One year later. Where are practice values and why? It was like a bad dream. One year ago, our world changed forever. The pandemic raged throughout the world, and resulted in the immediate shutdown of the traditional dental market. The pandemic had more significance for the dental industry as one of the first outbreaks and tragedies was related to the popular Pacific Dental Conference.

Dentistry is a very challenging profession. Not only do you have to be an excellent clinician, you have to be a part-time psychologist, a savvy marketer, be knowledgeable in human resources, and understand how to run a business.

As the Baby Boomers wish to sell their practices, some say that there will be only a limited demand and as such your practice will lose a lot of its value. I do not believe this is true. By taking certain precautions, you can ensure that your practice will sell for what it is currently worth or more.

I know it is a morbid subject and I have avoided writing about it for many years, however some of this stuff needs to be talked about. As is the case with most of our articles, the subject matter usually arises due to recent transactions or situations that we have been involved with and this issue is no exception.

This is the 75th edition of The Professional Advisory. To mark that milestone, I would like to review a major shift in the dental market that has occurred in the 15 years we have been publishing, and how this change affects practice values and represents significant challenges for ongoing success into the future.

Recently my 22 year old daughter returned home after graduating from university. She shared this story with me and I asked her to share it with you as I believe this real life story has valuable lessons for all of us connected to dentistry. This is certainly not directly related to my traditional subjects in dealing with the value drivers when buying and selling a dental practice. It is however, vitally important as the intangible she refers to is goodwill which as you’ll see has immeasurable value to her, and to most patients. Here is her story.

The transition from being an owner of a dental practice to being an associate in that same practice can be a very smooth and rewarding time in a dentist’s life. Smart buyers know that the goodwill they are purchasing, which forms a significant part of the purchase price, is transferred more effectively if the seller stays on for a while. Both buyers and sellers of dental practices find this time somewhat challenging as the roles of each are changing dramatically.

In today’s competitive environment, the business of dentistry is inextricably woven in with the clinical aspect of dentistry. For many dentists, this development is juxtaposed from their beliefs regarding their responsibilities as a health care professional. There are many ways to measure success in dentistry. Is it the beauty and fit of your crowns? The number of new patients you get? The tenure of your staff? The financial results of your practice? Your happiness? Of course all of these are important factors and everyone will place different emphasis on each. We will take a look at the dental practice as a business and examine the factors that should be considered to keep that business vital and valuable.