Understanding Dental Practice Valuation: Treatment Plans

Eighty percent, that’s the goal.

When you’re buying a dental practice, Your treatment philosophy and that of the seller should match up well—even if it’s not 100%.

Why is that? There are two reasons: one is qualitative, all about what kind of dentist you want to be; the other is mercenary, all about collections.

It simply won’t be much fun for you to step into a practice with long-time patients and staff who are used to a conservative approach, if you’re bringing an aggressive, sales-focused philosophy with you. You’ll clash with the people around you, and your first months in this new career phase will leave you exhausted and maybe miserable, instead of energized and excited.

If you and the seller are reasonably close in your philosophies, though, things will go much more smoothly. Everyone—including you—will be much happier getting off on the right foot.

On top of that, you’ll make more money.

Continuity is the name of the game here.

Avoiding shocking, sudden changes is important for retaining both your staff and your patients. If the long-time patient sits in your chair and you recommend immediate fillings for four minor cavities when the previous dentist would have taken a slower approach, that patient will notice. They might roll with it…or they might shop around for a dentist that has the approach they’re used to.

Every dentist buying a practice worries about patient attrition. And they should! Kind of. It’s actually not as big a problem as most buyers think. But that’s because most buyers adhere to this idea of matching well with the seller. It does happen sometimes that a buyer comes into their new practice, makes massive changes to the treatment approach, and loses large portions of their staff and patients.

Believe me when I tell you that finding new staff will be a pain—and expensive. And if you lose patients? That’s immediately impacting your bottom line. And when you have a practice loan (not to mention student loans) to pay off, that’s the last thing you can afford.

If you find a practice you’re interested in buying, don’t just look at the numbers. Be sure you have a candid conversation with the seller about their treatment philosophy. Again, you’re not looking for a perfect match, just close enough that stepping into the role of owner won’t be too much of a shock to the practice’s system.

Have more questions? Give me a call! I’d love to connect and help you on your journey to ownership.