DPT Quarterly Newsletter - November 2021 - 1
Transitions
Experience, Information, Consultants You Can Trust
Congratulations!
Lisa L. Loftis, D.D.S., PA to
Leah Efird Warford, D.D.S., PLLC,
Malvern, AR
Anaheim General Dentistry Practice,
Anaheim, CA
Oakland General Dentistry Practice,
Oakland, CA
Alan Rembos, D.D.S. to
Mary Hand, D.M.D., Ft. Myers, FL
Pamela J. Evans, D.D.S. to
Clay Celander, D.M.D., Jacksonville, FL
Premier One Implant Centers, Inc. to
Ilshahuome Dental Surgery, LLC,
Attleboro Falls, MA
HSM Dental PLLC to
Joel Kerwin, D.D.S., Hartland, MI
James R. Mongiello, D.D.S., PC to
Dena Hanna, D.D.S., Kings Park, NY
L. Bruce WIlliams, D.D.S. to
Donald Chapman, D.D.S., Salisbury, PA
Mathis Ferry Dentistry LLC to
Hayes Dental LLC, Mount Pleasant, SC
Destined Dental PLLC to
Tennessee Family Dental Care-Bellevue, PC,
Nashville, TN
Midlothian Family Dentistry to
David Wurtzbacher, CFO,
Midlothian, VA
VIEW MORE SOLD LISTING
ANNOUNCEMENTS!
As our profession rebounds from the
Pandemic, we should be thankful that
most patients have returned to visit their
dentist especially in 2021. According to
the American Dental Association's (ADA)
Health Policy Institute monthly member
survey, it was reported that as of August
16, 2021 patient volume was at 89% of
pre-COVID-19 levels. On the economic
front,
general
practitioners' income was
down 17.9% in 2020 versus 2019.
Specialist income, however, fared better
with only a 6.9% reduction in 2020 from
2019 levels. From our current observations,
many practices are having very strong
performances in 2021 so a " catch up " in
income levels is not unrealistic. During the
ADA Health Policy Institute surveys in mid2020,
many doctors over the age of 65
stated that they would seriously consider
retiring or selling
their practice in 2021
if their 2020 numbers were not that of
2019. However, this did not materialize in
2021 nearly at the level that was originally
predicted. Perhaps many of these doctors
evidenced a strong rebound, and decided
to remain in practice for the time being.
For those of you who experienced a strong
rebound you may have done yourself a
favor by increasing your practice's value,
and this may be the stimulus for you to
implement your exit strategy in 2022.
The most important factor which will impact
your practice's value is its location. Practice
values continue to remain at record levels
nationwide. In many urban and suburban
areas, which are considered highly desirable
for most purchasers, practice valuation sales
ratios vary for general practices between
70 to 85% of last year's gross receipts. In
desirable markets, those ratios may be even
higher! For specialty practices, valuation
ratios range typically between 65 to 80%
of last year's gross receipts and again are
highly dependent on the practice's location.
For those doctors who are solo practitioners
some words of caution are appropriate.
There has been a growing trend of recent
November 2021
Looking Ahead to 2022
grads having the desire to practice in a group
practice setting. In support of this trend is
data that was collected by the ADA's Health
Policy Institute reporting that only one in five
dentists under the age of 35 were interested
in being solo practitioners. So, with about
50% of dentists still being classified as solo
practitioners this trend may have an impact
on your transition planning as the supply of
potential purchasers is limited. An alternate
option to consider is selling your patient list
to a practice in your area that would like to
grow its patient base but isn't interested in
practicing at your location.
Another major contributor to high practice
values is
the
continual growth of DSOs
and private equity firms who oftentimes will
pay a premium to purchase a practice in
a desirable market. You may be surprised
to find that although you may get a sale
price well more than 100% of last year's
gross receipts, there may be terms as well
as conditions that you must meet in order
to get your full sale price. The bottom line
is that you will usually not have a full cash
offering at closing. It may take you a few
years to realize the financial results.
On the dental lending front, interest rates
still and may remain low at least for a
good portion of 2022. Partnerships and
practice mergers are also becoming
more commonplace as or our profession
trends toward a multiple doctor practice
environment. For well-established doctors,
recruiting qualified candidates today and
locking them into a future transition plan
has also become more commonplace.
Thus, we see a growing number of dentists
considering a shorter partnership buy-in (five
years) and then completing their transition
with a buyout to retirement.
In summary, it's hard to be totally " on target "
with any predictions. Remember that sound
financial and transition planning, coupled
with good practice fiscal management, are
key ingredients to your success whether you
have short-term or long-term transition plans.
HenryScheinDPT.com
866-805-2807
HenryScheinPPT
866-439-6412
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DPT Quarterly Newsletter - November 2021
Table of Contents for the Digital Edition of DPT Quarterly Newsletter - November 2021
DPT Quarterly Newsletter - November 2021 - 1
DPT Quarterly Newsletter - November 2021 - 2
DPT Quarterly Newsletter - November 2021 - 3
DPT Quarterly Newsletter - November 2021 - 4
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