Paul Rang and Greg Auerbach
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A recent article from Forbes Magazine/Forbes.com reviewed the 10 highest paying jobs. Not surprisingly, topping the list was surgeons (averaging $225,390 per year). Of the top 10, seven spots went to medical professionals and two to dentistry, specifically oral-maxillofacial surgeons (No. 3 at $214,120) and orthodontists (No. 5 at $200,290).
The article mentioned the specialized nature of the top paid medical/dental professions as well as the considerable educational expense required to enter the fields. But what does this article mean for you?
While you may have even more requests to negotiate your fees as families are still mired in the difficult economy (track the economic outlook at http://economy.ADSflorida.com), more wide ranging is the reality of the financial needs within the profession and how you can best position your practice to make your transition a success. The reality is, while the “average earnings” of a general dentist were reported to be almost $159,000, for most purchasers the average simply isn’t enough.
In life, serendipity is often sweet; however, serendipity rarely works as a strategy for a practice transition. Thoughtful planning and preparation will yield far better results. So what can you do in the time remaining to make your transition a success?
Zero to two years from transition
Bring in a transition expert at this time. A detailed examination of your practice will probably reveal areas for improvement, but general cookie-cutter advice will not suffice.
Two to five years from transition
Review your fees and raise them wherever possible to be within the 80th percentile of local fees (contact your local ADS representative for a localized report). Look at staff salaries to make sure they are reasonable and reflect an individual’s qualifications. Determine whether your team members will be supportive of a transition. Look for untapped opportunities to bolster your patient base or procedures, but avoid adding specialty procedures, especially those that need special training or qualifications that may not easily transition. Avoid major equipment purchases or extensive remodeling projects, but look at minor esthetic upgrades (paint, flooring, etc.).
You may consider going digital or paperless, but realistically assess the cost and learning curve for your practice. Bringing in a transition specialist to do a “coffee stain tour” (see ADStransitions.com/articles, search Take the tour) or conducting your own tour will yield valuable opportunities for improvement.
Five to 10 years from transition
Consider everything in the two- to five-year plan. Reduce specialty procedures and become as mainstream within your practice area as you can by the time you hit year five. Ensure your practice systems and processes are running smoothly and efficiently. If they are not (or you don’t know), bring in a practice management specialist to help. If you’ve considered digitizing or going paperless, you definitely have time and it will prove an important asset in your transition.
10+ years from transition
Consider everything from the two to five and five to 10 year plans. The significant difference is that you now have time for your larger expenditures to pay off. Think about replacing major equipment or updating the office appearance. Digitizing and going paperless is pretty much a must.
Carefully consider technologies such as CEREC or CAD/CAM, as they still may not provide the payoff in transition. However, they may prove valuable to you while practicing and should be considered primarily in that respect.
While the statistics of the past predict a glut of dentists reaching transition age, recent news of new dental schools opening will change the projections of a vast disparity between retirees and graduates.
What isn’t changing is that future buyers will need to earn more from their practice than those of the past, and the best prepared practices will not only transition faster, but for a higher value. Cash is king, so increasing your practice’s net income is important, but how your practice operates and looks is no less important.
Remember, serendipity is not a plan. Prepare now.
Paul Rang, DMD, JD, and Greg Auerbach, MBA, are transition specialists with ADS Florida. They have consulted with, appraised, and transitioned dental practices in Florida and nationally. You may contact either at (888) 419-5590, ext. 239 or paulr@ADStransitions.com or grega@ADStransitions.com. Find more at www.ADStransitions.com and www.ADSflorida.com.