8 Other Ways To Use Toothpaste

Ahhh, it’s July. It’s prime tourist season, where are you and your family going this summer? Or are you having a laid back summer and just staying home with the kids? Doing art projects with your kids is fun but can leave your house a bit of a mess. Prices add up, and the total is a bit intimidating. If you are looking to save a few bucks, look for an all in one product. Such as toothpaste, obviously it’s used to brush your teeth but did you know that it can be used for so much more?

8 Other Ways to Use Toothpaste

  • Remove pimple/ zit
  • Treat poison ivy
  • Clean smell from hands
  • Remove gum from hair
  • Remove carpet stains/ crayon marks
  • Clean sneakers/ leather shoes
  • Clean foggy headlights
  • Shine jewelry

If you’re thinking “WHAT? That can’t be true!’ Well believe it, it’s a life hack! Toothpaste contains baking soda. Hydrogen peroxide, and alcohol which can help dry your pimple out. The menthol can also temporarily reduce swelling and pain. Toothpaste also helps with poison ivy, because it helps with soothing away the itch. It’s important to remember, don’t use toothpaste on broken skin as it can cause further damage.

Just spent the day filleting your freshly caught fish? Good fish, bad smell! Wash your hands with a bit of toothpaste, it makes your mouth smell fresh and it works on your hands too. Nobody wants their hands smelling like fish all day!

Have a long day? Fell asleep with gum in your mouth? You don’t need to cut your hair off, just use toothpaste! Toothpaste is designed to break down the sugars, making it easier to remove gum from your hair. Just one of those summer days when your kid decides it’s a good idea to draw on the walls with crayons. Put some toothpaste on the wall and start scrubbing with a brush, rinse with water, and wow you have a brand new wall! This also works for carpet stains.CTA

Bring your favorite sneakers with you to your summer camping trip and can’t get the dirt off? Grab your old toothbrush and start brushing them. Clean it off with a damp cloth and you’re all set to go. If your car headlights are foggy with dirt, put toothpaste on a sponge and scrub. It’ll make them look brand new!

After time, your ring or jewelry might lose its natural shine. Pick up an old toothbrush, apply toothpaste and brush your jewelry. Use a damp cloth to pick up any of the residue.

No matter what your summer plans are, these are good household #hacks to have. It’s also important to note that if your skin gets worse stop using immediately. Don’t forget – DON’T apply toothpaste to broken skin.

Last thing- remember to use your toothpaste on your teeth!! Brush twice a day and floss once. With summer here, enjoy snacks and drinks in moderation. Stay hydrated!

ADS South, LLC 
120 Istoria Drive
St. Augustine, FL 32095

Phone: (770) 664-1982

ADS South:

Since 1984, ADS South has served practice transition, apprasial, associateship services, pre-retirement transition support and expert testimony needs. ADS is known by its impeccable reputation as being fair, honest and effective in helping dentists plan and implement their transition strategies.

Show Love to Your Oral Health

Whether you choose to deny it or not, it’s the month of love. February is American Heart Month. Did you know there’s a connection between your heart and oral health? If you plan on stuffing yourself with a ton of sweets, you should be careful! Your teeth need love as well, don’t forget about them.

Yes, it’s true, gum disease increases your risk for heart disease. Lack of care for your teeth and gums can lead to gum disease. If it’s not treated, plaque and bacteria can make its way to your bloodstream and travel through your body to your heart which can lead to blood clots or possibly heart attacks.

Tips For Healthy Living

Valentine’s day – Date night, some people might say they go hand-in-hand. But If you don’t think so, use this tip for whenever you go out and eat.

  • Keep some floss in your bag or pocket. The quicker you get rid of the food particles and bacteria the better! Also, water is the best drink for your teeth, it rinses away acids from your teeth. Pro Tip: order water with your meals.
  • Dark chocolate is actually good for your teeth! Well, in moderation of course. It contains less sugar than milk chocolate and can help with preventing cavities and tooth decay. Chocolates that have a chewy sugary center will more likely cling to your teeth. Yes, you might like those better, just try to eat a couple rather than the whole box.Candy
  • Gummy candy, you want to try to avoid those! They are the worst candy for your teeth. The bacteria in your mouth set off a chemical reaction that turns the sugar into an acidic form then it eats away at the enamel of your teeth. This is known as demineralization. Also, gummy candy sticks to your teeth. When you think about saliva you might be grossed out but when it comes to your mouth, it’s a good thing. It neutralizes acids that come from sugars and protects your teeth.

Alternatives to gummy candy: Xylitol is a sugar replacement that bacteria won’t recognize and doesn’t attack and turn it into acid like they do with sugars. Save your teeth from an attack and read the ingredients!

It’s always a good time for sweets! – WRONG. For some of us, we can’t say no to candy. Eat them after a meal to limit the exposure of sugar and bacteria! Be sure to wash them down with water.

Love is in the air! Did you know that kissing helps prevents cavities? It stimulates saliva and breaks down plaque to get rid of bacteria.

Love Your Teeth

  • Brush twice daily
  • Floss daily
  • Schedule bi-annual teeth cleanings

Those are the basics! Here are a few changes that might benefit you:Brush.png

  • New toothbrush – your toothbrush should be replaced every 3 months! Use soft bristles, don’t be rough with your gums and teeth.
  • New floss? There a bunch of floss out there, don’t be afraid to try something new! Or if you are new to flossing try something and fall in love with how it makes your mouth feel!
  • Toothpaste – Are you loyal to a certain brand? If you can never settle on a certain brand, look for one with an ADA seal! They help remove the plaque from your teeth and protect them from decay and gum disease.
  • Time – sleep in too long or too tired at night to brush your teeth? It’s recommended to brush your teeth for two minutes. Make this change, your mouth and dentist will love you for it! Use a timer while brushing or play your favorite song! It’ll make the time fly by.

Are you wondering if this check-list applies to you if you have dental implants? The answer is: YES, they feel and function like your natural teeth. Which means there shouldn’t be a change in your dental routine.

Treat your heart how it deserves to be treated! Limit your sugar intake, walk or take the stairs rather than the elevator, and take care of your teeth and gums.

ADS South, LLC 
120 Istoria Drive
St. Augustine, FL 32095

Phone: (770) 664-1982

ADS South:

Since 1984, ADS South has served practice transition, apprasial, associateship services, pre-retirement transition support and expert testimony needs. ADS is known by its impeccable reputation as being fair, honest and effective in helping dentists plan and implement their transition strategies.

 

Be A breath Of Fresh Air This Holiday Season

It’s the season to get together! Do you always avoid one family member because their breath stinks? Or do people avoid you? Either way, nobody wants to be “that” person at gatherings. As time goes on, people don’t forget who the culprit is. Don’t let it be you!

Typically, we all wake up with bad breath because there is no constant saliva flow as we sleep. Saliva helps wash away bacteria growth. A reminder to why we brush and floss before we go to bed and when we wake up.

Did you know that over 40 million people in the U.S have bad breath? Most of the time you aren’t able to smell your own breath! Because of the embarrassment, often times we don’t mention it when we smell others breath.

What is Bad Breath?

It’s your oral bacteria which are living, eating, and breeding organisms. You know how all living things need food and needs to dispose of it? That’s what is happening in your mouth! Use this as motivation to start a better dental routine!

What Causes Bad Breath?

  • Smoking and Chewing Tobacco
  • Poor Dental Hygiene
  • Dry Mouth
  • Diet

BrushThe worst cause is smoking because it reduces saliva flow. Dry mouth occurs when your mouth doesn’t produce enough saliva. It is your mouth’s natural defense and without out it plaque and bacteria build up faster. Certain drinks like alcohol and coffee dry your mouth out as well. Sugary foods and drinks are bacteria’s favorite, it helps them grow/multiple faster. It’s important to brush and floss to help prevent plaque build-up.

You might want to keep a closer eye on your tongue as well. Your tongue doesn’t have a smooth surface; food debris, bacteria, and dead cells can be trapped there. Overtime, a coating forms across and as it gets thicker, your odor becomes stronger.

This year, don’t be the one with the breath that clears a room! Have a solid oral hygiene routine, a good one that includes dental cleanings every six months! If you are stuck on what to bring for your gathering try peppermint bark. It’s a nice breath refresher for anyone that needs it!

Pro Tip: Use dark chocolate chips – it’s good for your teeth (in moderation)!

If you are questioning, “How in the world is dark chocolate good for my teeth?” The answer is dark chocolate contains polyphenols which helps fight the growth of bacteria in your mouth, reducing risk of tooth decay. It can also offset bad breath!

Have a great holiday season!

ADS South, LLC 
120 Istoria Drive
St. Augustine, FL 32095

Phone: (770) 664-1982

ADS South:

Since 1984, ADS South has served practice transition, apprasial, associateship services, pre-retirement transition support and expert testimony needs. ADS is known by its impeccable reputation as being fair, honest and effective in helping dentists plan and implement their transition strategies.

Transitioning To Retirement

As we baby boomers work our way toward retirement, we need to consider how best to accomplish this final stage of our careers. Most of us have made some mistakes along the way, but we were able to repair most, if any, damage. However, in this last career step, we need to nail it the first time. There is no reset button. We won’t be able to repair the damage.

In preparing for retirement, it is critical to work past the transition myths that have been floating around the profession for years, and to learn some of the principles that transition experts have discovered. Consider the myth: “If you’re thinking about retiring, october-2016-6bring in an associate so you’ll have a built-in buyer when you want to retire.” I have seen too many disappointed owners who tried this tactic, only to find out that it seldom works.

When thinking about retirement, we need to understand how dentists are wired. Consider these fundamentals. Associates work for other dentists; they don’t buy practices. Buyers buy practices; they do not work for other dentists. If a dentist is wired up to be an associate, he or she is not likely to become a buyer in the near future. When a dentist hires an associate, the owner should not expect that associate to become a buyer when the owner snaps his or her fingers and decides to retire. If the associate does buy the practice, that’s fine, but I would not structure a retirement plan that depends on that happening. When you want to sell a practice, search for a buyer, not an associate.

When should you consider adding an associate to your practice? The single criteria for adding an associate is that there is more work than the owner is able or willing to perform – not because you’re thinking about selling your practice. If the dentist’s (not hygienist’s) schedule is booked for three weeks or more, there is likely adequate work to add an associate. If the owner refers out treatment regimes that a qualified associate could perform, that indicates potential production an associate could treat. If an owner wants to reduce his or her schedule, that would contribute further opportunity for associate production. If you cannot demonstrate enough production for an associate to be busy, you should not add one. Few things are more disruptive to a practice – to the owner, patients, and staff – than adding an associate who does not have enough work to support him/herself, only to have that associate leave.

The owner should have a reasonable pro forma of the financial outcome of adding an associate. Both the owner and the associate need to have a realistic outlook as to what to expect financially before entering into any arrangement. We do not start instrumenting a root canal without first measuring the root. Similarly, the same principle should apply to measuring the financial outcome of adding an associate.

I always strongly recommend that a contract be in place before the associate starts to practice. Too many times, it isn’t. After an associate starts working in a practice is not a good time to begin negotiating the terms of such an agreement for either party.

In states where a covenant not to compete is enforceable, I strongly recommend including that element. Without a covenant, the production an associate performs belongs to the associate, not the practice owner. I will typically give an initial period of 90 days from the start of the agreement until the covenant begins, since an associate is extremely unlikely to be able to harm a practice during such a short term. If the arrangement doesn’t live up to expectations, then the associate is not punished in the process.

Covenants can also be drawn on a graduated basis over a period of several years, starting with a shorter distance and time, and then advancing over a three-year period as the associate becomes more involved with the patients and practice.

Another term that should be carefully crafted in the agreement is the right of first refusal to purchase the practice. If the associate is given a traditional right of first refusal, he or she is able to match any offer from any other prospect who ever makes an offer. The problem with this kind of right of first refusal is that few buyer prospects will want to spend the time, money, and effort on due diligence to generate an offer if they know that someone else can take their offer and step in front of them. This type of right of first refusal can be a poison pill for a seller.

I propose an approach whereby the practice is appraised before the associate begins to work in the practice. This can help determine the financial outlook for owner profitability and associate income, and it also shows the associate what kind of pricing structure to expect in the future when the owner decides to sell the practice. If the dental associate doesn’t think that the pricing structure is fair, he or she may not want to enter into the arrangement to begin with.

At the point when the owner wishes to sell, the associate would be given an updated appraisal price and 30 days to decide if he or she wants to purchase at that price. If the answer is yes, the practice sale is completed. If the answer is no, the owner can then sell the practice to any other party at any other price without the associate having the right to come before another purchaser prospect.

I don’t advise giving an associate the option to purchase the practice unless the owner is absolutely sure that at any point in time he or she is financially and emotionally ready instantly to step aside. An option to purchase is different from the right of first refusal. In the right of first refusal, the seller gets to decide when he or she wants to sell the practice. In the option to purchase, the timing of the sale can be determined by the associate.

I strongly advise paying associates on a percentage commission. That is the only compensation method that will always be exactly right. A fixed salary will likely be the wrong amount, and someone will end up unhappy. A commission gives an incentive for associates and rewards them for going above and beyond. It is helpful to offer an advance draw on the commission to help the associate earn a living during the initial two months of entering the practice.

Carefully consider the termination terms. Will there be a covenant if the associate terminates with cause or if the owner terminates without cause? The minimum contract term and how much termination notice shall be given are issues that should be settled in advance. Document issues such as how re-treatment will be handled as well.

Owners should consider an insurance funded buy/sell agreement in the event of their death. A properly crafted buy/sell agreement can instantly solve what could become a very disastrous situation.

Owners can advertise for associates in many venues. Printed media, such as this periodical, reach a wide circulation. There are also many Web sites that owners can use to search for associates. Many transition consultants also offer associate searches and can screen applicants for the owner as well as suggest transition attorneys who can provide effective legal agreements.

If associateships are not researched, structured, or documented properly, they can create difficult problems from the outset, especially when an owner decides to sell. However, carefully documented and structured associateships can provide an owner with freedom, profitability, and security that is otherwise unattainable.

by Earl M. Douglas, DDS, MBA, BVAL |

ADS South, LLC
120 Istoria Drive
St. Augustine, FL 32095

Phone: (770) 664-1982

7 Serious Health Concerns That Also Affect Your Teeth

Mouth and Body Go Hand-in-Hand

Did you know that poor oral health care can be the cause of many different health issues within your body itself?  There are many connections between taking care of your mouth, teeth and gums and the rest of your body.

People with gum disease have a 40% increased risk of developing a chronic June FB Candy (6)health condition. Bacterial build up on your teeth and gums give you a greater probability of infection which may then spread throughout other areas of your body.

Common Health Issues That Affect Oral Health

  • Diabetes: causes oral inflammation and affects the body’s ability to process sugar.
  • Heart Disease: about 91% of those with heart disease are also found to have periodontitis. Inflammation in the mouth corresponds with the inflammation of blood vessels which then leads to less blood flow causing an increase in blood pressure.  There is also a chance of plaque that is attached to the blood vessel itself, breaking off and traveling to the heart and/or brain resulting in a heart attack or stroke.
  • Issues during Pregnancy: pregnant women with gum disease run the risk of premature birth, low birth weight, and susceptible to developmental issues such as learning disorders, lung and heart conditions.
  • Osteoporosis: osteoporosis, like periodontitis, causes bone loss. It’s common for those with osteoporosis to also have some degree of gum disease.
  • Rheumatoid Arthritis: those with rheumatoid arthritis battling gum disease have found gum disease treatment may also reduce overall body pain in regards to their arthritic symptoms.
  • Smoking: bad for your health, both overall and oral.  Nicotine interferes with your gums’ ability to fight infection.  This also extends the recovery period for those gum infection treatments.
  • Obesity: those with 20% or higher body fat percentage have been linked to rapid progression of gum disease.

Taking excellent care of your oral health has a positive domino effect for the rest of your body.  Same can be said with your body – taking care of your health and body can positively affect your mouth, teeth and gums.
If you care about your health and yourself, you in-turn need to care about your mouth.  Be true to your teeth, or they will be false to you!

ADS South, LLC
120 Istoria Drive
St. Augustine, FL 32095

Phone: (888) 714-7410

Fax: (678) 965-1812

Preparing for Your Transition: Experts for Dental Practices Tax & Financial Planning Workshop

 dental office tax workshop

Preparing for Your Transition

Registration & Breakfast: 8:00-8:30 am

Program: 8:30 am-Noon Followed by Luncheon Roundtable Discussion

 

Topics & Speakers

The Experts for Dental Practices Tax & Financial Planning

Tax Offense & Defense: Tom Stowe, CPA, Stowe & Stowe CPAs

Earl Douglas, DDS, MBA

Earl Douglas of

ADSsouth.com

 

10 Biggest Transition Mistakes: Earl Douglas, DDS, MBA, BVAL – ADS South, LLC

The Legal Side of Transitions: Joe Jordan, Attorney at Law

Protecting Your Business: Victor Holloway, MBA – Consolidated Planning, Inc.

Preparing for an Exit: Brian Cogan – Bank of America Practice Solutions

Reserve Your Seat Today!

Breakfast & lunch included for just $49.99 per person

Bring your spouse for just $24.99

Please RSVP to 980.819.2212 or admin@mosaicw.com by Tuesday, January 15th!

rsvpJan15-2013

Contact ADS South
www.ADSsouth.com | (770) 664-1982
Earl Douglas: Earl@adssouth.com

Are you looking to sell your dental practice? Start here…

ADS South Team in Charlotte at National ADS Meeting

When you list your practice with an ADS Specialist, you get not only your local marketing leverage, but also the benefit of ADS’ continual presence in Dental Economics, an exclusive partnership with DentalTown.com to market listings in real time as well as advertising in the ADA News, Dental Entrepreneur Magazine, a relationship with DentistryIQ.com and a connection to every ADS office in America via the ADS website you are currently visiting. The ADS website attracts and reaches potential buyers actively searching for practices.

However, the ADS network reaches far beyond just our member specialist brokers, magazines and websites, into our preferred lenders as well as practice management, accounting and law firms nationwide. These expansive connections allow ADS to reach more buyers in more ways, providing the most exposure possible in the marketing of your practice.

ADS reaches more doctors on a regular basis than any other specialist, nationwide, and, we’re constantly reviewing our marketing, looking for areas in which to expand so to best serve our selling doctors.

Contact ADS South

www.ADSsouth.com | (770) 664-1982
Earl Douglas:Earl@adssouth.com
James Howard:Jim@adssouth.com
Rebecca Kyatt:Rebecca@adssouth.com
Virginia Douglas:Virginia@adssouth.com

A Story of Three Dentists

Back in 2002 our firm encountered three dentists within a one year period who experienced the same event – death.

keys on metal key ringDr. A called our office, saying that he was going into the hospital for tests and needed a dentist to cover his practice, which we provided. I visited him at the hospital and his condition was so serious that he and his wife decided to sell his practice. I was given a key to the office and with the help of a dentist who was familiar with the practice’s software, I was able to quickly gather all of the information required to perform an appraisal and prepare a marketing package. The next day I contacted a prospect from our database, showed the practice to him and went over the practice figures and other information he requested. After several hours of inspection and study, he made a full price offer. The following day Dr. A died. During the following week, sale contracts were distributed and reviewed and a lease for the office and financing were obtained. The sale closed ten days later with the widow receiving the full price in cash.

Dr. B was exercising when he suddenly died. Our firm had coincidentally performed an appraisal of his practice six months earlier. Upon his death, his accountant and widow contacted our firm to sell the practice. Our first step was to provide a dentist to provide continued care for patients of the practice. With a current appraisal and marketing material in hand, we contacted a prospect from our database who quickly made an offer of 94% of the appraised price. Dr. B’s widow was paid in full in cash three weeks later.

If you’re looking to sell your dental practice, marketing with a professional gets it done faster!

Dr. C died in his office of a sudden heart attack. The family attorney commissioned us to perform an appraisal of the practice but elected to try sell the practice himself. After four months of no activity the attorney contracted us to sell the practice. The attorney failed to place a dentist in the practice to provide continuing patient care. The doors of the practice were essentially shut for four months, during which time practice value, as well as interest in the practice, had dropped precipitously. We immediately placed a locum tenens dentist in the practice to try to revive patient activity, which was minimal. Finally, five months after the owner’s death, a purchaser was found. The practice sold for one third of its originally appraised value.

Dr. A and Dr. B’s practice sales were as successful as if they had not suddenly died. Dr. C’s outcome was much less successful.

There are several factors in post-death practice sale success. The first is the use of a locum tenens dentist to continue the practice operation. Keeping the practice active is vital in preserving value and marketability. Many patients are lost when a practice is closed or when well-meaning nearby dentists cover the practice.

Another factor for success is enlisting a professional practice broker, even though the family may already have interested prospects. Expertise and experience are critical in marketing, prospecting, qualifying, financing and selling a practice. Having prospects to immediately contact for a sale is invaluable.

However, without complete and current practice data, even the best practice broker will be ineffective. Dentists rarely assemble this information during their lifetime. The task invariably falls on a grieving spouse who does not know what to look for, where to look, or who to call. The lack of complete practice information and a professional approach to marketing the practice may easily result in losses of hundreds of thousands of dollars.

The process of gathering practice information and pre-planning the practice sale process is practically impossible for a spouse, especially when the spouse is not involved in the practice. However, the process is relatively quick and easy for a dentist. Wise dentists will make this small investment of time and effort to ensure the best practice value and success for their family, patients and staff.

A free appraisal kit can be downloaded from our website.

Earl M. Douglas, DDS, MBA is the founding president of American Dental Sales. He is president of Professional Practice Consultants, Ltd. and personally serves the Southeast with affiliates nationwide. He can be reached at 770-664-1982 or visit our website.

Earl M. Douglas, DDS, MBA, BVAL.
Published in Dental Economics, September 2003

Meet the Founding President of ADS South: Nat’l Org of Dental Practice Appraisers & Brokers

At ADS we value our clients and respect their time. That’s why Earl can be anywhere within our service areas in as little as two hours.

Dr. Douglas can present any of the following topics in as little as one hour and up to six hours.  Most topics also include essential information on how to be able to financially be successful in retirement.

1.  Your practice transition

2.  The ten biggest transition mistakes

3.  The fifteen biggest transition mistakes

4.   Increasing your practice value and marketability

5.   Creating and finding value in a dental practice

6.   Dental practice transitions in recession

7.   Evaluating and appraising dental practices

8.   Case studies in successful and not so successful practice transitions

9.   Practice transition principles and strategies

10.  Partnership pitfalls and how to avoid them

11.  Deciding on a practice to purchase

Besides being one of the most experienced transition experts and speakers in his field, Earl M. Douglas, DDS, MBA, BVAL, is the founder of ADS South, a dental practice appraisal and brokering company serving the Southeast.  He is the founding president of ADS, a national organization of dental practice appraisers and brokers.

Dr. Douglas earned his Doctor of Dental Surgery degree from the Baltimore College of Dental Surgery, University of Maryland School of Dentistry in 1971. He practiced in the U.S. Army Dental Corps at Fort Benning, Georgia from 1971 to 1974 and in Stuttgart, Germany from 1974 to 1977 and was in private practice in Atlanta, Georgia from 1978 through 1982.

After the sale of his private practice in 1982, he began his career in practice transition consulting. He received his Master in Business Administration degree from Brenau College in 1984 and founded Professional Practice Consultants, Ltd. in the same year.

Dr. Douglas is the author of cash flow analysis software used by professional brokers and lenders. Dr. Douglas is a member and contributor of the Practice Valuation Study Group and a member of The Institute of Business Appraisers and was awarded the BVAL designation (Business Valuator Accredited in Litigation) in 2007.  Dr. Douglas has been admitted as an expert witness before courts in Alabama, Arkansas, Georgia, North Carolina, and Tennessee.

Dr. Douglas has presented at many dental schools in the Southeast and to various dental study clubs, the Hinman Dental Convention, the Tennessee Dental Association, the National Dental Association, the New Orleans Dental Association, the Rossner Memorial Lecture in New Orleans and a two year series of presentations for Dental Economics.  He has presented for several years to the National Society of Certified Healthcare Business Consultants.

Dr. Douglas is also a contributing author for Dental Economics magazine.

Dr. Douglas can be reached at 770-664-1982 or douglas@adssouth.com

Value or Price – Choose Wisely | Dental Practice Transitions

Earl M. Douglas, DDS, MBA, BVAL.

 

There has been a great deal of discussion over the years about dental practice price, but very little has been said about practice value. It is especially important that practice buyers understand these terms and be able to differentiate between them, since practice value has significantly more impact upon the futures of buyers than does practice price.

Price is the consideration (cash, note, barter, etc.) paid to a seller to acquire an asset. Sellers receive price. Value is the benefit received by the buyer from the use and ownership of the acquired asset. Buyers receive value.

All too frequently buyers zero in on price as the primary practice purchase issue while ignoring the issue of value. However, buyers stand to benefit much more by receiving high value than by paying a low price, since the primary practice value is actually the net income the buyer takes home from the purchased practice.

I illustrate this point by asking buyers to consider two similar practices. Practice A grosses $400,000 and is priced at $275,000. I ask buyers if this is a good deal. Most buyers admit they do not know.

Then we look at Practice B which grosses $400,000, of which the hygienist produces $100,000 and the buyer produces $300,000. After paying all of the overhead expenses and all of the purchase payments, the buyer will have a net income of $140,000. Without even knowing the price, most buyers believe that Practice B is a good opportunity. Knowing the price and gross alone does not make for a well-informed decision. Knowing the cash flow-derived value, or net income, received in return for the amount of work performed by the buyer, does allow for a well-informed decision.

Consider Practice C which grosses $400,000 and is priced at $300,000. After paying all the practice overhead expenses and all of the purchase payments, the buyer will receive value, or net income, of $150,000. Now examine Practice D, which is very similar to Practice C. It also grosses $400,000, but is priced at $250,000. After paying all the practice overhead expenses and purchase payments, the buyer will receive value, or net income, of only $125,000. This comparison shows that it is actually possible to pay a higher price for a practice and still receive more value, or net income. Differences in fixed expenses, such as rental cost, can cause such differences. Which practice would you choose?

While we do not suggest overpaying for any practice, we do point out the old saying, “you get what you pay for”. Since “what you pay for” is net income in the case of dental practices, higher priced practices will generally yield higher net incomes, even after paying the payments. In the case of purchasing a practice, it is often safer to pay slightly too much than too little.

We strongly suggest that if you are considering buying a practice and are seeking professional advice on price, be sure that you also receive a practice cash flow analysis to learn all of the important facts, especially the answers about practice value, the net income you will earn.

Phone: (770) 664-1982 • Fax: (678) 965-1812 • Email: earl@adssouth.com
Originally Published in Dental Economics, November 1998
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