VIDEO: Selling Dental Practices Made Simple | Georgia Dental Practice Broker Matt Poppert

in my experience the value is the the

dentist has owned this asset something

that they've poured their Blood Sweat

and Tears into for anywhere from 10 to

35 40 years um and in my experience the

the actual process of selling a dental

practice is an incredibly emotional

process for them because they've spent

more time with the staff and the

patients they've typically seen

grandparents and parents and kids and

grandkids um and they've got staff that

they've spent more time with in that

time frame than they have with their own

family as well so an analogy that I like

to use is that I've got a daughter and

I've told her that she can get married

anytime she wants to after I'm dead but

she's probably not going to listen to me

and she's going to make me walk her down

the aisle and I think that that's that's

as close of an analogy as what I can

give for when a doctor is getting ready

to sell their practice ice and I think

that it's important as somebody going

through a very emotional process to have

somebody guide them through it and this

process has become very technical and

typically the doctor wants the right

person for that practice um so if that's

the case working with a professional

that can go out and gather the right

types of people for them to be able to

interview and bring in to make sure that

they're getting the right person to

carry on their legacy is very important

then you go beyond that and you just

have all the intricacies of what happens

what happens in this process um and how

uh complicated those things can be and

to be able to protect that good willll

having an intermediary can be a huge

benefit as well because a buyer a lot of

times may get emotional about something

and if that conversation isn't had

properly it can burn some of that

Goodwill with the seller and vice versa

where I don't get emotional about this

and a buyer or seller may say something

to me that's emotional but it's not

going to get translated to the other

party in that emotional manner so I

think that kind of summing that up

you've got just the process of finding

the right person handling all the

intricacies of a very complicated

business transaction and then also

looking out for and protecting the

Goodwill of the buyer and the seller as

you're going through that process

it's interesting I tell people I went

back and got my MBA back in 2010 and I

jokingly tell people I should have

gotten a degree in counseling because

that's essentially what a large part of

what I do is is help manage the emotions

of the process so you have the the

emotion of the seller who spent their

entire life involved in this practice

with these patients and then you've got

a young doctor that has a whole bunch of

clinical training and typically a few

years of clinical experience

but most of them have no experience

reading a profit and loss statement or

understanding how to manage a team so as

you go through this process as I uncover

kinks in the process or what I call a

pinch point when you start peeling that

onion back it's typically on the buy

side am I getting what I'm paying for

which is ultimately just the Goodwill

it's the reputation of that seller and

on the cell side A lot of times it's as

simple as can this young person handle

this or what I like to say don't drop

the baby um so so yes it can be managed

but it's t typically in my experience

the best way to manage it is putting a

good team around both parties right so

making sure that that seller and buyer

both have their own attorneys that have

done hundreds of these Dental

transactions and understand how they

work and having a good dental CPA that

can help them on the financial side so

the young doctor that does doesn't

understand that or have the experience

has somebody in their Corner that can

help guide them and and walk them

through that and get them comfortable in

understanding it and then with um the

seller what are the tax implications and

making sure that they've got somebody

that can guide them through how to

properly set that up and then I like

both sides to have a financial planner

um you know the buyer's going to need a

good dental lender but putting those

teams around is what I found to be about

the best way to help control those

emotions as they're going through it and

then when there is a pinch point we talk

about

it yeah so I spent a little bit of time

in the Marine Corps and in the Marine

Corps we had a we had a saying called

the six PS of of the Marine Corps which

were proper prior planning prevents poor

performance and I think as far as when

is the earliest time or when should they

start when I went through business

school um one of the first things they

taught us is when you start a business

the same time you're starting a business

you're starting to think about how are

you going to exit what's the succession

plan so you're always thinking forward

now that that uh goal is probably going

to move as you go through the process

however if you constantly are looking at

and saying okay what is my business

valued at how am I growing my business

and how can I transition out you will be

prepared for when that comes so I don't

think there's a time that's too early to

start thinking about it um typically we

like to have conversations as early is

10 plus years prior now if you're

already 2 years out or if you're 6

months out we need to have that

conversation and again the old saying

the best time to plant a tree was 20

years ago or today so um the earlier the

better it's just going to give us a

better time and a better footprint to be

able to start planning and putting all

of the things in place that are going to

help the doctor have the best and most

successful transition they can

have if so there's aign or there's

typically language in every lease called

assignment language so if somebody's

going to come in and buy your practice

they're going to need that buyer is

going to have to have that lease

assigned to them so they can own that

business the bank needs it in place they

need to have a place to practice they

can't buy it and move across the street

the bank's just not going to allow it so

as a a doctor that owns a practice

that's in a lease space whether it's the

first time they get to that lease whe

whether it's a renewal option at any

point where there's some type of an

execution of that lease they need to

have a dental attorney review that lease

and make sure that the assignment

language is as friendly as possible

because and also what is their

responsibility after that assignment has

been uh transacted on so for example are

they still going to have to be a

guarantor post assignment so the earlier

they can start that and get that type of

language in there and get as tenant

friendly business and legal language put

into that lease the better and easier

it's going to be the ones where the

landlord just comes in and says hey go

ahead and sign this we've had our

attorneys already look at this those are

typically the you don't need to have

somebody look at it those are typically

the ones that end up getting us in

trouble um as we get to that point and

unfortunately from time to time a

landlord can end up making it very

difficult possibly killing a lease or

possibly devaluing the practice so it's

a very very important thing to have an

attorney review that or work with a

professional a a dental real estate

professional that can help them make

sure that they've got good language in

there yes so I think that there's a time

and place for for all of these things

right I think there's a lot of

misinformation about dsos and a lot of

times when I talk to doctors sellers

they think their only option is to sell

to a DSO because they've heard the

propaganda of oh they're buying

everything up and this is this is the

only option you have young doctors can't

get money or young doctors don't have

that entrepreneurial spirit and and they

don't want to own well our data shows

the exact opposite of that so our data

shows that about 70% of the sellers we

sell to are private individual doctors I

recently spoke with my Bank of America

rep they did over 800 million in

transactions last year with dentist 75%

of those were firsttime independent

buyers so there's a large buying group

out there of private

doctors um so the the first thing is

that one it's not the only option that

they have but for some sellers the DSO

option is the right and I'll give an

example if you've got a $3.5 million

practice it's going to be really hard to

find an individual that could come in

and get financed and be able to take

that over especially then you say well

the average buyer is 32 years old taking

over a business that big that doesn't

really even have the skills it it's

really really difficult to do and

sometimes the the best option is to find

a good DSO to roll that practice up to

transition that practice to that's going

to protect the legacy of that practice

there's a lot of value in selling to an

individual and let me back up those DSO

transactions are incredibly complicated

and you're dealing with people that are

professional buyers so going back to the

value in a broker having somebody that

can help guide you through a DSO deal is

imperative we have seen millions of

dollars left on the table because people

went unrepresented in those types of

transactions a private buyer I think the

real value there is and again if I talk

to 10 dentist nine of them are telling

me I'd prefer to sell to a younger

version of myself in those scenarios

what typically they want is they want to

protect that Legacy that the doctors

created and

the individual buyers are out there that

Legacy can be protected these banks are

happy to give these young doctors money

even though they've got debt and if you

look at the statistics of what a

practice owner makes versus what an

associate makes they're in a better

position to own a practice from a

financial standpoint than they are from

being an associate so there's a

motivational factor for them to do it as

well but those young young doctors are

no different than the group that is

currently transitioning out that they

want to be able to practice the the way

they feel is the right way to practice

and in that private environment they get

the opportunity to be able to do that um

so I think that there's a time and a

place for both there's value in both the

big thing for me is to truly understand

what is the sellers motivation what are

their goals and then be able to help

guide them and say you know this route

or this route or maybe a combination the

two is the way to to take a look and

move forward with with their transition