Ep 09: Proactive Exit Planning: Ensuring a Smooth Transition in Dental Practices

Dr. Tom Snyder is a former Department Chair at the University of Maryland School of Dentistry, Dr. Snyder is currently a member of the faculty of the University of Pennsylvania School of Dental Medicine. He also serves on the editorial boards of several national publications and is a regular contributor to Dental Economics. He is a nationally recognized speaker, author, and consultant who has been advising dentists for over 30 years in dental practice strategic planning, practice valuations, and dental partnership formation. Dr. Snyder received his DMD from the University of Pennsylvania’s School of Dental Medicine and his MBA from The Wharton School, Graduate Division, at the University of Pennsylvania. In this episode, host Stan Kinder welcomes Dr. Tom Snyder, a seasoned figure in dentistry with a diverse career. Dr. Snyder, currently overseeing valuation analysis for Henry Schein, discusses key aspects of dental practice transitions. The conversation explores trends in practice valuation, emphasizing the impact of location, cash flow, and physical plant on value. Dr. Snyder highlights the three approaches (market, income, and asset) used in their valuation protocol and addresses the intricacies of valuing goodwill. The episode stresses the importance of early planning for transitions, ideally three to five years in advance, covering aspects like financial planning and practice improvement. The speakers also delve into the average timeline of six to nine months for selling a dental practice, discussing challenges related to due diligence, financing, and lease transfers. Dr. Tom Snyder emphasizes the significance of securing financing for dental practice acquisitions. He discusses major players in the lending space, such as Bank of America, TD Bank, and Huntington Bank, highlighting the favorable track record of dentists in loan repayment compared to other businesses. Dr. Snyder notes the importance of cash flow in obtaining financing and encourages potential buyers to act promptly, considering uncertainties like interest rate fluctuations and inflation. The conversation delves into the potential for revenue growth post-acquisition, especially when younger, more energetic dentists introduce new procedures not previously offered by the selling practitioner. The hosts stress the value of seeking professional advice during practice transitions, emphasizing the expertise of consultants and coaches. Dr. Snyder also provides valuable advice for solo practitioners over the age of 50, urging them to assess the value of their practices and prepare a letter of instruction in case of unforeseen events. Here’s what to expect this episode: Dental Financing Landscape: Dr. Tom Snyder outlines the major players in dental practice financing, emphasizing how smaller banks may engage due to the sector's low default rates. Cash Flow is Key: The crucial role of cash flow in obtaining financing for dental practice acquisitions is underscored, contingent on a buyer's clean credit history and qualification. Post-Acquisition Growth Strategies: The podcast explores the potential for revenue growth after practice acquisition, emphasizing the positive impact of new practitioners with diverse skill sets. Professional Guidance Matters: Stressing the importance of professional advice, hosts highlight the role of consultants and coaches in ensuring a smooth and successful dental practice transition. Strategic Exit Planning: Dr. Snyder advises solo practitioners over 50 to assess their practice value and prepare a letter of instruction, emphasizing the need for a proactive exit plan in unforeseen circumstances. Connect with Thomas Snyder: https://dentalpracticetransitions.henryschein.com/leadership/dr-tom-snyder/ Connect with Stan Kinder: https://www.everythingdso.com/ Learn more about your ad choices. Visit megaphone.fm/adchoices