Many dentists develop the desire to own a dental practice at some point in their career. Some discover this desire while in school, some a few years out and others, like me, were thinking about the path to ownership before ever having an acceptance letter in their hands. Before anyone is able to own a dental practice, however, you must first find one. The following article will describe some details related to my search for a practice, highlighting what I did, why I did it and what I’ve learned along the way.
If you were to ask most people the question, how should I go about finding a dental practice to purchase, there’s a decent chance you’d hear this basic response: “Start by contacting your local dental-supply representatives and transition companies. Because they’re in and out of offices every day, they’ll be the best source of information regarding what’s available out there.” Though I agree there’s truth to this, I decided to take somewhat of a different approach.
As a second-year dental student, my first task to complete in my journey toward dental practice ownership was to create a road map. I needed to decide what path would allow me to aggressively move toward ownership, while simultaneously combating the financial and clinical challenges that may lie ahead. Basically, I had little money to my name, a pile of debt growing daily and hadn’t even seated my first crown yet. So I began questioning what path had the greatest potential to both increase my clinical skills and place me in a position to successfully secure financing from a bank. I considered specializing, completing an AEGD, joining the military or possibly even attempting to purchase a practice right out of school. After several months of incessant research and deliberation, I’d finally made a decision. For myself and my family, the best option was to pursue a short-term associateship for approximately 12 months, followed by a complete purchase of the practice. Though there were many reasons why this option prevailed over the others, one major one was that banks are significantly more likely to loan to someone with more than one year of experience. That would provide me some time to improve my clinical abilities, and there’d be a defined timeframe detailing when I would purchase the practice.
Now that my end goal was set, it was time to figure out how I’d get there. The first question I asked myself was how to best communicate my desires with a potential seller? Or in other words, how will I market myself? I wanted to find something that, in a matter of seconds, would catch the readers eye, create a personal connection and communicate exactly what I was seeking. I decided this could be accomplished by designing a rack card, which is essentially a big post card. On the front, there was a picture of my wife Ashley and I, below that the title “UNC Student in Search of General Practice Acquisition Opportunity” and three bullet points summarizing my goals on the bottom. On the back, I wrote a short letter to the doctor, introducing myself and explaining a bit further what my intensions were. It was simple and professional—short, sweet and to the point.
The next question to ask was, where will I market? Originally from Northeast Ohio, we knew we were planning to stay in North Carolina, but didn’t know exactly where in the state we should go. To give us the best possibility of seeing all options and making a wise business decision, we strategically began with a broad search. Over my third-year Christmas break, Ashley and I spent several evenings creating a basic demographic analysis of all 100 counties in the state. My primary inspiration and direction for doing this, came after reading the book Choosing the Right Practice Location by Jayme Amos. I created a spreadsheet with nine headings, including population, projected annual growth through 2019 and dentists per 10,000 people. I gathered the data from both the United States Census and North Carolina Department of Commerce. I took each of the nine headings and assigned them a numerical score. Generally, if the county stats beat the state averages for a specific heading, that county would be awarded the points. I then totaled the points together to give each county a score. This provided me with a standardized method of comparing one county to another. After identifying which counties scored the best, I further analyzed to see what strong counties were also surrounded by other strong counties. My thought process for choosing geographic locations that showed economic strength beyond a single county was twofold. First, I believed this would limit my chances of choosing a poor individual location. Second, I felt this would help position myself to maximize the potential future opportunities for owning multiple practices close to where I already lived and worked.
After I figured out how and where I would market, I needed to focus in on who I would market to. I accomplished this task by reaching out to the North Carolina Board of Dental Examiners. For approximately $100, I was able to purchase a list of every licensed dentist in the state. The information they provided also included data such as where they practice, when they were licensed and if they were listed as a specialist. This was invaluable information because it allowed me to better identify my target market. I immediately deleted from the list all specialists, anyone who graduated within the past seven years, anyone in public health or academics and anyone not practicing in the counties I’d previously identified. When I was done, what remained was a more focused and manageable list of potential sellers.
Once I had the who, the what and the where figured out, we hand wrote addresses on envelopes and tossed the rack cards in the mail. In the end, there were approximately 80 doctors who responded to the marketing campaign. From those 80 doctors, around 60 of them were interested in discussing potential transitions. Beyond that, there were a handful of doctors who actually offered me a job as an associate, in the event my search didn’t pan out. Since then, Ashley and I have met with over 15 doctors, allowing us to better understand what a potential transition with them might look like. We are now blessed with the difficult task of deciding which opportunity may be right for us.
As I’ve journeyed through this process, it’s become more and more apparent, that there are some very unique benefits to approaching my search in the way that I did. One significant benefit to finding a practice this way, is avoiding the brokers commission. The primary focus of a dental practice broker is to connect a buyer with a seller. If a transition takes place, the broker is paid a commission based on the selling price of the practice. If I’m able to secure a deal with a practice I’ve found on my own, there could be a potential savings of thousands of dollars to the seller. This savings can then be used to negotiate a lower selling price of the practice. Another benefit—potentially the most important—is unidentified opportunities. In the majority of cases, I was the first and only person that the doctor had spoken with regarding a transition. These practices were not on the market, and the doctor’s intentions had not been discussed with supply reps or transition specialists. So if I would have simply gone the traditional route and relied only on local dental industry professionals, I may have never identified these opportunities.
In my opinion, this search has been a huge success, a great learning experience, and honestly, a whole lot of fun. Ultimately, whether you are searching for a practice to purchase or for an associate position, I hope my journey will encourage and inspire you to think outside the box as you search for your own opportunities.