Avoiding the Pitfalls of Dental Practice Transitions – Part Six

In my last post on practice transitions, I spoke about the strategy of using an associate to help in the absorption of the patient base from a retiring doctor’s practice. The benefit of that approach is that it allows these patients to be seen at the office location with which they are familiar, and these patients are then gradually relocated to your office. But you can also be successful using your own office for an immediate absorption of patients from the practice of a retiring doctor provided certain criteria are met.

Geography. It is of paramount importance that your existing office be located fairly close to the location of the practice that you are acquiring so that patients will not have an objection to travel and an excuse to go elsewhere.

Age. This type of acquisition works really well when the selling doctor is quite a bit older than the buyer. I have seen many doctors practice into their late 70s. They love what they do, they have an extremely loyal patient base, and most of them never gave much thought to an exit strategy. They have slowed down  and are now perhaps practicing two to three days per week. There is a ton of dentistry to be done for these patients — but as I have said before – only at the appropriate time when you have earned their trust. So these are not big practices by any means. The equipment is usually very outdated. Often there is no management software. Often no hygienist. These doctors don’t necessarily need to make a big score with selling the practice. Rather, they are truly concerned with finding someone to take over the care of their patients.

Low cost. There really is zero value for the dental equipment or the location of the  retiring doctor. Many times these doctors are actually practicing in a home office. These patients need to be seen at your office from day one. So the value is only in the Goodwill. I usually recommend a price of $200-$300 per patient chart for patients seen within the last twenty-four months.

Introductory letter. The selling doctor is able to transfer and deliver these patients by a great letter of recommendation. I have examples — available on request — that have proven effective.

Ace in the hole. I absolutely insist in these kinds of situations that the front desk person from this retiring doctor’s practice stays on in your employ for a three to six month period. This person may in fact have considered retiring along with her doctor, but I advise making it a condition of the sale that she is able to come over and work in your office. Pay her extremely well. She can work two to three hours per day appointing the patients. You must at all costs win her over because these patients will do whatever she recommends. I can’t emphasize this point enough.

Start expanding your horizons – this type of situation may very well exist in your own backyard.