Go From Preparing to Practicing Dentistry

Completing dental school is an amazing accomplishment. For so long, your days have been full of learning what you love and chasing the goals you’ve longed to achieve. You’ve worked hard to get where you are, and your career is closer than ever. But, before you wear that white coat, you might be wondering what it’s like outside the classroom and inside an actual office. Oftentimes, newly graduated dentistsfind that they feel alone as they stumble through the unfamiliar realms of sales, customer service, and hiring staff.

At Ascent Dental Solutions, we know exactly what it takes to run a practice, maintain a practice and grow a practice – and we’re here to help you do the same. So, what should you know before you get there? How can you ensure your success as you transition from student to dentist?

By this point, we know you have the skills to serve patients and perform the routine duties that come with being a dentist. But, we also know that dental schoolrarely prepares you for the day-to-day issues that are just as important. Sure, you’ll spend a lot of time fixing teeth and filling cavities, but you should be spending just as much creating, maintaining, and improving your dental practice. This is essential in providing the upmost of patient care and offering quality services that will help your practice grow.

As with most jobs, your success starts with how hard you want to work. To make the most of your dental career and run a practice you’ll be proud of, Dr. Kevin Coughlin can help. As a 35+ year veteran of dentistry, he runs a successful multi-location dental practice in Massachusetts. He’s also one of a small amount of dentists in the country with both a Fellowship and Mastership in the Academy of General Dentistry and has worked with both DSO’s and MSO’s during his career. But beyond serving patients, he also loves helping new dentists discover the joy in establishing their careers – and he’s coached countless of them to prepare them for this leap. Whether you’re planning to start your own practice or join an existing one, Dr. Coughlin can make sure you’re prepared and help you establish a success plan for your career path.

Having a leader to learn from can be the key for your career. You’ll increase your confidence, gain first-hand knowledge from one of the best in this business, and relieve stresses that might be holding you back.

Find out more about Dr. Coughlin’s proven blueprint for success, and how you can use it as you trade in the classroom for your long-awaited career.

Manage Your Dental Practice. And Your Time.

Life is busy. The days go fast and the years seem to speed by – especially when you’re running your own practice. You’ve learned by now that being a dentist can be a demanding job, but just as equally rewarding. The key is mastering your schedule and making a plan so you’re not constantly running all over the place and working longer hours than planned. You’ve worked hard to get where you are, and you deserve to make the days go as easy as possible. So as your patient list gets longer and your availability gets smaller, you need to figure out how to manage the clock as best as you can.

These time management tips can help you get through the day not just more easily, but more effectively.

1. Ignore your phone.

Checking your phone in between appointments can mean working longer hours. Not only is it a distraction, but it can take up longer time than you think. Instead of picking up your cell, focus on other tasks you need to get done so you can complete your day earlier. Set aside a specific time of day to catch up on emails so that it’s not a distraction.

2. Don’t do it alone.

Just because you’re the boss doesn’t mean you have to control everything. You’ve hired employees for a reason, and they’re here to help. Stick to your dentist duties and don’t be afraid to delegate the rest. Assign specific tasks for each role in your office and let your team members do their jobs. If everyone does their work diligently, you’ll find you can dedicate your time more beneficially to the more important matters.

3. Take care of your team.

A successful office starts with a happy team. If they’re doing their job to the best of their ability, yours will be so much easier. Remember that they are the face of your office and the reason it runs smoothly. Make sure they have proper training so they feel

empowered. Provide good scheduling software so they can plan and prioritize quickly and simply. Take their feedback seriously and listen to their suggestions.

4. Put the patient first.

You (and your team) won’t have to spend so much time trying to make sure patients are happy if they feel comfortable and accommodated. And when they are, they’ll tell their friends. (Easy advertising!) Small things like providing good reading in the waiting area, fun activities to keep kids busy, a nicely decorated office, and a space that feels welcoming will go a long way. Go above and beyond where you can. Give gifts (everyone loves free stuff!) and a new tooth brush or travel size toothpaste is an easy, practical giveaway.

5. Have a site that sets you up for success.

Being a dentist today is a lot different than years ago. Now, patients can help make your job a lot easier, saving you and your staff a lot of time. Having a good website can reduce phone calls in your office, which will give your employees more time to focus on other duties. (Plus, it can keep your patients happy because they’ll avoid long wait times to speak to someone.) A good website will review the services you provide and share important information that answer basic questions like available hours, services offered and current team members.

6. Take a break.

Running around from morning to evening can be exhausting – and not very productive. One of the best things you can do for yourself – and your patients – is to set aside time to rest and reset. It doesn’t have to be very long, but it does need to happen. Set aside at least a half-hour each day as quiet time to let your mind take a break and to think about the nonclinical tasks you need to get through before you head home. Remember that working on your business, not just in your business is essential for success. It might be hard to find time to “give up” but this time will help you be more effective in the long run – and your practice and patients will be better for it.

The rise of corporate dentistry is relentless

The rise of corporate dentistry is relentless. With rapid expansion and almost limitless budgets, dentist/owners are being forced to compete against entities with incredible purchasing power and efficiencies of scale that are almost impossible to achieve as a solo owner.

Shockingly, many dentists aren’t even aware of this growing threat to their business. Corporate dentistry  – which include Managed Service Organizations (MSOs) and Dental Service Organizations (DSOs) – is growing at a rate of between 40 and 45 percent each year.

What is the difference?

Dental Service Organizations are usually chains and run like franchises. Some have a universal look and feel along with strict franchise practices and branding. Some existing dental practices may be permitted to retain their own unique character and feel. However behind the scenes the operations are often changed to favour certain suppliers and adopt uniform business practices.

If you are a dentist who hates the nuts and bolts of running a business, I can certainly see the appeal of such an arrangement. However, if you are like myself, and have an entrepreneurial outlook, such a scenario might seem a bit constrictive.  

The bigger issue is with the second type of corporate arrangement, Managed Service Organizations or MSOs, and its relationship to venture capital and equity firms.

Equity firms typically invest short-term.  When they get involved with dental firms the goal is to triple or quadruple their money over a 3 to 7 year timeframe. This puts a lot of pressure on the dentist and staff as the investors constantly demand increased efficiencies to maximize profits. If you hated running a business before, this model is not going to change how you think about it.

Long-term sustainable growth is not the goal. Maximizing return for investors in the short term is. Indeed what often happens is that the practice is flipped to new ownership frequently as the old owners cash-out. And the process of revenue squeezing starts all over again.

This focus on short term results can damage a practice’s reputation in the community and leave it open to competitors who are taking a longer view and choose to compete on service rather than price.

In the end how you run your business is up to you. The important thing is to have all the information and understand the ramifications, both positive and negative, before you make any decisions.

Ready to Get Started?

If you are interested in learning how to take your dental practice to the next level, please contact Ascent Dental Solutions today at 413-224-2659 to learn how Dr. Coughlin can help.

Dental associations need more business education programs

As a dentist it’s very unlikely clinical skills are your biggest challenge. Dental schools are very good at teaching the mechanics of our profession.

What they are not so good at is preparing us for running a business.

For most of us it’s a trial by fire. The average dental graduate comes out of school with a mountain of debt.

According to the American Dental Education Association (ADEA), the average debt per graduating senior is $287,331 (according to a 2017 survey).

That’s a big hole to dig yourself out of.

And starting a practice of your own isn’t cheap either. According to Bank of America, the average cost to set up a dental practice is just over $400,000.

That’s just the start up costs. Let’s say you’ve managed to secure financing and open your doors. Being a dentist today is not the same as it once was. Where we once were able to grow our business over decades, today there is increased competition from Managed Service Organizations and Dental Service Organizations that can leverage their size and buying power to negotiate better deals than a single dentist can hope to get in their wildest dreams.

At this point you might be thinking that there is really no hope. But that’s not the case. These organizations got where they are in the marketplace because they identified the lack of business experience most dentists bring to the table.

As a working “wet-finger” dentist myself, I believe it is the responsibility of  local, state and national dental associations to help their members learn more about what they are facing and give them the tools to compete against these MSOs and DSOs so they can continue to thrive and grow.

In addition to one-on-one coaching and consulting for dentists, I regularly offer free webinars to dental associations to bring attention to this issue. If you are in a leadership position at your association send me a note and let’s talk about a free session for your members.

If you are a member, make an introduction. Connect me with your programming or education person and I’ll do my best to set something up so you and others in your dental community can learn more about MSO’s, DSOs and corporate dentistry.

Selling a Dental Practice to a Corporate Buyer

If you are selling your dental practice, it is important to be aware that not all buyers are individual dentists. Corporate buyers are becoming more and more common. The two categories of corporate buyers are dental management organizations (DMOs), and small group networks (SGNs). The main differences are that DMOs are large, owning from 30 to several hundred dental practices, and that DMOs have virtually unlimited resources. SGNs are small, typically owning less than 20 dental practices, and are limited in their available investment capital.

Assessing the Offer

Regardless of which type of corporate buyer has put an offer on the table, it is important to carefully assess the offer. Fortunately, there are 5 simple steps to help you decide whether the offer is right for you.

Know your value: You cannot accurately assess the offer that is made unless you understand the valuation of your practice. There are numerous ways to perform this valuation, and there are many complex factors that can affect the value. Therefore, a professional valuation is always advised.

The buyer may make an offer that is significantly higher or lower than your valuation. If this happens, it is important to learn why. Get professional advice if you are considering an offer outside your valuation range to be sure you are getting a fair deal.

Understand the buyer: You probably already know that you need to investigate the financial strength of any prospective buyer. For a corporate buyer, this should include asking your accountant to review the company’s earnings expectations, financial statements, and tax returns. Also check references and reviews, with an eye toward developing an informed picture of the company’s track record of purchases and sales.

In addition, it is important to understand the buyer’s goals. Corporate buyers want to acquire the existing patient base and grow the practice’s profitability. They generally want to retain the current owner as a manager, which may or may not interest you. They also have an existing transition process focused on cutting costs and maximizing revenue. Your economic goals become tied to the corporation’s.

Know the payment structure: Regardless of who buys your practice, financing will likely be involved. With a corporate buyer, though, the structure may be highly complex. For example, a portion of the purchase price may be contingent on your ability to hit certain goals and objectives over a predetermined number of years. In addition, you may receive a portion of the purchase price as equity in the company rather than cash. You may even be required to purchase additional equity.

Know the risks: Signing a contract with a corporate buyer involves a great deal of risk. You do not know the corporate buyer that well, and there is no recourse for equity stakeholders if the company goes belly up. However, if you are willing and able to assume the risk, are willing to work hard to hit goals and objectives, and feel confident in the purchasing entity, you could make a strong return on your investment.

Because corporate purchase agreements are highly complicated and involve high levels of risk, it is vital to seek professional advice. Only you, your financial advisors, and your dental business advisor can determine whether a corporate buyer makes sense for you.

Ascent Dental Solutions is a full-service agency dedicated to helping dentists build their practices and map out their careers. It is the brainchild of Dr. Kevin Coughlin, who earned his doctorate at Tufts University School of Dental Medicine and currently serves as a faculty member there. While Dr. Coughlin continues to practice dentistry as the principal owner of the 14-location Baystate Dental PC, he has a strong passion for helping fellow dentists maximize their success. If you are interested in learning how to take your dental practice to the next level, please contact Ascent Dental Solutions today at 413-224-2659 to learn how Dr. Coughlin can help.

Dentists need to adopt a business mindset

I’m a working dentist.

However, all my success has come because I run my practice as a business.

If there is one major complaint I have about dental schools, it’s that they focus on the skills you need to perform exactly one half of your job – clinical skills.

But being a successful dentist who runs one or more practices takes a lot more than knowing your way around the gumline. It takes business sense.

When I was starting out I had to learn these lessons. I wasted a lot of time and a lot more money making mistakes and learning from them. In the end I figured it out and was able to grow my business to include 14 practices.

I did this by developing processes and procedures that I was able to replicate over and over again.  

Today’s young dentists have it even harder. Many of them graduate with so much debt that setting up a practice of their own right out of school is prohibitively expensive. So they join an existing practice as an associate.

Even then there is very little preparation provided in schools to help them land that first job or succeed and prepare for a financially secure future.

That’s not to say established dentists don’t have their own issues when it comes to the business of running a practice.

With Managed Service Organisations (MSOs) and Dental Service Organizations (DSOs) growing and expanding into just about every marketplace, established practices are increasingly feeling the competitive pinch.

It hard to compete when your competitor has the power to muscle suppliers and vendors because of the scale of their purchasing power.

So can an independent dentist succeed in this environment? Of course they can. But it means managing the practice as a business first. Dentists need to constantly reevaluate processes and procedures and offer superior service that makes every patient a brand ambassador who happily refers them to friends and family.

So how do you develop the skills necessary to manage your career in this business? If you are struggling at the beginning of your career or you are worried about MSOs and DSOs eating your lunch then you might want to start by looking at coaching programs for new dentists or advanced business coaching for dentists.

I’m happy to chat and help you decide what your next steps should be so that you can enjoy the success you deserve without wasting a lot of time trying to figure it out yourself. Drkevin@ascent-dental-solutions.com

A Simple Dental Practice Appraisal Formula

Whether you are buying or selling a dental practice, the method used to appraise the practice can make an enormous difference in the success of the transaction. An accurate appraisal is vital for many reasons, including but not limited to:

Decreasing selling time

Boosting both buyer and seller confidence

Reducing the risks of practice failure during the transition

Better financing options

Simple Dental Practice Appraisal Formulas

There is no single best way to appraise a dental practice. It is both an art and a science, and is best performed by an expert. Still, it is important to understand the common appraisal formulas that are used.

Income-Based Valuation

Income-based valuation is the best way to appraise most dental practices. It is simple and easy to follow, and works particularly well for practices that have strong, growing patient bases and a history of revenue growth. There are two income-based valuation methods.

Capitalized earnings: This valuation looks at the practice’s net income for the prior year or the average of the past few years. The net income is divided by a cap rate of 25 to 31 percent to determine the fair market value.

Discounted cash flows: For this method, the next 10 years of net income are projected, and then converted to a net present value. The projections are based on a reasonable growth in costs, and then discounted by the assumed cost of capital plus a premium of 23 to 31 percent.

Market-Based Valuation

This valuation method assesses the market data of similar dental practice sales in your region. It is based on historical collections data multiplied by 60 to 80 percent. Although market-based valuation is appropriate in some scenarios, it is often considered less reliable than income-based valuation.

Net Asset Valuation

Net asset valuation considers both tangible and intangible assets. Tangible assets are physical property such as real estate and equipment, while intangible assets include practice goodwill. Since an estimated 80 to 85 percent of the value of a dental practice is intangible, it can be difficult to accurately appraise practices in this way. However, this method is useful for practices with either significant tangible assets or financial difficulties.

Appraising a dental practice is not easy. You can use a simple appraisal formula to get a rough idea of what your practice is worth, but only a professional can fully determine the best valuation method and take into account all the little details that can dramatically affect the final appraisal.

Ascent Dental Solutions is a full-service agency dedicated to helping dentists build their practices and map out their careers. It is the brainchild of Dr. Kevin Coughlin, who earned his doctorate at Tufts University School of Dental Medicine and currently serves as a faculty member there. While Dr. Coughlin continues to practice dentistry as the principal owner of the 14-location Baystate Dental PC, he has a strong passion for helping fellow dentists maximize their success. If you are interested in learning how to take your dental practice to the next level, please contact Ascent Dental Solutions today at 413-224-2659 to learn how Dr. Coughlin can help.

Estimating the Cost of Buying a Dental Practice

Whether you are fresh out of dental school or have been working as an associate for several years, the time may come when you want to buy your own practice. More and more dentists are choosing not to go this route, opting instead for corporate dentistry, but there is an undeniable appeal to owning your own practice. Yet it can be tough to figure out exactly how much it will cost to buy a practice. Here are some considerations.

Valuation

The valuation is simply how much the dental practice is worth. This is determined by formulas that range from simple to highly complex, and is always an approximation. Still, the valuation is the jumping off point for negotiating a purchase price, so it is important to have a professional appraisal. Common valuation methods include:

Income-Based Valuation

Based on either capitalized earnings or discounted cash flows, income-based valuation works well for dental practices that have a strong history of growth. This type of valuation can be more challenging for newer practices and those that have gone through financial issues.

Market-Based Valuation

Market-based valuation can be a desirable choice for a newer practice without much history, as it is based on the market data of similar practices in the area. However, it is not generally considered as reliable as income-based valuation.

Net Asset Valuation

Net asset valuation attempts to put a dollar figure on not only tangible assets like chairs and real estate, but also such intangibles as the goodwill the practice has developed. It is tricky, since as much as 85 percent of the value may be intangible, but can be the right choice for practices that have had financial problems or have major tangible assets.

Other Considerations

At best, valuation is an educated guess. There is simply no way to take into account all of the factors that are part of buying a dental practice. Here are a few more things to consider:

Unexpected Overhead

Equipment breaks. Staff members must be paid. Operational budgets may not be streamlined. Although a careful look at recent budgets can help you plan, always build in a cushion for unexpected expenses.

Inherited Staff

Until you actually purchase the practice, you have no real way to know how the staff operates day to day. From family troubles to workplace feuds, staff members are human beings with lives that are often messy. Be aware that workplace productivity will never be as high as it seems on paper, and try not to schedule more than 80 percent of any individual’s day. Over time, you may need to weed out bad apples to boost staff morale.

Patient Transitioning

Accepting change is hard for most people, especially when it comes to their healthcare. Some may leave the practice altogether. Prepare your budget for a dip in patient numbers, and make a plan for actively recruiting new patients.

Referrals

If you are a specialist, tapping into an existing referral network is vital. If you don’t have a local network, and one didn’t come with the purchase, you will need to invest some money and time into building those relationships.

It is nearly impossible to predict all of the costs associated with buying a dental practice. However, if you start with a professional valuation and then set aside cash to meet unexpected expenses, you will go a long way toward quickly achieving profitability.

Ascent Dental Solutions is a full-service agency dedicated to helping dentists build their practices and map out their careers. It is the brainchild of Dr. Kevin Coughlin, who earned his doctorate at Tufts University School of Dental Medicine and currently serves as a faculty member there. While Dr. Coughlin continues to practice dentistry as the principal owner of the 14-location Baystate Dental PC, he has a strong passion for helping fellow dentists maximize their success. If you are interested in learning how to take your dental practice to the next level, please contact Ascent Dental Solutions today at 413-224-2659 to learn how Dr. Coughlin can help.