You don’t know what you don’t know.
And if you sign legal documents for a dental practice sale without the help of an experienced lawyer, you may be acting against your own best interests.
So, what is a dental attorney looking for in the fine print that you might miss?
Cecilia Chen is an attorney who specializes in dental practice transitions. She started her own firm in 2009 and has been focused on the dental niche since 2011.
On this episode of The Dental Boardroom, Cecilia joins host Drew Phillips to explain how setting up a trust early on makes the sale of a practice much easier should the doctor pass away unexpectedly.
Cecilia shares her experience helping dentists sell their practice to a dental service organization and offers advice on what terms to pay attention to if you’re negotiating with a DSO.
Listen in for insight on dealing with patient credits and prepaid treatment plans in a dental transition and learn how to ensure that the legal documents for a practice sale align with your interests.
[0:40] Cecilia’s background as an attorney and how she got into the dental transition niche
[2:23] Why it’s crucial to have a plan in place for transitioning a dental practice should the doctor pass away unexpectedly
[5:40] What families can do to mitigate revenue decline while a dental practice is in probate
[7:54] How to choose the best person to manage and sell your practice after you pass away (and why it might not be your spouse)
[10:37] Why Cecilia recommends setting up a trust for your practice as part of the post-close process
[12:08] The challenges families face in the deal process when a doctor has passed away
[16:32] Cecilia’s experience helping doctors sell a dental practice to a DSO
[20:09] What terms a doctor should pay attention to if they’re considering a sale to a DSO
[24:34] How doctors can negotiate with DSOs to have a say in important decisions post-sale, i.e.: staffing
[28:07] What differentiates private vs. DSO transactions in the pre-LOI stage
[34:39] How to make sure legal documents align with what’s promised in a DSO transaction
[36:46] The danger in overlooking patient credits in a dental practice sale
[40:50] Cecilia’s take on why buyers should honor patient credits—even if they inherited them unknowingly
[43:12] How Cecilia thinks about transferring prepaid treatment plans to the buyer of a dental practice
[48:52] When and how to address a seller’s preference to continue working in a practice after it’s sold
[51:30] Cecilia’s advice on approaching the opportunity to buy or sell a dental practice with optimism but doing the work to protect yourself
Wes knows what's best for dental practices. He's been doing this for a long time and he sees lots of practices. He can tell me how our practice is doing, and what we can do to increase our productivity. With past CPA's, there were no ideas. It was all coming from me, saying "I think I can do better, but I don't know how." I come in to meet with Wes and he says "You CAN do better, and I know how."
PracticeCFO is in hundreds of dental offices around the country. They know what numbers should look like. They know what percentages of payroll, rent and supplies should be, and they will hold you accountable to those numbers, which will really help you stick to your plan and your path of growth and savings. That is invaluable
Whenever something comes up, whether it's building or practice related and we weren't sure where the numbers would go, PracticeCFO has been instrumental in helping us figure that out. I can't say enough of how important that is - that it goes beyond that initial partnership. They make sure this business marriage works.
When I go home from work, I don't spend a whole lot of time stressing about what my books look like, or how much I owe in taxes. By using PracticeCFO, the burden of keeping track of a lot of the big financial numbers and metrics are taken off my plate.
PracticeCFO helped me develop a plan for the future. I have colleagues that work with other accountants that don't have a plan - they just look at the numbers of the practice and that's it. There's no plan for 10, 20 years from now. But with PracticeCFO, you get that. PracticeCFO makes you feel like you're they're only client.
(In reference to his practice sale) What could've been super stressful, wasn't! When picking John and Wes, it was from word of mouth recommendations and other people's experiences from the past that really did it for me. And it turns out that those recommendations were right on the line.
Wes knows the business side of dentistry. His comprehensive plan will organize your personal and professional finances so you can focus on taking care of patients. Massive ROI.
I can’t say enough good things about everyone at PracticeCFO. Everyone on the team is professional, organized, knowledgeable, helpful and kind. They also respond to emails and phone calls immediately and are always happy to help. They have helped me navigate year-to-year as a business owner. PracticeCFO gives me peace of mind that my business is in good hands.
I love Practice CFO! They have helped me obtain a practice and maintain a practice. They are incredible people who are on top of everything and make owning and running the business portion of a practice easy. They couldn’t be better for my business and my sanity. They have every detail of the business and taxes taken care of where all I have to do is show up and follow their easy steps to success!
Practice CFO has the best tools I’ve seen for personal tax and financial planning in addition to top-tier corporate tax and accounting services. I have been very pleased with the level of quality service. They manage my monthly bookkeeping and accounts payable. It is a great system and saves me a ton of time, and it allows us to have monthly financial statements within a week of month end.