All Categories

WILL DSOs LEAD TO THE END OF PRIVATELY OWNED DENTAL PRACTICES?

5/15/2023

Not If Dentistry Follows The Path Of Pharmacy

Many fear that DSOs (corporate dental practices) are on a growth path that will lead to the eventual end of dentist-owned private practices.

Before we conclude the demise of private practice, let’s look at pharmacy. In the 1950s and 1960s pharmacy chains did exist but independently owned pharmacies were very commonplace. Now, as we see CVS, Walgreens, and Walmart pharmacies everywhere we turn, it might be easy to conclude that the growth in pharmacy chains has destroyed independent pharmacy ownership and made it a thing of the past. That is not the case.

HANDLING SELLERS’ ACCOUNTS RECEIVABLE -- Part 1

2/15/2023

HANDLING SELLERS’ ACCOUNTS RECEIVABLE -- Part 2

2/14/2023

(If you haven’t read Part 1 of this article – click here to read it first.)

Valuing Receivables: What Must Be Considered?

SELLING TO CORPORATE DENTISTRY (DSOs)

1/5/2023

In recent years, more and more practice sellers are considering sales to DSOs, or at least want to explore the possibility. Let’s look at two important issues related to DSOs.

Changes In Dental Practice Values - A 10 Year Study

12/29/2022

Are Practice Values Steady, Decreasing, or Increasing?

It’s a question we’re often asked. From our experience in helping dentists sell their practices, we know the answer from observation of our sales. To put the answer in a clear form for our readers and selling clients, we analyzed data on 835 practice sales over a 10-year period (2011 thru 2020). To assure that this analysis represented the overall practice sale market, the data we chose included some of the sales that we brokered, but it also included data from sales by many other practice brokers, accountants, and sale consultants. Sales chosen for the study were for practices collecting between $400,000 and $2 million per year because they represent 85%+ of practice sales in recent years. This selection excludes extremes at both ends of the range of annual collection.

SELLERS’ LETTERS TO PATIENTS

11/29/2022

6 Common Questions -- & -- Their Answers

When you sell your practice, expect that your Asset Purchase Agreement (Sale Contract) will include a section that addresses the letter that you will be required to send to your patients, introducing your buyer and describing what you will be doing, such as: retiring; changing your career direction; or, staying on to work in the practice for your buyer after the sale. If you don’t have this section added to your Asset Purchase Agreement, it is almost certain that your buyer will require it to be added.

THE MAXIMUM SALE PRICE FOR YOUR PRACTICE

11/15/2022

3 Things Determine It

There are some other factors that come into play but in most cases, for the most part, the maximum price that a seller can get for his / her practice is determined by:

The practice’s cashflow;
The bank utilized by the buyer; and,
The buyer him / herself.

SELLING YOUR DENTAL PRACTICE NOW OR WITHIN 7 YEARS?

11/3/2022

tAKE THIS 15 QUESTION QUIZ

Test Your Knowledge on 15 Issues Important to Practice Sellers

HOW IT WORKS:

This quiz is for general dentists only (not specialists).
Use your cursor to click on the answer(s) you want to select.
At the end of the quiz, click "SUBMIT". Your quiz answers will be emailed to Dr. Stollings.
Based on his 25+ years of experience in dental practice sales, Dr. Stollings will: i. grade your quiz; and ii. then email your graded quiz back to you along with explanations for all correct answers.
To Open the Quiz, click on "Read More" below and to the right.

MINIMIZING TAXES – THE ALLOCATION

11/1/2022

How To Handle The Expected Negotiation

There are a number of factors that are important when the goal is to minimize the taxes that you’ll have to pay on your practice sale price. As is commonly known, one of the most important factors is the amount of the sale price that is allocated to the sale and transfer of goodwill. Portions of the sale price allocated to goodwill will be taxed at long term capital gains tax rates. For most sellers, the long term gain tax rate will be less than the ordinary income tax rate that normally applies to the portion of the sale price allocated to the sale of tangible assets (equipment, instruments, etc.).

SHOW BUYERS THEIR INCOME POTENTIAL -- Not Just Your Tax Returns

10/25/2022

When a potential buyer considers a specific dental practice, the buyer wants to know what his / her annual income potential might be, if the buyer reproduces the seller’s level of production and collection.

YOUR TAX RETURNS ARE NOT ENOUGH

Most sellers realize that they will need to give potential buyers copies of at least 3 years of their practices’ tax returns. However, tax returns only show buyers the sellers’ taxable income. They do not show buyers what their income potential might be after the sale. Buyers may have some expenses that the sellers didn’t have. Buyers may not have some of the expenses that sellers show on their tax returns. Some of the buyers’ expenses may be more or less than those incurred by sellers.