#28: The Build-Up Weekly

*Welcome to the 28th edition of The Build-Up, where we deliver insights and inspiration for dentists on every stage of the private practice journey. If this email was forwarded to you, you can click here to subscribe.

Dear friends and colleagues,

December! We are now approaching that strange wind-down / wind-up that accompanies the new year - everything seems to be wrapping up and getting started at the same time.

I’m working hard this month to ensure that 2024 is a great year for my team and myself. There are systems to be reviewed, procedures to be revamped, marketing to be adjusted - so much to do!

At the same time, I’m grateful to get a chance to slow down and enjoy time with friends and family as we get into the holidays. As the special forces saying goes, ‘Slow is smooth and smooth is fast.’

Here’s what I’ve got lined up today:

• Buyers: A Few Tips for Getting Your Offer Accepted

• (Potential) Sellers: Is 2024 your year?

• A Little Winter Wonderland

Let’s go!

Tips for Getting Your Offer Accepted

If you’re looking for a strong, cash-flowing practice in a major metro area, I’ve got news for you: you are not alone.

I have far more buyers than sellers of practices that meet this description. So, if you want to stand out, here are a few tips.

Come Prepared

If you want to be taken seriously in a competitive situation, you need to come to the table with your ducks in a row.

This means having some liquidity (cash in the bank), a decent credit score (ideally 700+), and a history of production.

You can certainly be interviewing potential members of your advisory team (like consultants or acountants, if you don’t already have one).

And it would be smart to start speaking to lenders as well. If you’re thinking about buying a practice and haven’t yet connected with any banks, I’d be very happy to make some introductions for you. Just reply to this email.

Understand Where Due Diligence Fits in the Deal Timeline

There is a big difference between offer diligence and due diligence, and there is a time for both.

Before presenting your offer, you should review the information provided by the broker, investigate the local area, and consider what your life would look like working in that practice. No one wants you to make an offer on a practice you know nothing about.

But, the time to double and triple-check that all the information provided to you is accurate is during the formal due diligence period. This is generally a 21-day period where you will schedule an onsite visit (potentially with a consultant), review tax returns and financial statements with your CPA, dive into practice management reports, and more.

You WILL have an opportunity to ensure that the practice you make an offer on is the real deal. But if you want to get your foot in the door, save the formal due diligence for the post-offer due diligence period.

Be Respectful

This should really go without saying, but you have to get along with the seller.

You don’t have to agree with every decision they’ve ever made. And you can plan to put your own stamp on the practice after they leave.

But you do yourself a serious disservice if you don’t treat the seller (i.e. the person who will be transferring all the goodwill over to you) well through the deal process.

Remember, a dental practice is a living entity. It’s not like a piece of real estate - it needs to continue operating after the seller leaves. Why would you do anything to make that handoff more difficult?

Move Quickly

As the saying goes, time kills deals. Asking for a long, drawn-out process because you’re unsure about the deal is not a good way to operate.

No one wants you to buy something you cannot fully vet or fully afford. But our network of lenders, consultants, CPAs, and attorneys can move quickly.

If the iron is hot, it’s time to strike. Be ready, and when you see the right practice, move to make an offer.

Look for a Fair and Equitable Deal - and Pay Well

I understand that this might feel like naked self-interest coming from a broker. But lowball offers can be counterproductive even if you expect the seller to counter.

Remember again that the practice you want to buy isn’t just a physical thing. It’s comprised of a huge network of relationships that the seller maintains.

You need the seller to transfer that network along to you.

Consider the long-term view.

Great practices are hard to come by, and the cost of a start-up is sky-high. A good practice is a valuable asset that holds its value and allows you to start taking home an income from day 1.

(That said, there are deals to be had! If you’re looking for a great deal and are either willing to move outside the major metro areas or want to put in work to grow a smaller practice or a practice that’s been in decline, PLEASE let me know!)

All in all, the key is to be responsive, timely, and respectful. You’ll find yourself in a much better position and will move more quickly into your dream practice.

Is 2024 Your Year to Sell?

Do you actually want to keep practicing?

Or are you holding on because…the economy? interest rates? uncertainty?

If you fit in the latter camp, I would encourage you to seriously consider listing your practice for sale in early 2024.

We don’t know what the year will bring. We never actually do.

But I do know that demand for solid, cash-flowing practices is truly at an all-time high (especially in major metro areas). It’s a strong sellers market, and there are more qualified buyers out there than sellers.

And if you’re waiting for the right moment, consider using this month of December to think about why you’re holding on to your practice and what might come next.

Don’t be like so many of your colleagues that we see letting their practices decline for several years prior to selling.

Remember, you don’t just retire from practicing.

You also retire to a new life full of possibility and fulfillment.

Get connected with your local Integrity Practice Sales broker here.

Since it’s December 1st, here’s a little ‘Winder Wonderland’ - even though there’s no snow to be seen here in (brisk) but sunny San Luis Obispo.

And with that, I hope you enjoyed the 28th edition of The Build-Up Weekly.

With best wishes to you and your families,

Trevor Kimball, PhD

p.s. please consider using the link below to share our newsletter. 🙂 

These Six Mistakes Can Cost You Six Figures

Download our free guide “6 Mistakes to Avoid for a Successful Practice Sale” here. It’s material that I’ve covered in this newsletter before, but - if you’re contemplating a practice sale - the advice in this guide is crucial.

And if you’re ready to have a conversation with a practice sales professional, get connected with your local Integrity Practice Sales broker here.

It’s worth having a conversation, no matter your current transition plans.

You never know what you’ll discover together.