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3 Signs You’re Ready To Buy a Dental Practice by Dr. Jason Cellars

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Categories: Practice Management, HR and Accounting;
3 Signs You’re Ready To Buy a Dental Practice 

This Townie, who didn’t wait the typical two years before trying to jump into ownership, explains what you need to rock before you’re ready to roll

by Dr. Jason Cellars

When are you ready to buy a dental practice and work as a sole practitioner? Dental banks usually require two years of experience, but dental insurance companies tell us how long our restorations should last and do we always take their word as gospel?

I entered dental school with the goal of purchasing my own practice immediately after graduating, so during my last two years of school, I called practice owners around the country to pick their brains on how I could best prepare myself for ownership. I also read dental and business books, listened to podcasts and used many of the resources on Dentaltown to get as much of a base as I could.

I then did as I planned and purchased a fee-for-service dental practice in Huntington Beach, California, right after I graduated from dental school. With my first year of ownership and practicing under my belt, and with all the advice that I heard along the way, I have compiled what I’d say are three prerequisites to practice ownership. That being said, you will never feel or be fully ready to make the leap. Sometimes you have to jump—fortune favors the brave!


1. You're up to speed on prep and know your occlusion.
The first qualification is courtesy of a multipractice owner in Texas who told me the first step toward ownership is becoming a clinical “badass” by mastering your craft.

To me, this doesn’t mean you need to be able to do complex full-arch cases; it means you’re meticulous, efficient and accurate with the dentistry you do. This also means you can recognize what’s out of your current scope and refer out cases that would get you in trouble.

I asked around to determine which clinical skills new graduates most likely need to develop, and the two I kept hearing were prep speed and occlusion, occlusion, occlusion.

Drilling on mounted, extracted teeth helped me improve my prep speed and hand skills. When you’re working on extracted teeth, you don’t need to worry about making mistakes, so you can prep at full speed and at full depth without risk. Set a time goal for yourself and prep within the allotted time, five preps a day, and you’ll notice that the quality of your preps will slowly improve until you’re able to prep to ideal at that speed.

Expanding my understanding of occlusion was the best advice I got clinically. Because I was on a student budget, I bought the Dawson textbook on occlusion, which opened my eyes to a world I didn’t know existed or mattered. I can’t stress enough how much this increased my clinical abilities and confidence.


2. You know how to mind your business.
Many practice owners I spoke with said new graduates won’t know enough about the business side of owning a practice to succeed right away. Learn as much as you can about small business ownership, especially marketing, management and accounting or bookkeeping. I earned a bachelor’s degree in business, read many business books during dental school and listened to many dental and business podcasts—and that all helped to an extent, but when it came down to it, I had to learn on the fly because there is no way to completely prepare for all the nuances you’ll run into.

Learn as much as you can—especially in regard to management, leadership and culture—but know that still won’t give you all the knowledge you’re going to need. Use resources such as Dentaltown to learn on the fly, and be prepared to work harder and more than expected, no matter how prepared you think you’ll be.

My biggest struggle was, and still is, management and leadership. I need to work on being able to speak up and guide my staff more, to set expectations with them and to hold them accountable. On the advice of Dr. Mark Costes, I started holding monthly meetings where I set three to five goals with each team member and review their performance toward the goals set the previous month. This has been a great strategy for team members who are eager to improve and impress.


3. You're ready to put in the hours finding the right practice.
Most brokers and lenders want at least two years of experience before they’ll consider financing your purchase, but one thing I learned while earning my undergrad business entrepreneurship degree is that there are always investors. Few dental offices fail, and although the large dental banks have strict rules to mitigate risk, you can find individuals and companies willing to invest money into a viable business.

When looking for a practice (or any business), cash is king. In the projections you make, salary, expenses and loan payment should all be covered while still having a positive cash flow. Do your worst-case-scenario projections and if cash still flows, you should be able to find someone to finance the sale for you.

To find a practice, I sent letters to every dentist 50 or older who practiced in the area I wanted to live. To find them, I drove around the area and searched online, writing down the names and practices that came up in each area. I sent out five to 10 letters each week, introducing myself and asking if the dentist was looking for a successor. I would then call the offices one week later to make a connection over the phone and ask if the doctor would like to meet or talk.

This helped me find amazing practices that weren’t yet on the open market, which is extremely valuable to a young practitioner because once brokers become involved, their goal is to sell the practice quickly, which means they’ll try to sell the nice practices to veteran dentists who won’t have issues getting a loan before they agree to take a chance on you. This is the time to persevere: There will be a practice out there for you, and there will be a bank, an investment company or an individual who will finance it. Keep looking, be creative in how you look and don’t get discouraged when you hear “no” over and over again. I called almost 150 dentists and reached out to almost 20 banks before I found a practice and heard a “yes.”

Conclusion
It’s important to keep the end in mind, which will help prevent you from becoming too discouraged. The right practice is out there! When push comes to shove, you will make yourself ready, and if it’s a financially viable practice, you will be able to find financing.
Author Bio
Author Dr. Jason Cellars earned bachelor’s degrees in biology and business management entrepreneurship from Loyola Marymount University, and graduated from the University of the Pacific Arthur A. Dugoni School of Dentistry in 2021. Cellars practices cosmetic and general dentistry at his eponymous private practice in Huntington Beach, California.


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