You’ve identified where you want another practice.
Now where do you actually find one to buy?
Doing so is a bit like having several of your grandma’s China plates spinning simultaneously: it requires orchestra-like coordination, due diligence, awareness, possibly a team, and perspicacity to keep them all spinning while you spin up a new one.
And if any of the plates break, saying you’re in trouble is an understatement.
First, get an adviser, adviser team, or connect with someone who has done this before, if you haven’t already.
To help you along in the process, we reached out to our community for some answers. What’s The DEO and what do we do? See here.
Here are 7 places to find locations to acquire.
1. Contact several dental brokers
You’re contacting them to get access to the knowledge or cross-sectional view they may have of the area(s) you’re trying to buy in.
Knowledge like—demographic data, upcoming trends—that may affect your ability to purchase (real estate availability, economic downturns, etc.)
Ask them these questions, at the very least before you jump into the “where are some practices I can buy” questions. They’ll help you filter out the duds:
- Are you familiar with practices in the area I want to purchase?
- Do you only do brokering for the dental industry? Full time?
- How do you typically find practices?
- Do you work on the buy-side, sell-side, or both? (if both, they can probably help you find practices to acquire and take some of the pressure off of you.)
Here are 2 vetted and DEO recommended dental brokers:
2. MORR Dental Solutions
MORR Dental Solutions
2. Dental Equipment/Supply Reps
The emerging pattern here is “Find those who already have access to the practice / location you want and contact them to save yourself some time.”
Since reps talk with practice owners on a daily basis, they might know of some who looking to sell.
So once you know what area you want to buy in, call up some reps and get their feedback on:
- Who’s looking to sell soon or in the near future
- Who’s looking to retire soon
- The area in general (demographics, economic outlook, etc.)
If any reps are nearby, grab a coffee or drink with them face-to-face. You’ll get much better information that way, as it builds trust faster. Better yet, be willing to travel to meet any promising reps/practice sellers.
3. Send Postcards or Mailers
Postcards allow you to find off-market practices without a broker.
On the Shared Practices podcast, Dr. Jordan Thomas (Season 2, Episode 21) describes how he used postcards to find off-market practices in North Carolina.
For targeting, he said he decided “strategically broad” because he and his wife were only in North Carolina at the time for school and had no friends or solid contacts there.
Then he somehow convinced his wife (over a Christmas break, mind you) to help him do a demographic analysis of all 100 counties. From Census Bureau stats, they looked at things like:
- Average population age
- Household income
- Owner occupied housing
- Dentist to population ratio
- Did the population grow in the past 3 years until present?
- Did that population have projected growth in the future? (Says this was huge for him because it showed a strong economic outlook)
He looked mainly for strong counties based on the above criteria but narrowed down even further by picking strong counties that were surrounded by strong counties.
That’s very important for acquiring multiple practices.
Choosing strong locations surrounded by weaker counties can limit or even hurt multi-location expansion.
He then purchased a list from the NC State Board of Dental Examiners.
It lists all the licensed dentists in the state, and tells you what county they work in and more (specialty, when graduated, etc.).
That list allows you exclude dentists who graduated within the past X years of years.
Those dentists probably don’t want to sell their practice.
But Docs who graduated a long time ago, say, near retirement? Now you’re really targeting well.
Jordan and his wife hand-wrote about 1,800 addresses on envelopes (a strategy we recommend as well, because it’s personalized and gets higher open rates).
But to save time, hire someone with great handwriting and free time (A grandparent, a teenager, a babysitter, etc.)
Within 2 weeks, he had about 80 responses. 4 weeks after the mailing, he emailed those owners a PDF version of the postcard. 60 of the 80 responses were interested in selling.
Sidenote: he recommends the book, “Choosing the Right Practice Location” by Jayme Amos. It was his compass during this postcard campaign.
When “cold contacting” someone, catching their attention is your first priority. Which means you need a way to immediately differentiate yourself.
With voicemail and email inboxes overflowing, a well-executed direct mail campaign stands out like you wouldn’t believe.
Tip: Look for dentists in your area / state nearing retirement
Pro Tip: If you find a really good potential practice to acquire based on your preliminary analysis (and a hunch), a Shock and Awe package will wow the potential seller and make a great first impression
A Shock and Awe package unboxing to you give some ideas
Google “Shock and awe packages” for more ideas and examples.
4. Henry Schein’s Dental Practices for Sale Locator Tool
Before using this resource, as well as the following 3, knowing your ideal patient profile / demographics is highly recommended. Take your time when looking at these practices, don’t jump in emotionally too early just to get a deal sealed and always do your due diligence.
It’s newly launched, but keep it at the top of your bookmarks.
Started by Maria Malone and Vin Cardillo, it offers extensive deep-dive data at a level that most dental brokers don’t have access to or know how to assemble for sophisticated or advanced buyers.
At the time of this writing, it’s only available in select cities, but will be launching to more soon.
It’s a no-fee sell-side representation agreement. It’s as if Match.com and Trulia.com were merged but for dental practices.
6. Search Dental Transition Listings
This resource and the one below are where most usually start, or with a broker. If you have all your desired criteria, these make it easy to sift through and find what you want.
Like everything else, finding practices is a numbers game, but stack the cards in your favor.
7. Search Dental Practice for Sale listings
Pro tip: Search dental association and society websites also. Sometimes, you’ll find practices there that are unlisted anywhere else and might be talk to talk with them before a broker gets involved.
8. Contact and ask Strategic Investors
A strategic investor is a larger company in the same industry who acquires other companies.
It is smart to ask them because they have a bird’s eye view and a cross-sectional view of the dental industry.
Because they buy more practices and locations more often than you might, they can give you solid advice on what to look for in a location.
Extra: How to minimize risk when acquiring dental practices?
Every choice carries risks along with the rewards.
Here are some pitfalls to avoid that minimize the downsides, according to Maria Malone of MORR Dental Solutions who has over 10 years of experience with well over 100 practice acquisition transactions:
- Not doing your homework (and making time to do so) is the biggest risk
- Not being disciplined about it and letting ego, emotion, or pride do the acquisition instead of strategy and logic
- Not knowing what to look for, or at (“The eyes can’t see what the eyes don’t know”)
- Changing things too quickly once the practice is acquired
If you don’t have a clear vision for your group and what your group needs, it’s very easy to get sidetracked and enamored with acquisition model.
—Maria Malone, co-founder, MORR Dental Solutions
Extra: What Various Private Equity Firms Look For When Investing in Dental Practices
Dr. Jeromy Dixson of the DSO Project, presented this at our 2018 Fall Summit. Having founded, owned, and sold an 4-8 location DSO, he has a lot of experience in all phases of DSO construction, operation, and liquidation.
Consider using these same criteria when looking for a practice to buy.
Now that you have the resources to more easily find a location, here are some next steps to take if you haven’t done so:
- Analyze dental demographics to find location pockets with the lowest supply (i.e. dentists) and the highest demand (i.e. your ideal target patient demographic profile)
- Figure out the best method of contacting the location owner
- Have your practice acquisition checklist, questions, or assessment handy and review it often with your adviser(s)
If you want the new location to thrive alongside your others, acquiring a dental practice should not be done alone.
So instead of struggling “on an island,” worrying if that next hire or strategic move is going to work out, or doubting if you can build a group…
Join a community of like-minded dental entrepreneurs who’ve already hiked the uphill battle you’ve started and can help you avoid pitfalls and setbacks on your way to the top.
Or join to bond with fellow go-getters and climbers who are still figuring out the same problems like:
- As the new practice owner, how do I reduce turnover?
- How do I maintain production when I’m not in the chair?
- How do I hire, compensate, and retain great associates?
- How do I create better systems so I can stop putting out fires nearly everyday?
You’re always one decision (or one connection) away from a totally different life. We’re happy to be that connection.
Schedule your free “Growth Accelerator” call today.