Buying or selling a practice is one of the most significant financial events in a dentist’s career – with only one chance to get it right.
Covid-19 Update: Here’s What I Would Be Doing Right Now If … Part Four
I have now been at home so long as a result of the Missouri quarantine directives that we are now able to actively plan our return to the world headquarters of ADS-MidAmerica. By the time you read this, we will be back in the office. We have continued to network, read, watch and listen to the industry about the business of post-pandemic dentistry and what the effects will be on values and marketability of dental practices. Will financing be available? Will it be a Buyer’s market or a Seller’s market? Is now the time or would it be better to wait for some “sign” that all will be well? The last part of this series; What would I be doing if I were a recent graduate or young associate may be the hardest to swallow but let’s put it out there.
The current pandemic may have placed you in the most challenging of all the categories we have discussed. The shutdown, followed by months if not years of recovery, leaves you in a difficult position to get a foothold on your career. Jobs have been lost and potential ownership opportunities with your current employers may have vaporized. The ability to purchase a practice may also be in jeopardy as practice acquisition lenders are having a little trouble finding solid ground to stand on. There is likely to be strong competition, even for practices on the market with less than stellar financials. Current student loans will not go away and future loan balances are probably going to increase. Profitable production, especially in highly competitive metro/urban markets, will be difficult with all of the necessary sanitation methods that must be part of the new protocols. In short, you couldn’t have picked a worse time to enter the profession.
Or a better one. Those that think creatively and look for non-traditional opportunities stand to be well rewarded. The need for dentistry will continue as long as people have teeth. The issue is not demand but rather, distribution and this is not the first time this has happened. A similar situation occurred in the ‘70s and ’80 as dental schools used a then-version of government Stimulus Money to build large capacity dental schools and to subsidize student fees. Imagine a semester tuition of $285.00 and a class size of 160+. Students, at first virtually all male, routinely graduated with less than $5,000.00 in student loan debt. Sounds too good to be true, right? The problem was that by the time Uncle Sam realized that their projections of the number of dentists needed to serve the extra population resulting from the Baby Boomers reaching maturity were off a little, an overabundance of new docs had flooded the workplace. Just how bad was it? New graduates held on to their old jobs as waiters and lab techs hoping to get a call to go work as a hygienist for a day. Clearly there was a distribution problem waiting to be solved.
Part of the resolution to that problem came when doctors began to realize that they all could not stay in Midtown and that there were opportunities outside of the Big-City limits. Travel around the smaller markets in the Midwest (or probably about anywhere in the country for that matter) and check out the diplomas on the wall. I believe you will find a large percentage of them were awarded in the ‘70s and early ‘80s. Opportunities were there and smart guys took them. Yes, they were mostly guys and we can devote a whole series on the shifting demographics of dental school grads and the portability of their spouses at another time. Suffice it to say that those docs are reaching the end of a 35-40 year career and are now ready for a successor. They have had great careers, raised their families and have been a huge asset to their communities, both personally and professionally. Here’s what I would be doing if I were a recent graduate with limited job prospects. I would be trying to meet some of these folks. Granted this is not for everyone and certainly job opportunities for your spouse may be limited but these can be great economic and professional opportunities that deserve a look. Maybe it’s time to look beyond suburban living. Maybe it’s time to get off of the corporate office treadmill. Maybe it’s time to breathe a little fresh air and practice with lower overhead, less competition and become a part of the local culture. That’s what I would do.
Steve Wolff, DDS
UMKC Class of 1977
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