Orthotown September 2016 - 33

feature \\ practice management What makes a transition successful? Depending on which side of the table you're seated at, the answers may be different. Message-board postings on Orthotown.com highlight the concerns of experienced and new practice owners alike, and it's amazing to see the varying comments and perspectives from both sellers and buyers. A couple of the topics discussed recently include: Is it beneficial for the seller to stay-and if so, for how long? How do you handle staff? And a topic sure to raise some eyebrows: What about buying a general dental practice to support the orthodontic specialist? We've culled some of the best answers to help you discover what your fellow Townies had to say. TOPIC: Setting the price and phase-out period Townie: hoodortho I'm currently wanting to relocate to a different state and am getting in touch with the orthos in the area for practice opportunities. I have my eye set on one, which I would hope to buy relatively soon (he claims to want to sell it), but my gut tells me that the ortho is someone who will be difficult to work with and could potentially make a transition a nightmare-definitely a type-A personality. That being said, there aren't many opportunities in the area, so I'm talking with the provider just to find out what his plans are for his practice and sort of see where this goes. What is a reasonable transition period for the sale of a practice? Ideally, I would like to take over the day I sign papers (or soon after) and keep any overlap relatively short. Is there a "good" amount of time that it would be wise to have him stick around to transfer goodwill, meet referring docs, finish cases, etc.? He hasn't given me any concrete numbers yet, so I have no clue what his practice is making, but he keeps insinuating that he will be asking a lot for it. In fact, he mentioned 110 percent of production at one point in our discussion. Should I just say, "No, thank you," and walk on? Thank you in advance. Townie: Dr Van Halen Asking 110 percent of production is ridiculous! Of course he would like to get that-who wouldn't? I would not do a deal without some type of valuation being performed on his practice. If your gut instinct is that this is not a good situation or person, don't waste your time or energy. Townie: r-1 When I was looking to buy a few years ago, I talked with several transition specialists who said that 100 percent of one year's collection was fairly typical for orthodontic practices in which the seller had kept up with technology, up-to-date equipment and chairs, etc. If this person is willing to do seller financing at a low interest rate, this may not be so ridiculous. (Just my opinion.) I agree with a quick transition! Townie: swamp fox My thoughts: 40 percent of the gross fees-that's the goodwill-and then plant equipment on top. Generally the equipment is not worth much, especially in an older practice. I would stage phase-out over three years: Year 1, he works three days a week; Year 2, two days a week; Year 3, one day a week. Over that time, he finishes all patients and starts none, and all new referrals go to you. That way you maximize his goodwill in the practice. It also ensures he finishes the crappy cases and gets them into retention. You could perhaps pay him a salary over the three years, and all the rest of the direct debits to go to you. orthotown.com \\ SEPTEMBER 2016 33 http://www.Orthotown.com http://www.orthotown.com

Table of Contents for the Digital Edition of Orthotown September 2016