Amy Deschamps has been in the dental industry for over 25years. She brings hands on experience as a licensed RDA. Additionally, Amy brings over 11 years of dental consulting experience as a trained professional by a nationally know dental firm called Mercer Advisors. Amy’s passion for dentistry, love of numbers, and the story they tell, has narrowed her focus in the industry to being the go to expert when wanting to understand the operational health of the dental business. Upon identifying the story the numbers tell – Amy works closely with the dentists and teams to develop a strategic implementation plan for tapping into the opportunities within the practice.
In this episode we discuss:
- What is involved with selling a practice or hiring an associate
- What determines a phantom patient when selling or buying a practice
- What are some of the tough questions a dentist should ask before starting a transition
Tell us a little bit about what you do?
There are different types of transitions. One could be a doctor that is really busy and cant keep up with the business all on their own, and they feel like they are at that crunch point where they need to bring someone on and they dont know what that looks like. There is a number that you can look at depending on the type of services that are being delivered within the practice to see if this doctor is at capacity and to see if they can bring on an additional provider. That means going in from a analysis standpoint and consulting aspect to see if there is enough volume of patient flow, is there enough volume of inventory that has been untapped that is still treatment plans that havent been completed to this point to where if you were to bring on an additional provider there would be work for them to do. There are many metrics involved in the process of understanding if that person is ready for a transition.
There is also the transition of a seller selling and a buyer coming in and buying the practice outright. There is a short transition period sometimes where the seller will stay on to introduce patients for a period of time, and then there are times where the seller just wants out and are ready to go as soon as the paper is signed. So, there are different types of transitions and where I see things happening from my perspective, the majority of my clients are in Arizona but I do travel out of state based on referrals from other people and a transition is a transition despite where the place is but you have to look at it from what is happening in that industry around you and in our industry right now, there is a lot of corporate coming into our area and I am seeing the young dentists coming out of dental school working in the corporate world to get some of their debt paid down but then they feel like they are ready to have their own practice and have no idea what that looks like or where to turn to.
I have heard that it is good to transition slowly so that the old dentist can introduce the patients to the new one and a lot of times the value of the practice is better. But there is also hidden things. A lot of times the old dentist will create phantom patients in the records which make the numbers look higher. Can you comment on that?
A lot of times phantom patients are part of “What is my actual patient base?” When I go to look at the active patient base that is one of the things that I stress most importantly and I could do an entire talk on just the active patient base from the stand point that I have to understand just how many of these patients are in the participating side of my practice, meaning that they are coming regularly in my continual care cycles. When they are coming regularly I can build hours necessary in my schedule moving forward in planning my business moving forward. I can plan that based on knowing what the percentage of my patients are active in my hygiene. What we also look at is when your software says you have a certain number of active patients, it is not necessarily counting the patients that we are in a relationship with. So if I have a hygiene due date in the software I can pretty much count on those patients coming back if we can go and capture them with whatever our recall processes are and getting them back into the practice. What I look are those that also have only come in for a limited, or problem focused, or consultation so when the due diligence process prior to this transition starts happening, we look at what is the health of the patient base overall. What I look at from a planning perspective is, how many patients do I really have that I am in relationship with and servicing them in my continuing care processes, so I can build and project the planning of my schedule and the number of days I need for hygiene and if I have enough hours to service those patients.
You mentioned due diligence before. What are some of the elements of due diligence?
The methodology that I use ties back to my name D4Metrics. D for Dentistry, the four areas that I focus on, and the metrics surrounding those areas. Those four areas include, the facility, the patients or clients that you service, the team members and staff that service those patients, and then the schedule that is now built around all of those components. For example, I look at the facility from accessibility, number of chairs, technology, and we begin to assess the vision of what this practice looks like. It’s not only the cash flow analysis or what the bank looks at as far as what the practice collects, with my buyers and why they come to me is because I give them piece of mind to truly understand that what they are looking at from a practice, all of these four areas are either going to need to have focus put on them sooner rather than later or some that can wait based on what we know about the practice.
If I was looking to find an associate or sell my practice, when should I be asking the tough questions? When should the due diligence get started?
Sooner rather than later. We first want to look at what is your slow-down strategy or what is your exit strategy. We look at how much do you want and what would you need someone to fill in the gaps for. Then we look at if you are growing enough to be able to start creating enough inventory for you and an associate or are you just going to transition from what you have been doing and just hand that over to the new person. If you want to stay on board and you want to bring someone on in addition, there has to be enough flow of inventory for both providers and at what level each provider wants to be incorporated into the schedule.
What are some of the pitfalls of these transitions? What do you feel like people need to know before deciding on this?
The practice can have everything in the world that it needs for the transition, but the personality styles have to fit. When you are looking at bring in someone, it is almost like dating in the sense that you have to find out if you have complete opposite styles, or do you have somewhat congruent styles in a way, or can you compliment each other based off of what you do and what the other will do, or are you looking on taking the role of a mentor and taking this new person under your wing. My heartfelt desire, is that the two people involved see this as a relationship, whether business or friendship, that you develop through this whole transition process so that its going to be a great relationship that is not going to get on the rocks.
Is there anything that you want our listeners to know?
I try to encourage everyone to truly understand the number of patients that you have a relationship with and where you are in relationship with those patients. Are they active in your hygiene or are they just limiteds? When we know how many patients we have, then we will know how many patients we are going to need in an effort to be able to take care of how ever many providers we are looking at to incorporate into the practice, or be able to build schedules for moving forward. So my one number is always looking at is how many patients do I have and what is the make up of those patients. Where are we in relationship with those patients and do we have some work to do to improve those relationships.
What is the best way for people to get in touch with you?
Email: Amy@d4metrics.com
Amy Deschamps
@The Passionate Dentistry- Thank you for an amazing hour together. Listeners Enjoy!!