The office had been listed with a broker and hadn’t sold. Here’s the introduction that got him in the door.
Before Josh Matthews bought his dental practice, he went out for a burger and a beer with the owner.
They had talked on the phone first. Then dinner, then a conversation about treatment philosophy, then more conversations after that. It went on for months.
“My wife jokes that we were dating for a few months,” Josh told me.
There was a reason the seller was taking his time, and there’s a reason Josh got that dinner at all. Both reasons had to do with a broker.
What the seller had already tried
The practice was a good one. Six operatories in suburban Wisconsin. A solo doctor busy enough that he hadn’t accepted a new patient in two years because he had nowhere to put them. Two hygienists, two assistants, one front desk. Collecting a little over a million dollars a year. The asking price was $860,000 – on the higher end of “average”, but close to fair for that quality of practice in that geography.
It HAD been listed with a broker. One of the big ones in the area.
The broker brought the seller several buyers. Those visits didn’t go well. By Josh’s account, the experience left the owner discouraged enough that he shelved the whole idea for a while.
So the practice was technically for sale and effectively not.
Meanwhile Josh was about a year and a half into a job at a DSO office nearby that was falling apart around him. The billing department had turned over. Patients would call the number they were given for billing questions and never reach a human. For a year and a half before Josh arrived, the office had run on temp dentists, so patients saw a different face at every cleaning. The two brothers who built the practice had sold it and retired years earlier, and whatever patient loyalty they had earned was long gone.
Six months in, Josh started looking for a practice of his own.
Here’s how he found the practice he bought. A banker he’d been talking to locally knew a supply rep. The rep sells burs and endo files, and he’d been walking into that office for years. He knew the owner wanted out. He made the introduction.
Who hears about it first
Last week I wrote that the best practices for sale aren’t always listed. Josh’s story is what that looks like in practice.
A listing is one way into a conversation, and a good broker earns the fee. But in the purchases I’ve advised on, a listing is often not where a practice starts. It’s where one lands after a first attempt didn’t go the way the seller hoped, which is close to what happened here.
So the question worth asking isn’t only “where are the listings.” It’s “who hears about it first.”
Think about who sits close enough to a practice to know the owner is tired. The supply rep who’s been walking into that office every few weeks for eight years. The local banker who financed the build-out. The CPA who prepares the return and hears the owner say he isn’t sure he wants five more years of this. The attorney who wrote the lease. The specialist down the road who takes that practice’s referrals. The equipment tech who keeps talking the owner out of replacing a compressor.
None of those people are trying to sell you a practice. Most of them aren’t thinking about you at all. Which is exactly why they’ll tell you what they know, if they know you’re looking.
What that requires of you
Setting up an email alert on a listing site takes four minutes. What works more often takes longer, because it means telling actual people, who know and like you, that you’re out looking.
Not “let me know if you hear of anything.” That gets you nothing. What tends to work is a lunch, phone call, or email exchange where you talk shop, ask for some wisdom from the grizzled veteran that ends with the ask: “if you hear of anyone selling their practice in the area, would you mind putting me in touch?”
Be specific enough that someone can recognize a useful introduction six months from now, while they’re standing in an operatory listening to an owner complain about his back.
And when the introduction happens, remember it’s common to connect as humans first before tax returns get exchanged. Josh’s seller was vetting him, because the last round hadn’t gone well. Josh was vetting the seller too. That’s what the burger was. Meanwhile our team was running the numbers in the background, because a good dinner tells you nothing about whether a practice can support you, and a spreadsheet tells you nothing about the person you’ll be working beside through the transition.
Josh needed both. Most buyers do.
How it turned out
Josh turned down the $75,000 problem office and bought the good practice for $800,000, sixty thousand under the asking price.
A year in, the seller is still there as his associate. The whole team stayed except one person who left for a career change. The practice is up in collections about 27 percent.
He’ll also tell you he’s working harder than he did as an associate, and that there are still days he doesn’t feel ready to own a practice. That’s a different conversation, and we had it on the podcast.
Free live session: How to Find a Dental Practice for Sale.
On Friday, October 2 at noon Mountain time / 2 p.m. Eastern, I’m walking through exactly this: where to spend your search time, how to hear about practices before they’re listed, and what I’d do this week if I were the one looking. Free, live, and everyone who registers gets the recording. Join us here.
Hear Josh tell it himself. The full conversation is on the Practice Purchased Podcast, including the call he got from the DSO’s CEO three days after he gave notice, offering to sell him the office he already worked in for $75,000. Listen here.
