If you’re an associate dentist, take a look around at the office you work in and ask yourself: Would I buy this practice?
Now, that may be a moot point. Maybe you want to settle down elsewhere, or the owner is too young to sell yet. The point isn’t whether you should or shouldn’t buy this particular practice; the point is to start looking at practices with an eye toward ownership. And what better place to start?
(Or maybe you’re in a position where you really could buy that practice! If so, then this question is obviously very relevant.)
If you eventually want to own your own practice (I assume you do, since you’re subscribed to this newsletter), then use this as a chance to do a “mini practice evaluation.”
So what should you look for? How do you know if the practice would be worth buying?
The straightforward answer is to look at collections. The magic number is $800,000 or more in annual collections. A practice bringing in that amount is probably healthy and well run, and worth a look as a potential owner.
But there’s a big problem. As an associate, you might not have access to those numbers. So without knowing collections, how else can you assess the health of the practice?
Here are two data points worth looking at:
1. The schedule
How full is the doctor’s schedule? What about hygiene? I like to see the doctor’s schedule booked out for 3-4 weeks in advance, and hygiene booked out for 6+ weeks.
2. Staff turnover
Some turnover is normal. A lot of turnover is not. Is there a constant, revolving door of assistants, hygienists, and desk staff? If so, it likely indicates that the owner isn’t running things effectively, or that there are other mitigating factors you should look into before considering buying the practice.
Neither of those data points is a hard number like collections, but both give you a starting point for assessing the practice you work in to see if it—or one like it—would be worth buying. And hey, the sooner the better.