Recent Dental Graduate has a Choice of Opportunities


I graduated back in May of 2011 and having been working as an associate for another dentist for the past 7 months. It has been a good associateship in the fact that he has allowed me to learn a ton about different procedures. The bad news is that there aren’t enough patients to support both him and me. My salary has kind of been a joke since I started and hasn’t gotten any better. We had a conversation and he supports me going out to find another job. Plus my 200+k loans are just about due.

My two options are a dental mill that I recently interviewed for and is highly likely that I will get the job for. $500 a day minimum with a chance for production bonuses. Basically the stable, work like crazy, but get paid well associateship in a mill.

or….

This dental practice that recently came up for sale in the general area my family and I would like to live in. I saw the practice, like the location, and the dentist who is selling. I think it would be a great fit but am afraid to make the jump. So some specifics:
The information you post does look promising, however, you really have to dig deeper to make sure there’s truth in the verbal comments and surface info:

He works 3 1/2 days per week generating 530,896 in revenues.
Told me that about 40-50% of the revenue is brought in by hygiene.
Verify these comments: 40-50% is actually a pretty wide range, it means hygienist is between $210k and $265k and even at $225k that usually means $650kish in dentistry and $850k+ of total revenue. 1,200 patients do seem appropriate for approximately $225k of hygiene so that stat appears reasonable.

He’s an older dentist has very conservative practice philosophy (told me that the has to “talk patients out of the things” instead of talking them into them
Again, you must dig into the statement. Get the production by provider by procedure reports to start.

Doesn’t do any surgery or ortho (I like to do surgery and have gotten into Invisalign recently)
Over 1200 active patients (in a two year period) on 3 1/2 days per week with no external marketing.


Old equipment (as in about 30 years old but still functions well. He has it maintained once a month. I plan on slowly changing it out if I take over. Conventional x-rays.
In this situation you’ll probably want to factor into your analysis the investment needed not only in the equipment but also furniture and decor.

He has 3 DH’s (equaling 7-8 hygiene days a week)
Well that stat suggests hygienist production in excess of $250k so again, his statement of 40-50% hygienist production could be accurate.

2 DA’s and 1 Front Office manager
Staff plans on staying on when he leaves.
Staff salaries seem a bit high at 30% of gross revenues

Staff wages as a percentage of revenue will be high IF the dentistry production is low, which his statements indicate, so that’s not surprising. If this practice were grossing $850k+ your wage stats would drop in line quite nicely I bet.

He’s asking 375k for the practice.
If you can verify that this practice is under-producing that could be a steal.

and 200k for the building. (building is optional and could be purchased in the future)
Total profit with addbacks, officers compensation and such is 196k, 169k, and 179k over the last 3 years.
Those appear to be good numbers and would easily support that purchase price even IF the revenue remained at $550kish. Still, you really need to dig to make sure the numbers are accurate.

Let me know what you think about these opportunities. I’m learning towards purchasing the practice but my wife isn’t sure yet.  Feedback from everyone would be helpful. Let me know if you have any more questions about it. Thanks in advance.
Good luck.

For more information or to sign up for our newsletter, please contact arose@dentalcpas.com
Follow us on TwitterFacebook and Pinterest