21 Jul How To Maximize Your Practice Value Before A Transition
By Tabitha Jaquay Fernandez
20% of your patients will generate 80% of your practice production.
Determine who makes up that 20% and focus on asking for referrals from those great patients you already have in your office. They are the ones who show for their appointments, are on time, proceed with the work you diagnose, and pay their bill. Patients who walk into your practice typically proceed with $1,200 worth of dentistry. Whereas a patient who is referred to you moves forward with $2,500 worth of dentistry. Which one do you want more of?
Just having a website doesn’t cut it anymore.
Patients have to be able to find your site readily. If you are not on page one when a patient searches for dentists in their area, then you have lost 90% of the potential patients. Why? Most will NOT click page two of their internet search.
Online patient reviews are crucial.
Not only can people find out more about you and your practice before they ever arrive, but they also start to build a comfort level immediately through the reviews. Build the patient’s confidence that they will be well taken care. And big bonus…online reviews help with SEO and rankings too.
Market condition is key.
If you are thinking you may want to transition in the next 3 years or less, we need to talk NOW about the market. There are more than 50% of the dentists in Oklahoma who are retirement age. Waiting could devalue your practice greatly unless you are still growing your numbers and NOT just coasting by. Remember if you aren’t seeing growth and your costs are still increasing year after year you are truly in a decline.
Practice overhead matters!
If you have seen a decline in production and collections, this starts throwing your overhead out of whack. Since you probably do not have a practice loan at this point, and you most likely have already paid off your building loan, the decline may not be affecting you very much. Keep in mind that a buyer will have a loan on the practice and a mortgage on the building so it MUST cashflow for the new buyer and the debt they must service. If your office is stagnant or in a decline, staying for another 3 years will only hurt your value.
The bottom-line is keep it business as usual. Here are ten tips in preparing for a transition:
- Keep promoting the practice and getting new patients.
- Keep the staff unless they are negatively impacting the office.
- Do not do any major remodeling or make big equipment purchases.
- Don’t discuss plans with the team that may cause panic.
- Clean out old charts and clean up accounts receivables and patient credits.
- Deep clean the office.
- Do not employ any unusual marketing efforts.
- Do not give any unusual salary increases.
- Associates should have a restrictive covenant.
- DO NOT TELL patients you are planning to retire soon! You need your patients intact when you sell and not already looking for another doctor. A strategic rollout is crucial to maximize the patient retention for the buyer.
The practice transition process may be a one-time experience for you, but it is the only thing we do every day. Let Jaquay Enterprise help you make a smooth transition.
Tabitha Jaquay Fernandez
Phone (405) 834-8653