There may be few things in a dentist’s life more difficult, indeed traumatic, than retiring from dental practice. It’s not something most dentists want to think about, let alone plan for. But not planning can have multiple consequences that can affect the price of that practice. 35 years or more in practice will likely cause dentists to be pretty set in his or her ways. What looks OK to a retiring dentist may look old, worn out or stodgy to an incoming buyer who could be 25 years younger. That manual ledger that has served so well over the years to keep the practice on track will look absolutely obsolete to a millennial. What will a buyer think about after seeing equipment, systems and décor from the 1980’s? Either “I’m not touching this practice” or “I’m going to have to spend a lot to get this office updated right from the beginning. “ So, the consequences of “not keeping up” at least to a minimal degree, both in terms of things that show (like computer equipment) and things that don’t show (like attitude) can have major consequences in the value of the practice. Further, the practice may not even be sellable. Here are the top 10 areas that should be looked at, ideally five years before a sale is contemplated. If a year or less is the practice sale objective, it may be too late, or not be worth the expense of changing.
This article originally appeared in The Profitable Dentist magazine from Spring 2017.
1. Outdated Computer Systems
There are multiple ways to computerize an office these days. It can go anywhere from managing the appointment book to managing the day to day receivables operation like processing charges and collections. This simply involves the everyday use of practice management software like Dentrix or Softdent. Just as important, the use of digital x-rays requires a computer system which is almost always networked or connected around the office. All these systems need advanced software and hardware. Any one of these elements that is not fully functional, dysfunctional or missing will detract from the value of the practice.
2. Decor That is Older Than 10 Years
The wallpaper that looked good 25 years ago; paint that is peeling or chipping; carpets that are everywhere; green leather chairs in the waiting room…All these elements can make a practice looked tired and old. Young dentists will be turned off by things that are more likely seen in their parents or grandparents house than in a modern dental office.
3. Film Chemistry Instead Chemistry Digital X-Rays
While the processing of x-ray film may be working well with the selling dentist, it simply doesn’t fit into the scheme of a new owner. Film chemistry isn’t even taught at dental schools anymore. This is another “antique” item that will be seen as a distinct negative from the buyer’s perspective. In addition, looking up old “films” vs. digital files by a new owner is onerous.
4. Manual Schedule Books and Ledgers
Dentists do love their manual schedules. They even keep them around after computerized scheduling is used. Manual ledgers can remind a buyer of Ebenezer Scrooge pouring over his books. Modern software systems are reliable and have really made these paper systems virtually obsolete.
5. Clutter that Shows
While that pile of unused equipment in a spare room (that has now turned into a storage room) might be OK while it’s out of sight, a new buyer is going to look into everything. This is a relatively easy one to change into something more presentable before the sale process begins. What is important to remember here is that appearances count. Neat=efficient=cost effective.
6. Bathrooms that are Stodgy With No Feminine Appeal
Don’t forget that women make most of the decisions regarding where they go with their family for dental care. For that matter, no one likes a bathroom that looks like the back of a takeout Chinese restaurant. It’s a turnoff. This is another relatively easy one to fix. Dentists may not be good at fixing this themselves. Consider using an expert decorator! After all, if you need equipment, you will probably use an expert to help you out. Small things matter, in perception as well as in dental work.
7. Decreasing Productions in the Final Years Before a Sale
While you may think this area may be beyond your control due to changes in the insurance marketplace, your medical status, or general economic conditions; it’s also very much a matter of mindset. If you are getting tired or burnt out, it will show. Tired doctors=tired dental appearance=tired practice to a potential buyer.
8. Poor Disinterested Attitude
Updating isn’t just for the office…it pertains to your thinking as well. A client who shows disinterest in the sales process will make it next to impossible to recruit an interested buyer. They will pick up on this and walk away.
9. Doctor Ego That Gets in the Way
We don’t see too many dentists who are aware of this issue. If they were, they likely wouldn’t have a problem with it. When a dentist feels so important that only their perspective counts, then a sale will be extremely difficult, if not impossible. This attitude gets in the way of everyone, buyer and transition consultant alike, who is involved in a transition.
10. Lack of Flexibility
This may be the most important item on the list. Inflexible sellers may only want a particular sale price under particular conditions. This can clash mightily with the marketplace and the perspective of a prospective buyer. When the sales process gets contentious, there are no winners, only very sore losers. As you can imagine, it will take considerable time to not only reflect on these issues, but remedy those that you choose to remedy. Some of these will take money and some will take an adjustment in mindset. But, the more you can remedy these deficiencies, the easier, more remunerative, and pleasant the transition process will be!
Dr. Ron Linden is a recently retired clinical dentist. He had a solo practice in Connecticut for 36 years. He was active in the Connecticut State Dental Association, serving in a variety of leadership positions. He now is a PARAGON consultant for Connecticut and parts of Massachusetts and Rhode Island