Practice Transitions

Practice Transitions – When the Status Quo is Working Well, Why Mess With Success?

Let’s say you’re a busy orthodontist in your mid-40s in a single doctor practice.  Your annual collections are $1,800,000, and new patient exams are booked six weeks out.  Yours is the only practice in town.  A young orthodontist about to graduate from his residency program contacts you about joining your practice as an associate with […]

Motivating an Under-Producing Associate Who Wants to be Your Partner

Let’s say you have an associate who wants to be your partner. He is a terrific clinician and a wonderful person, but he does not produce at an acceptable level. If that is the only thing holding him back, we would set a reasonable standard he needs to meet. For example, it might be that […]

Practice Sales to Start-Up DSOs Can be Risky

If you are going to sell your practice to a dental support organization (we’ll avoid editorializing about this), only consider one of the large organizations that already owns a couple hundred practices.  They are well-capitalized so they can afford to pay a decent price and invest money back into the practice as need be.  Avoid […]

Some Good News on the Employee vs. Independent Contractor Front

A Recent U.S. Tax Court Case Shows How to Avoid Large Back Taxes and Penalties:  This case (Mescalero Apache Tribe v. Comm., 148 T.C. 11 (2017)) involved a New Mexico Indian tribe that has its own government of about 5,000 people.  Some were classified as employees and some as independent contractors.  The IRS audited and […]

Group Practice Split-Ups

There are many good reasons to take a partner, but making money on the deal is not one of them.  It is possible to make money from the work of an associate.  But doctors usually break even or lose money when elevating an associate to co-owner.  Incorporated group practices that split up can take advantage […]

Multi-Specialty Group Practices

Over the past three years we have represented an increasing number of multi-specialty group practices, and we continue to field phone calls from clients who are considering this.  These are complicated transactions, and in some cases, the allure of joining forces turns out to be more aggravating and less profitable than anticipated.  There is no […]

Accounts Receivable and the Sale of a Practice

We recently saw a case where negotiations for the sale of a practice were at an impasse.  The problem was how to fairly value the seller’s accounts receivable.  A buyer does not want to pay a penny more than their value and a seller does not want to receive a penny less.  The solution is […]

Section 336(e) of the Tax Code Permits a Purchaser and Seller in an All-Stock Practice Sale to Treat The Transaction as a Tax-Deductible Asset Sale – Which Can be a God Send for the Young Practice Buyer Hoping to Retain the Seller’s Grandfathered Delta Premier Status

Outright practice sales can be structured one of two ways.  The first is a stock sale, where the buyer purchases the seller’s stock in the practice corporation and takes over ownership.  This is a simple transaction.  The corporation is the same; it just has a new owner.  The second is an asset sale, where the […]

When to Start Looking for a Practice Buyer

This largely depends on how easy or difficult it will be to find the buyer.  You will have an easier time the more general your practice is (general dentist, orthodontist, pediatric dentist) and a more difficult time the more specialized it is (endodontist, periodontist, oral surgeon or prosthodontist).  The other major factor is geography.  The […]