 21, 2008
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Yeah, I'll be calling my lawyer and advisor tomorrow. Thanks for the tip on dentaltown, I'd forgotten about this website.
 

lotexigeus

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Make sure you set a specific date to buy in. If there is no specific day, then the current owner can do whatever he wants. "Mid-June" or something similar is not a specific date. I was told this by a dentist that was screwed over and wasted a couple years thinking that he was going to be able to buy in in mid-June, just to get the run around. He ended up leaving and starting his own practice.
 

omaralt

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May 31, 2004
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i just went through something very similar to you (bought 45% of practice and buying 10%/yr thereafter). there are many things you need to consider; including the following:

1- is the purchase price being decided right now or when you buy the practice? right now the practice is only grossing ~450-500K; so i would say its probably roughly worth $250K? what if after a year of you working there the practice is grossing $800K. is he going to value the practice at the 800K or the 500K? you are the one who brought in the extra 300K so it would not be fair to charge you for that

2- 450-500K is pretty low IMO for working 4 days. you have to see why it's that low. is there potential for growth? how many dentists are in your area? whats the dentist:people ratio?

3- get a lawyer/accountant involved. make sure you value the practice right now. see how many new patients/month, recall exams, etc.

good luck; it's definitely a lot of work involved, but owning your own practice is the best way to go imo. however, if your only going to be bringing in 150K it may not be worth it, since you can earn that much working in a hospital/community clinic without any stress. also, you have to see if he pays his wife and daughter, because if he doesnt that will also eat in to your income. good luck

omar
 

Darya

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Jan 21, 2008
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i just went through something very similar to you (bought 45% of practice and buying 10%/yr thereafter). there are many things you need to consider; including the following:

1- is the purchase price being decided right now or when you buy the practice? right now the practice is only grossing ~450-500K; so i would say its probably roughly worth $250K? what if after a year of you working there the practice is grossing $800K. is he going to value the practice at the 800K or the 500K? you are the one who brought in the extra 300K so it would not be fair to charge you for that

2- 450-500K is pretty low IMO for working 4 days. you have to see why it's that low. is there potential for growth? how many dentists are in your area? whats the dentist:people ratio?

3- get a lawyer/accountant involved. make sure you value the practice right now. see how many new patients/month, recall exams, etc.

good luck; it's definitely a lot of work involved, but owning your own practice is the best way to go imo. however, if your only going to be bringing in 150K it may not be worth it, since you can earn that much working in a hospital/community clinic without any stress. also, you have to see if he pays his wife and daughter, because if he doesnt that will also eat in to your income. good luck

omar
The dentist does not do any endo, exo, perio surg and no marketing. So, taking those into consideration, I could potentially do more.
 

ziptree

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The dentist does not do any endo, exo, perio surg and no marketing. So, taking those into consideration, I could potentially do more.
And if you take those into consideration, also consider the fact that you're probably going to have to turn the entire staff over including everyone from the front office manager to the assistants.

Why? They're comfortable where you are and will do everything to prevent you from growing the practice to where you want it. The assistants will have to train and start doing endo, oral surgery, perio surgeries, etc... As cold as it may sound, your front office manager/treatment coordinator will also have to start learning how to sell cases like endo, extractions, perio surgeries.

Another question is will your interim boss spring tens of thousands of dollars in dental equipment for you to start doing what you want?

Lots of things to consider when buying a practice that's been run a certain way for so many years.