Imagine that you buy a practice and on your first day of ownership, the police come busting through the front doors with guns drawn.
This is a true story of a client of mine, and that’s not even the craziest part of the story. The really crazy part happened two weeks before that, and it almost became the mistake I see so many dentists make.
Dr. Josh Matthews is a former Army dentist. Salt of the earth, father of three, the kind of guy who grew up around dentistry. His dad was a dental service tech and his mom was a hygienist, and the dinner-table wisdom was that if you go into dentistry, you own your own practice. After the Army, he followed his wife’s medical career to Wisconsin, knew nobody, couldn’t find a private practice job, and took a DSO associateship to get his bearings.
In his words: “I think they undersold it to me. I didn’t really realize the dumpster fire I was walking into.” Years of revolving-door dentists had wrecked the place. Patients were furious. Josh spent two years stabilizing it while searching for a practice to buy in his free time, running the playbook I outline in How to Buy a Dental Practice. He warmed up his network, made new dentist friends and even started the postcard campaign we teach. Before the postcards finished their work, his network did. A local banker and a supply rep both knew a veteran dentist thinking about selling. Prior military, like Josh. “You guys should talk.”
They talked. Then they had dinner. Then more dinners. “My wife jokes that we were dating for about six months before we actually started pursuing the practice,” Josh says. When the deal came together, it came together on a real foundation: a healthy, cash-flowing practice, big enough for two doctors, from a seller whose philosophy matched his. Price tag: a loan of about $800,000.
Then, as Josh put in his notice, the DSO’s CEO called. He had an offer: Buy the struggling office Josh had spent two years holding together. The patients, the equipment, help with a website and a new sign. The total price tag: $75,000.
“For $75,000, I was like, oh my God, I don’t know if I can not do this,” Josh says. “You can’t buy the equipment or even half the chairs for that.”
“For about 72 hours I was panicking. Am I crazy for taking an $800,000 loan out and buying this practice when I could write a check right now?”
Every buyer gets some version of those 72 hours. When you’re staring at nearly a million dollars of debt, your brain hunts for an escape hatch, and fear dresses the cheap option up as the safe one.
What would you do? Option 1: solid practice, but a loan of $800k. Option 2: buy the office where you’re already working for $75k total.
Two things pulled Josh out of the spiral. The first was math. He reached out to our team, we ran both scenarios, and the numbers were clear: Practice 1 for $800k was already cash flowing and would immediately put a lot more money in Josh’s pocket, with less stress, than the bargain that would need years of rebuilding. The cheap deal wasn’t a discount. It was a down payment on someone else’s headache.
The second was his wife, who needed no spreadsheet. Every single day for two years, she reminded him, he’d come home from that DSO hating it. A private equity backed company had poured money and marketing into that office and it was still failing. What was he going to do differently? “Yes, it’s cheap,” she told him, “but there’s also a reason that it’s cheap.”
Put that on a plaque.
Josh closed on the more expensive practice. Which brings us back to Monday morning, day one. In the blur of closing on a Friday and starting clinical work three days later, nobody had given him the alarm code. He was first in the building. The alarm went off. He tried 1-2-3-4. It was the panic button. Police arrived in two minutes, guns drawn. Whoops.
Four weeks later, a storm dropped fifteen inches of rain and flooded the building. The equipment was older than he’d like, so he spent evenings fixing it with his service-tech dad on the phone. Ownership is not a montage. It’s work.
That first month was a LOT of work with two very scary disasters on the scoreboard. But after a full year as an owner? Much more happiness, more job satisfaction, and more money. Josh now works four days a week. Three-day weekends, every weekend, with his wife and three kids. The seller stayed on as his associate, still working four days, which means when one of them goes fishing, the doors stay open. He makes considerably more than he did as an associate. “If I need time off, I literally just take the time off,” he says. “I’m very glad that I did it.”
When I asked what our team actually did for him, I loved his answer, because it points both directions: we “helped me be more confident that I wasn’t making a mistake buying the practice, and helped me be more confident that I wasn’t making a mistake not buying that DSO practice.”
Sometimes the most valuable thing an advisor does is tell you which of the two deals on your desk is the real one.
Cheap isn’t the same as safe. If you’re staring at your own version of the $75,000 trap right now, that’s exactly the conversation to have with someone who has run those numbers a few hundred times. Let’s look at both deals together.
And please, get your alarm code before Monday morning.
Set up a complimentary strategy call with the Dental Buyer Advocates team today.
Not quite ready for a conversation? Start with the free chapter of How to Buy a Dental Practice. It covers the first steps most dentists get wrong.
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Brian writes one of these every week.
