Your Top Priorities in a Transition
There are two important things that make a successful dental transition:
- You want to keep your staff (the good employees, at least)
- You want to keep your patients
Here’s Brian talking about your top priority: keeping your staff after you take over.
Here’s Brian talking about retaining existing patients.
Basically, you want a smooth transition without sudden changes so that you don’t disrupt what’s already working. Then, you can gradually improve on things once you’ve settled in.
Helping dentists overcome transition challenges is our specialty. Let’s take a deep dive into the intricacies of the dental practice transition process and simplify one of the toughest steps in buying a dental practice.
What Is a Dental Practice Transition?
A dental practice transition is the process of transferring ownership and management of a dental practice from one dentist (the seller) to another (you). It is a key part of your practice purchase journey.
It follows after negotiating the terms of the sale, getting financing, and closing the deal.
As a dental consultant, I often work with buyers who are excited about purchasing a practice but feel overwhelmed by the complexities of the transition. I show them how to navigate the transitional process in a way that doesn’t alienate staff or patients.
What Is a Transition Schedule?
You definitely want a clearly-defined transition schedule that both you and the seller have signed off on.
A transition schedule is a detailed timeline and transition checklist outlining the key steps and milestones for phasing out the current dentist and installing a new dentist as the owner and operator of a practice. It provides a structured framework to ensure a smooth and well-organized transition for the following stakeholders of the practice.
- The current dentist (seller)
- The new dentist (buyer—you)
- The dental practice’s patients
- The dental practice’s staff
A transition schedule should cover the following aspects of the transition process:
- Staff communication and training. Outline the process for introducing the new owner/management to the staff, conducting team meetings, and providing training on any changes in policies, procedures, or technology.
- Patient notification. Specify how and when patients will be informed about the transition, including any changes to appointment scheduling, billing, or contact information.
- Financial and legal matters. Address the transfer of financial accounts, insurance contracts, and legal documents, ensuring a smooth transition of ownership and compliance with regulatory requirements.
- Equipment and technology transfer. Detail the process for inventorying, transferring, or updating dental equipment, technology systems, and software, ensuring a seamless integration for the new owner.
- Branding and marketing adjustments. Discuss any necessary updates to the practice’s branding, signage, website, and marketing materials to reflect the new ownership and ensure consistent messaging.
- Continuity of patient care. Emphasize the importance of maintaining high-quality patient care throughout the transition, including guidelines for preserving patient records, treatment plans, and ongoing relationships.
- Timeline and milestones. Provide a clear timeline with specific milestones and deadlines for each transition task, helping to ensure that the process progresses smoothly and efficiently.
- Roles and responsibilities. Define the roles and responsibilities of key stakeholders, including the outgoing owner, incoming owner, staff members, and any external consultants involved in the transition.
- Follow-up and evaluation. Include a plan for post-transition follow-up to address any lingering issues, gather feedback from staff and patients, and evaluate the success of the transition.
- Contingency plans. Anticipate potential challenges or unexpected events that may arise during the transition and establish contingency plans to address them effectively.
Avoid These Transition Mistakes
When transitioning dental practice ownership, I see four common mistakes. Watch out for these red flags and pitfalls.
- Seller wants to sell the cow yet keep the milk. Avoid unreasonable demands from the seller, such as long-term employment guarantees or excessive involvement post-sale. Ensure the seller has clear retirement plans and is ready to let go.
- Seller not actually ready to sell. Before financing and closing on a practice, ensure the seller has thoroughly reviewed their finances and confirmed their ability to retire. Don’t waste time and resources on a deal that the seller is not financially prepared for.
- Getting married without even having met. Avoid entering into long-term partnerships without first establishing a trial period as associates. Ensure compatibility in treatment philosophy, work style, and personality before committing to a long-term partnership.
- Saving a dime to pay a dollar later. Don’t skip the essential step of formalizing agreements and contracts. Protect both parties’ interests by valuing the practice upfront, drafting employment agreements, and involving legal counsel. Invest in professional guidance to avoid conflicts and disputes down the line.
By avoiding these transition mistakes, you can ensure a smoother and more successful transition process for you and for the seller. Our dental practice consultants can provide valuable guidance and support, helping you navigate these potential pitfalls and achieve a seamless transition.
Hear how one new owner managed the transitional period.
Frequently Asked Questions on Dental Practice Transitions
How do I run an efficient dental practice?
To run an efficient dental practice, focus on optimizing workflow, enhancing the patient experience, and maximizing productivity. Streamlining administrative processes, implementing effective scheduling systems, and leveraging technology can improve operational efficiency.
Additionally, providing comprehensive training for staff, fostering a positive team culture, and continuously evaluating performance metrics will contribute to a smooth and efficient practice.
Assessing your practice’s unique challenges and implementing dental practice management strategies is crucial to enhancing efficiency and productivity.
I’m hiring an associate. How do I introduce the new dentist?
Creating a warm and welcoming environment for both the existing team and patients is crucial when introducing a new dentist to your practice. Start by informing your team about the new dentist’s background, qualifications, and areas of expertise, emphasizing the value they bring to the practice.
Communicate the news to your patients through various channels, such as email newsletters, social media, or personalized letters, highlighting the new dentist’s skills and commitment to excellent patient care. Encourage the new dentist to engage with the team and patients, fostering open communication and building relationships to ensure a smooth transition and positive reception within the practice.
What are the 5 phases of dentistry?
The five phases of dentistry refer to the sequential steps involved in delivering comprehensive dental care:
- Assessment and diagnosis
- Treatment planning
- Treatment initiation
- Treatment progression
- Maintenance and prevention
Why do patients leave a dental practice?
Patients may leave a dental practice for a multitude of reasons, including dissatisfaction with the quality of care, poor communication, long wait times, high costs, or negative experiences with the dental team.
They may also leave for reasons that have absolutely nothing to do with you, such as a move, a death in the family, or a career change.
What dental practice pays the most?
Among dental practices, oral surgery tends to be one of the highest-paying specialties. Oral surgeons perform tooth extractions, dental implants, and corrective jaw surgeries, which require advanced skills and specialized training.
Owning this practice type may offer higher earning potential compared to a general dentistry practice. However, income can vary based on factors such as location, experience, patient base, and practice management efficiency.
How do you build a strong dental team?
Building a strong dental team starts with hiring the right people who possess the necessary skills, qualifications, and values that align with the practice’s vision. It’s important to create a positive and supportive work environment that fosters teamwork, open communication, and professional growth.
Regular team meetings, training programs, and performance evaluations can help enhance skills and maintain motivation. Additionally, strong leadership, effective delegation, and clear expectations from the practice owner or manager play a crucial role in nurturing a cohesive and high-performing dental team.
How profitable is owning a dental practice?
Owning a dental practice can be highly profitable, but it depends on various factors such as location, patient base, services offered, and overhead costs.
The profitability can further increase if the dental office also owns the real estate, as it provides additional income and the potential for appreciation. Some dentists choose to expand their profitability by owning multiple practices, leveraging their expertise and resources across different locations.
Read our page on dental practice profit margins to learn more.
What is transition planning in healthcare?
Transition planning in healthcare is the strategic process of preparing for changes in the ownership, management, or structure of a healthcare practice. It involves creating a comprehensive plan that outlines the steps, timelines, and considerations involved in smoothly transitioning the practice to new ownership or leadership, ensuring continuity of care for patients, and minimizing disruptions.
What does SDE mean in dentistry?
Seller’s discretionary earnings (SDE) is a financial metric used to assess the profitability of a dental practice.
SDE is calculated by adding the owner’s salary, net profit, interest expense, depreciation, and any other discretionary expenses back to the practice’s net income.
To figure out SDE, start with the practice’s net income and then add back the owner’s salary, any personal expenses paid through the practice, and non-essential expenses that could be adjusted or eliminated under new ownership. This calculation provides a clearer picture of the practice’s true earnings potential and helps buyers assess its value.
Consulting with a dental practice consultant or a financial professional who specializes in dental practice transitions can provide more guidance on calculating SDE accurately for a specific practice.
What are the types of dental practice transitions or deal structures?
When it comes to dental practice financing and deal structures, there are several options.
- Buy-in deals. A dentist joins an existing practice as an associate or partner with the intention of eventually buying a portion or all of the practice. This type of practice transition provides a smooth pathway for both the buying dentist and the selling dentist, ensuring continuity of patient care and practice success.
- Buy-out deals. One dentist (usually a partner) buys out the ownership interests of another dentist in an existing practice. The buying dentist assumes full ownership and takes over the responsibilities of running the practice, while the selling dentist transitions into retirement or a different professional role.
- Mergers. Two or more existing dental practices combine into a single entity. Usually done as a strategic decision for practice owners to expand their patient base, enhance services, and optimize operational efficiency. A practice merger can happen between practices of similar sizes or by one practice acquiring another.
- Roll-ups. The consolidation of multiple dental practices into a single entity, often led by a larger leadership team, such as a dental organization or management group. The goal is to create operational efficiencies, enhance economies of scale, and leverage shared resources for improved profitability.
Do you have any success stories?
We have dozens of success stories. Here’s one:
Recently, a successful dentist with a thriving practice approached me with an exciting proposition. She had been discussing a potential merger with a nearby dentist who shared similar values and a complementary skill set. However, they were unsure about how to proceed and wanted guidance to ensure a seamless transition.
During our initial meeting, she expressed her concerns about merging two established practices. She was worried about the integration of staff, patient retention, and maintaining the unique practice culture that had contributed to her success. I reassured her by outlining a comprehensive plan tailored to their specific needs.
With my support, they successfully merged their practices, combining their expertise, patient bases, and resources to create a stronger, more comprehensive dental practice. Today, their merged practice continues to thrive, providing exceptional care to their expanded patient community while maintaining the values and culture that made each practice unique.
See our case studies for more success stories.
What is ADA Practice Transitions?
ADA Practice Transitions are guidelines offered by the American Dental Association (ADA) for dentists who are looking to buy or sell a dental practice or seek associateships. It provides a platform where dentists can find suitable dental practices, navigate the transition process, and receive guidance and support from experienced professionals.
Our dental practice transitions team is up to date with the latest dental transition trends and practices set by the ADA. If you are preparing to sell your dental practice or want to buy a practice, we are here to assist you every step of the way.
Trust us to handle the details and provide valuable insights based on our experience working with dentists like you. Don’t navigate the dental practice transition process alone—let us be your trusted partner.
Whatever stage of the acquisition journey you’re on, we’ve got you. Click on any of the topics below to learn more. Or, reach out and contact us to discuss how we can help.