When I talk to both buyers and sellers, I am often asked what is the Key to ensuring a successful practice sale or purchase. After supervising over 150 dental practice sales over the last 21 years, there can be only one answer. Ensure a good “FIT” between the selling and the buying dentist.  This compatibility is the most important ingredient in a successful dental transition. Fit is even more important than the financial numbers in a practice at least when it comes to transition success.

What Is “FIT”

I will define fit by providing an example of what a good fit is not. If the seller has been patching amalgams and avoiding crown and bridge like it was a communicable disease for the last 20 years and if the buyer believes it is a sin to not crown every tooth that has a proximal restoration, this is a bad fit. The buyer must be willing and able to take a cue from the patient’s record and conversations with the seller as to how to approach the patients the first few times they see them.  They need to build rapport gradually.  Otherwise, the buyer needs to be prepared for a deluge of requests for patient records to be sent to other offices. When this happens, the buyer is not happy because they bought the practice assuming that they would keep the vast majority of the patients. The seller is not happy because they will probably end up fielding phone calls from disgruntled staff and patients alike.   In this situation, the bad fit means that neither seller nor the buyer will be happy post-sale. Some additional examples of fit criteria that should be discussed and evaluated are:

• Treatment planning
• Staff management
• Running on time
• Demeanor with patients
• Need for organization
• Technology plans and capabilities

The easiest way to determine if you have fit is to explain it this way, that after a few conversations between the seller and buyer, you will know FIT when you see it. There is just a sense of comfort that usually increases the more the two parties talk to each other. What I usually hear is something like “I can see myself turning over my practice to this person,” or “I like her, I think she will help make sure I am successful once I take over.”

Why Fit Is Important

A good fit equals a good transition while a bad fit makes it very difficult to end up with a successful one. Over time, I have seen this fact proven again and again.  I believe it comes down to the fact that a dental practice sale is a sale of goodwill, not equipment or furniture or dental supplies. Instead it is mostly a sale of Goodwill.  Goodwill is not something you can hold in your hand, but instead is something much less tangible. Goodwill is how your new team perceives you and how the patients that are new to you feel about you becoming their dentist. The more aligned the selling dentist and the buying dentists are with their values and methods, the easier it is to transfer this goodwill.

How Do You Judge Fit

“FIT” is a multi-faceted concept but how do you judge “fit”? Keep in mind that while fit is difficult to define it is evident when both buyer and seller align. There are several categories that a seller and buyer can discuss to determine fit:

Treatment planning

This is the biggest area of fit that should be explored. It is also tough to determine. Looking at radiographs and each dentist doing a treatment plan will not work. When looking at treatment planning what is planned is less important than how it is presented to the patient. In my experience, it is usually a forgone conclusion that the buyer will be a more aggressive treatment planner than the seller. It is not the problem that there is different treatment planning, the real issue is how is that difference handled by the buyer and in the treatment presentation. The key is the acknowledgment on the part of the buyer that if they are presenting a large treatment plan to a patient that is used to a quick recall check and hearing that everything is ok, they will need to be careful. The buyer/dentist must have excellent verbal skills as well as the ability to moderate their treatment consultation so that the patients are not overwhelmed and scared off from the practice.

Staff Management

What is important here is how the seller worked with their staff and how the buyer plans on working with the staff. For example, if as is usually the case, the seller is more of a “delegator” than the buyer will be, then this needs to be addressed and accounted for. New buyers tend to want to be more hands-on than most selling dentists. This means there needs to be a plan of how this will be addressed and handled with the staff. Some planning and flexibility will ensure goodwill between the buyer and the seller’s staff members.

Running on Time

One way to infuriate both patients and staff alike if you are the new practice owner is to start running 20 minutes late if the selling dentist was always on time. Patients will have a negative perception not only because it is a change, but also because they view it as disrespectful of their time. If the buyer is accustomed to running behind, they should strongly consider trying to change the way they manage their time. Staff will love you for not making them explain to patients why they have to wait. As a corollary, if the seller was the type to run late and the new owner runs on time, the patients and staff will greatly appreciate it.

Demeanor with Patients

We all have our way of interacting with patients. Some of us spend ten minutes talking to our patients before we even pick up a mirror. Others have a “let’s get down to business” attitude. Both ways are fine and work well but when there is a big discrepancy between seller and buyer it can cause problems. Some discussion of how the seller engages patients is a good idea and can help the buyer to develop a plan of how they will handle their initial meetings with patients.

Need for an organization

Some of us have the philosophy of “a place for everything and everything in its place.” Others are less fastidious with their office space. Again, there is no right way, but staff will have a difficult time if the seller and buyer approach the organization in a much different way.
Just last month I got a call from a staff person at a practice I had helped transition, who was distraught because the new buyer was so intent on “cleaning up” the laboratory and storage cabinets that this staff person was not sure she could remain at the office. She felt so much stress that she told me she was not sleeping and her husband had been encouraging her to quit. It was a very unfortunate situation because this staff member had been at the practice for over 15 years and was very important for a successful transition. When I talked to the buyer, he responded that if things were not in order, then he would be losing sleep. We worked it out, but if there had been some conversation before the sale took place, we could have anticipated this and saved everyone a lot of anxiety.

Technology plans and capabilities

Many older dentists, myself included, are used to having to write charts by hand. It took me several years before I quit holding pictures of digital pans up to the ceiling lights to read them. Today’s buyers cannot understand a time before digital radiography, and paperless charts. Everyone involved in a dental transition needs to understand when these stark differences exist and plan for them.

While I can certainly understand a new buyer wanting to install new dental software as soon as they buy a practice, they need to understand that this will make an already stressful situation worse for their new staff. Keep in mind that the staff is getting a new dentist/boss, which is a big transition for most. If they then have to change the way they do things, anticipate some staff defections. Unfortunately, changes in technology are the number one reason for staff loss during a dental transition in my experience.

Upgrades in technology should be planned out in conjunction with the staff to ensure that those upgrades will not only be successful but also enable the buyer to keep his/her staff intact. After all, much of the goodwill purchased comes from the endorsement of the staff. Keeping them in the office and on the side of the new owner will greatly benefit the transition.

The greater the “FIT” between seller and buyer, the more likely that the practice transition will be successful for doctors, staff, and patients. Navigating the areas outlined above and planning for changes in advance of purchase will ease the adjustment once the new owner/dentist is in place. The goal for both seller and buyer should be a smooth transition.