The Dentist's Network #86

Thomas L. Snyder, DMD, MBA
Managing Partner
The Snyder Group, LLC
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What’s On The Horizon For Practice Transitions

As was our custom this year, here is our reflection on current economic conditions and how they may impact your practice transition plans. As the economy shows some signs of recovery, some may begin to consider “ramping up” their practice transition plans to get into high gear for 2010.

Many doctors have asked us if it is difficult to sell a practice in today’s economic climate. Well, the answer to this question is simply… it depends. As is always the case, location of your practice is the major determining factor. Practices in urban and suburban areas, particularly in desirable areas of the country, have many qualified purchasers “lining up” to buy a practice. Why so? As the last few years have been lean ones for dental practice sales, many doctors who would have purchased a practice if one were available, are still “on the hunt” to buy one. Therefore, the supply of qualified purchasers who are frustrated by not having purchased a practice already are usually the first in line to look at a new practice coming available in their market.

The good news for some potential sellers is that they may find themselves receiving a premium for their practice where there is high demand. The sad news is that many doctors who have excellent practices in small towns or rural areas are continually frustrated by the lack of interest for potential buyers. These doctors are earning considerable income with little or no competition. So, we tell our young doctors to consider purchasing a practice of this nature, rather than buying a practice in an area with lots of competition as well as higher practice sale prices. If young doctors want to get out of debt quicker, then consider this option!

We still see a number of dentists selling their practice to relocate to another area of the country. Although this trend still continues, frankly, the options to relocate to certain parts of the country have narrowed somewhat due to the Great Recession. Therefore, if you are contemplating a move to another part of the country this year, do your homework first by researching the area’s economy. We know of situations where doctors have relocated to an area thinking it to be desirable, but due to the economy, the area became distressed and suddenly their relocation plans went awry. This could be a very costly decision.

On the banking front, the lending landscape has changed dramatically. Some dental lenders disappeared from the market in 2009, and who is to say more won’t follow in 2010. One thing is for certain, lender requirements have tightened up significantly over the past year. Questionable loans that may have been funded in prior years are now being rejected. Many transactions whereby 100% financing was provided by the lender are now requiring the seller to hold a note for a portion of the sale price for a few years.

On the Purchaser's side, credit requirements have become more stringent, meaning FICO scores are rising and some lenders want to see some assets on the purchaser’s balance sheet. What this may mean for some sellers is a scenario where a practice can’t be funded by a bank and if the seller needs or wants to retire, then the only option may be to finance the sale by holding a note. We also continue to see a growing trend of deferred transitions. Recruiting a qualified candidate today and locking them into a future transition has become more common place. In the case of a future sale, requiring the purchaser to make a down payment to take the practice “off the market” is a must. Some lenders will now provide the down payment for a deferred sale so when it’s time to purchase the practice they will fund the entire transaction.

We have also seen a surge in partnership formation, as many doctors who desire to find the “right” candidate are locking them in to a plan that ensures their eventual buy out. Partnerships can be very complicated as to the many facets governing any relationship, so securing experienced advisors who know how to structure them properly is critical. There are many ways to share income and profits, and alternatives need to be explored carefully to meet the needs of each partner. Proper tax planning is critical for the doctor selling his/her interest in a partnership buy in or buy out, as the tax ramifications placed on the buying doctor can be severe if not considered properly. Well-crafted partnership agreements are essential to ensure that all contingencies that a partnership may face are clearly articulated so there are no surprises to either party. Experienced advisors can guide you along the path to forming a successful relationship.

In summary, it’s hard to be totally on target with any predictions, however, given our current economic climate, continued proper financial management is becoming more critical, regardless of what phase you are in your practice transition planning.

Dr. Thomas L. Snyder is Managing Partner of The Snyder Group, LLC, a nationwide practice transition and financial management consulting firm. With more than 75 years of experience in the field, The Snyder Group can provide you a full range of services relating to practice transition matters and retirement planning. They can be reached directly at 1.800.988.5674.

If you would like additional help, email Dr. Snyder at drsnyder@thedentistsnetwork.net.

Interested in having Dr. Snyder speak to your dental society or study club? Click here.

Hear Dr. Snyder’s FREE podcasts at The Dentist’s Network - HERE

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Sally McKenzie, CEO
McKenzie Management
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New Patient, Or Never To Be Seen Again?

You know the feeling you get when you sit in a new car, walk into a new home, or try out that new gadget? There’s an excitement and anticipation that you feel, and a potential and opportunity in that newness. You can see yourself enjoying the car, the home, the “toy.” New patients are no different. They also can be excited about the potential and new opportunity that your office has to offer, provided you help to encourage rather than discourage that excitement.

How do you really handle new patient calls and the overall new patient experience? Do you have time in the schedule to accommodate them? Are you creating both a welcoming and positive experience for new patients from the first call they place to your office to the moment they complete their first visit? Are you paying attention to the details or just going through the routine? If you’ve had your share of “new but never to be seen again patients” it’s time to dust off the top five “best practices” for welcoming new patients into your practice.

1. Be prepared to handle the demand. The worst message you can give anyone who calls your practice – new or existing patients – is that you don’t have time for them. Ensure appointments are available. To determine how much time you need to allocate in the schedule to accommodate new patients, look at new patient activity over the last six months. If you saw 60 new patients, that would be 10 per month and 2.5 per week. Reserve at least that much time in your schedule to handle immediate new patient demand. Be sure to reserve new patient time during the hours in which your practice experiences the greatest demand for appointments, typically, late afternoons, evenings, and Saturdays.

2. Never underestimate the expectations of prospective new patients. From the first phone call to your practice, new patients are judging every aspect of your office and your team. Patients expect their concerns and needs to be addressed expeditiously. They expect the staff to be welcoming and accommodating.

3. Manage the new patient’s expectations through excellent phone communication. Develop a script for the scheduling coordinator to use when handling new patient phone calls. Her/his voice should convey warmth, understanding, and a positive demeanor. She should come across as unhurried and helpful. If the receptionist answers the phone with a curt, hurried, or exasperated tone, the caller is immediately put off. If the receptionist is sincere and empathetic, the caller responds accordingly.

4. Send every new patient a Welcome Packet the same day they call to schedule their first appointment. This includes a brief letter from the doctor indicating his/her commitment to providing the best possible care for patients. It also emphasizes specific qualities about the practice that set it apart from others. Include the website address so the patient can learn more about the practice and complete necessary forms online. The Welcome Packet also should contain a business card and a map to the office with the phone number.

5. When the new patient arrives, they should feel like they are the most important person in your office. If the patient has not already submitted necessary forms via fax or online, politely explain to the patient precisely what needs to be completed. When the paperwork is finished, the treatment coordinator should escort the new patient into a consult room where the forms are reviewed and, most importantly, the coordinator can discuss the excellent care available in the practice – again according to a well-developed script. Pay attention to the questions the new patient asks and the comments they make. These provide insight into their oral health goals, objectives, and possible concerns.

The assistant then introduces herself to the patient and seats them in a treatment room, followed immediately by the doctor. The doctor then asks the patient a series of questions beginning with, “What brings you to our office today, Mrs. Jones?” The objective is to learn what is motivating the patient to seek dental care, and determine the patient’s wants, needs, and expectations for their dental care. The focus is on what you can do for the patient, not what you are going to do to the patient. Yours may be the most clinically superior practice in the entire region, but how the new patient feels about the doctor, the staff, and the experience overall will determine if they are a returning patient or never to be seen again.

Sally McKenzie is CEO of McKenzie Management, a nationwide dental management, practice development and educational consulting firm. Working on-site with dentists since 1980, McKenzie Management provides knowledge, guidance and personalized solutions that have propelled thousands of general and specialty practices to realize their potential.

Interested in speaking to Sally about your practice concerns? Email her at sally@thedentistsnetwork.net or call 1.877.777.6151.

Interested in having Sally speak to your dental society or study club? Click here.

Hear Sally’s FREE podcasts at The Dentist’s Network - HERE

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Dr. Lorne Lavine
Dental Technology Consultants
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Dentists Climb For A Cause

My good friend Danny Bobrow’s day job as president of American Dental Marketing is helping dentists grow their practices. Since 1994, he has also directed an intriguing and vital organization called Climb for a Cause whose purpose has been to raise funds and provide services for those in need of dental care. In founding and running Climb for a Cause, Danny has been able to simultaneously indulge his four passions of dentistry, the outdoors, fitness, and giving back. In the process, he has adapted Ben Franklin’s sage advice and made it his own: “Do well by doing good...and having fun.”

Each year, Climb for a Cause selects a special venue for an exhilarating Labor Day weekend series of events, culminating in a challenging hike. I’m proud to say I have supported and participated in nearly every event since CFAC was founded - my only challenge has been the fact my now three year old son’s birthday often falls on that weekend. The destination and itinerary for 2010 are special indeed: the incomparably beautiful area in Oregon known as the Three Sisters Region.

The itinerary, subject to slight revision, includes:

Tuesday, August 31st: participants arrive
Wednesday - Saturday, September 1st-4th: Mountain Biking, Kayaking, Moonlight Canoeing, Rock Climbing (at world renown Smith Rock) and Caving
Sunday, September 5th: Summit attempt of one of the Three Sisters, followed by gala post-hike celebration and awards ceremony
Monday, September 6th(Labor Day)

To me, the beauty of this enterprise is how it offers dentists’ and their teams a way to give back, while growing the practice and having fun at the same time.

For practices who are unable to physically attend the Annual Event, they can demonstrate their commitment to philanthropy by volunteering for one of the DCFAC-supported dental education and treatment projects (in 2010, trips are planned in Guatemala and Nepal) as well as become a “Branch Practice” of the newly rolled-out Smile Tree. To join the latter, practices need only donate a dollar per exam, in exchange for which they receive a plaque signifying their status as a Branch Practice of The Smile Tree, as well as lapel buttons, press releases, regular updates on how funds are being used, and a number of benefits.

Speaking of benefits, and in keeping with his ‘win win’ credo, Danny has arranged for all DCFAC Supporters to receive:

Deeply discounted online C.E. courtesy of www.DentalEDU.tv I particularly like this recent innovation as, in the past, C.E. was offered during the Annual Event which, while convenient, meant that much less time was left to enjoy the surroundings and partake in the available activities
DCFAC Only Specials offered by Loyal Team Rewards and Loyal Patient Rewards
Gifts and assistance, courtesy of a number of other dental organizations that are being added all the time.

Of course, I offer all “DCFACers” free telephone-based consulting.

Although no experience of any kind is required, those planning to participate in the events can expect to be challenged physically. Speaking from my own experience, I will share that having a specific goal can be an excellent impetus to maintaining or improving one’s physical conditioning. The events themselves offer an unsurpassed blend of spectacular scenery, invigorating exercise and outstanding camaraderie.

And don’t expect this to be a ‘boy’s club’ either. The split between male and female is usually near parity. So, boys and girls, I hope you’ll consider helping Danny Bobrow, president of American Dental Marketing and founder of Climb for a Cause. Remember, you don’t need to physically climb to climb for a cause. You can join the Smile Tree, or be a “virtual climber” like Scott Emalfarb, D.D.S. did. His August, 2009 Party With A Purpose raised nearly $3,000 supporting Climb for a Cause.

Fund-raising parties can be a terrific way to strengthen relationships with current patients and generate valuable exposure to prospective patients. Studies show that consumers are more likely to support a company or organization that is associated with a worthy cause than one that is not. Moreover, the mountains have a healthy, adventurous cachet that will likely enhance the image of any organization involved with these events.

Challenging economic times can exact a disproportionate toll on the underprivileged, as charitable donations are often the first expenditure targeted by cost-cutting businesses. Fortunately, supporting Climb for a Cause allows a dental practice to grow its business while still giving something back to those who are so deeply in need.

Lorne Lavine, DMD is the Founder and President of Dental Technology Consultants. Dr. Lavine holds two prestigious certifications, the A+ Certified Technician designation and the Network+ Certified Professional. These designations demonstrate proficiency in computer repair, operating systems, network design and installation. Dental Technology Consultants provides dentists a full range of services relating to the implementation of technology.

Interested in having Dr. Lavine speak to your dental society or study club? Click here. Dr. Lavine can be reached at drlavine@thedentistsnetwork.net.

Hear Dr. Lavine’s FREE podcasts at The Dentist’s Network - HERE

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