At first glance, many would assume that young and older dentists would have a shared perspective when it comes to what it takes to run a practice - after all, they have chosen the same profession and job description. However, in reality, there is often a generational divide that exists in their perspectives. The practice of dentistry has changed enormously in the past 25-35 years. From the technology and compliance needed, to the equipment and materials, and from the clinical range offered to the marketing allowed to bring in patients, there is actually very little about the modern practice of dentistry that has remained untouched and would have been the same when senior dentists (55+) started practice.
It is only natural that some of these senior dental practice owners are perhaps more conservative when it comes to adopting change and, as such, many of the practices for sale by senior dentists have a more traditional approach to practice operations.
While some short-sighted buyers will look at a traditionally-run practice and be turned off by the amount of change and reinvestment that would be required in order to update it, savvier buyers will recognise the massive opportunity that exists in these practices. For example:
- Marketing
Many older dentists (those that are 55+ years old) started dentistry and built solid practices in a very different competitive landscape in the Australian dental industry.
- There were less dentists per head of population and
- Advertising was almost illegal. You could have a small, red light-box and a brass plaque outside your practice with lettering of a limited font size, but that was about it.
- Still spend money on traditional advertising avenues like Yellow Pages and letterbox drops.
They built solid businesses and loyal patient bases on the back of hard work and good service. Many of these business owners have been able to maintain their practices in the face of strong competition, even though many still have a more traditional and conservative approach to their practice’s marketing. While they may have a website (not all do), many:
- Haven’t embraced Google AdWords, online reviews or a social media presence
- Have poor signage (even though they have opportunity)
The Opportunity:
A practice that is achieving a revenue of $1M without advertising has more potential than a practice with the same revenue that is advertising.
If a practice is popular without modern advertising, imagine what would be possible if this was updated. Imagine what could be built on the foundation that is there.
2. Clinical range
30+ years ago it was rare to find a general dental practice offering orthodontics and implants. Many built and maintained successful practices on purely general clinical work and referred out all ortho and implants.
A large and growing % of general dentists under 40 have undertaken further training and feel competent to be able to offer extended treatment options, like ortho (including Invisalign) or implants.
The Opportunity:
A practice that is achieving a revenue of $1M without offering extended treatment options, like ortho and implants, has more potential than a practice with the same revenue that is offering these treatment options.
If you are a young dentist who can provide extended clinical options, and you are looking to purchase a practice, you would do well to recognise this and recognise that there is sometimes a large amount of dental work that is either being referred out, or not being offered, that you could introduce in house.
In order to get a sense of this, ask the practice for an Item performance report from the dental software (his report breaks the revenue down into item codes).
3. Equipment.
Younger dentists are so used to having access to OPGs, digital X-rays, etc., that they cannot imagine practicing without them. The truth is, that this equipment has only been around for a relatively short period of time. It used to only be financially viable in larger clinics, and many senior dentists are still running their practices without them.
The Opportunity:
While many younger dentists looking at buying a clinic that doesn’t have an OPG or modern equipment may moan about the extra investment needed, the savvier buyer will dig deeper and realise that, while this is true, adding an OPG introduces efficiencies and a far greater diagnostic capability to a practice and could easily pay for itself in a short period of time. A practice with a large patient base, without easy access to an OPG, could be sitting on a significant amount of undiagnosed treatment.
Conclusion
Often, looking at more traditionally run practices can be similar to finding a diamond in the rough. On their immediate appearance, they look like they need some work. However, if you invest the time to do some polishing, there is massive value that in them that just hasn’t been fully realised yet.
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