December 8th, 2020
Questions to Consider When Acquiring a Retiring Doctor’s Practice
Industry Research — Other
Countless practice owners nearing retirement have decided that now is the perfect time to sell their practice. Though every situation is different, COVID-19 likely plays a large part in this decision.
Many are trading PPE and CDC guidelines for white sandy beaches — literally and figuratively. It is no doubt sad to see them go, but there are plenty of new and veteran doctors that are willing to step right in their place.
There are many pros and cons to acquiring an existing practice. So we have compiled a list of questions for you to consider when acquiring an existing practice.
#1: Can your current staff handle the influx of new patients?
Whether out of curiosity or familiarity with the current owner, recently acquired practices often bring in new patients. This influx can be dealt with by assessing your current staff. Do you need to hire more people to keep up with the increased workload?
If the answer to that question is “no,” proceed with business as usual. There’s no need to hire people unnecessarily. The added expense can be used in other areas.
However, if there is a noticeable lag with efficiency around the office, hiring more employees may be your next best move. Consider reaching out to recruiting sites (Indeed, Linkedin, etc.) and onDiem. onDiem is an on-demand dental staffing company and is a great resource if you anticipate a temporary increase in volume.
There are certain traits to look for in a new hire – and existing staff as well. In 3 Ways Dental Practices Can Optimize their Budget and Downtime During a Shutdown, we talked about the importance of having team players on your side: “Having the right employees working for you will not only optimize your expenses but enhance your overall production and increase office morale.” If members of your staff are excited in their role, look forward to work every day and truly make your practice operate efficiently, the added expense to payroll will be well worth it in the long-run.
#2: What is the condition of the equipment in your office?
Do you have old technology that already requires updating? This is a slippery slope, to begin with. When the equipment reaches four years old, we recommend that you upgrade. Technology does not function properly after a certain age. Time and money are then invested in fixing something that should have been replaced much sooner, at much less cost to you.
Our Sales Representative, Christian, likes to go onsite and conduct a quick walk-through when a doctor purchases a new practice. This way, he can take pictures and make notes. The doctor may be able to reuse certain equipment, while other machines are deemed unsalvageable. This initial meeting allows Christian to understand what the doctor’s vision is for their “new” practice.
In the same way that we asked you to assess your current staff, consider doing the same with your existing equipment. Are you noticing a loss in efficiency and productivity that could otherwise be improved by the addition of more equipment? Would adding an extra workstation be able to better serve your new patient load?
Then again, the addition of more equipment typically involves having more employees on staff to use it. This requires a delicate balance between having enough staff and equipment on hand to meet patient demand.
#3: Do you need to upgrade to a larger storage size for data backups?
Your practice data is far too valuable to gamble with. At Medix Dental IT, we are constantly stressing the importance of conducting regular data backups.
Routine data backups are completed nightly for our partners if a natural disaster or cyberattack causes an unplanned crash. We use firewall protection and data encryption to ensure that no cyber-criminal will access classified files and hold them for ransom.
As the amount of data you have grows over time, you will have to increase your storage size to accommodate it. Acquiring an existing practice often leads to an influx in new patients and their sometimes extensive patient history. Does your IT provider provide these services? You may want to have a conversation with them about your data backups and if you need to request a larger storage size or if they do this automatically for you.
#4: Does your IT package include vendor mitigation?
There are many perks included within our Onyx Partnership: unlimited remote support, secure data backup, proprietary technology planning, vendor mitigation and more. We communicate with vendors so that our partners don’t have to. Vendor mitigation is a feature you should consider when choosing the right IT package or dental IT provider.
For example, you may be reconfiguring your office space to add another workstation. Our Sales Rep, Christian, often suggests that you utilize the services of the electrician that your general contractor recommends. Medix can certainly run network cable, but we are usually more expensive to account for travel time. It’s more efficient and cost-effective for the electrician to run the network cable, as they will likely be adding outlets already.
We can also change the layout of the existing practice to accommodate personal preferences. This simply requires communication between the doctor and the electrician, to make sure that the computers are in the right place and that the cable can be run to the new location.
Medix has voltage and network standards documentation that we send to electricians to guide them throughout the project. We are also happy to give the electrician a quick call to answer any questions they may have.
Rather than deal with the constant back and forth of speaking to vendors, comparing quotes, and waiting for them to get back to you, that responsibility can fall on your IT provider directly. This gives you the ability to focus on other things, such as your patients and their care.
There are a lot of details to iron out when acquiring a practice. Lean on your extended team partners such as your financial advisor, construction liaisons and dental IT provider to make it as seamless as possible. As always, Medix is here as a resource for you during this time. Please do not hesitate to reach out with any questions or concerns you may have.
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