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INSIDE THIS ISSUE
1. Leadership, Mindset, and Practice Culture
4. The Owner Bottleneck
4. The Most Dangerous Number in Your Practice
LEADERSHIP, MINDSET, AND PRACTICE CULTURE The Essential Building Blocks for a High-Performing Dental Practice (703) 298-1690 · DentalGrowthAndExit.com Year 1, Issue 2
5. The Practice That Runs Without You
5. The Meeting That
Fixes Most Practices
6. Servant Leadership: The Secret Weapon of High-Performing Dental Practices
culture. Get these right, and everything else becomes easier. Get them wrong, and no amount of software, scanners, or Instagram ads will save you. Most dentists are trained to be clinicians, not leaders. They are excellent at diagnosing decay but poorly equipped to diagnose dysfunction in their own businesses. They can see a cracked molar instantly, but are often blind to a cracked culture that’s quietly sabotaging profitability, morale, and growth.
Think back to the first day of dental school, just setting out on your journey to become a dentist. You graduated with the foundational clinical skills to begin seeing patients. You spent the intervening years studying and working hard to be a better clinician. Congrats. Now, think back to the first day of practice ownership and confronting the sheer terror of realizing you are responsible for absolutely everything. If you are like 95% of all practice owners, you believe the best path to practice success is becoming an ever more capable chairside dentist. While being the best dentist you can be is always a good thing, it’s not enough to take your practice to peak performance. Although I am not a dentist myself, I started a practice from scratch in partnership with a dentist. The lessons came hard, and I have the scars and almost 18 months of red ink to prove it. If you think a high-performing dental practice is built on technology, décor, or fancy marketing, you’re already behind. Those things matter, but they are secondary . They are the paint on the house, not the foundation. The real foundation of a high-performing dental practice rests on three pillars: leadership, mindset, and
8. Stan’s Monthly Rant
8. How to Avoid Mistakes in
Practice Sales and Acquisitions
Let’s start with leadership.
10. The POSITIVE
Leadership Is Not About Being Nice Dentists often mistake leadership for likability. They think, “If my team likes me, I’m a good leader.” That is wrong. Leadership is not about being liked. Leadership is about being effective . An effective leader sets clear standards, defines expectations, and holds people accountable — including themselves. Weak leaders avoid conflict, dodge tough conversations, and let problems fester like untreated periodontal disease.
Power of NEGATIVE Preparation
12. Practice Culture, Your North Star
13. Why ‘Not Ready
to Sell’ Is the Most Expensive Lie
13. Why Case
Continued on Page 2 ...
Acceptance Is a Systems Problem
Stan Kinder has over four decades of experience serving the dental profession in a variety of roles. He has helped dentists with every type of practice transition, traditional brokered transactions, consulting on associate-to-partner buy-in/buy-out agreements, and, for more than 15 years, as a senior mergers and acquisition executive with several different DSOs. Along the way, he consulted on practice management and growth. He is a one-of-a-kind resource for the practice owner seeking the optimal exit. Parthiv Shah is a growth strategist, entrepreneur, and bestselling author who helps professional practices scale with clarity, systems, and purpose. He is the holder of two U.S. patents, reflecting his long-standing commitment to innovation and practical problem-solving. Parthiv is the author of two bestselling business books and the recently released “ Dental Growth Machine,” published by EDRA, which outlines a proven framework for building sustainable, scalable dental practices. Through his writing, consulting, and advisory work, Parthiv is known for blending strategic insight with real-world execution to help leaders grow smarter, without burning out.
14. The Hidden Cost of Cheap Patients
15. Who Buys Your Practice Matters
More Than You Can Imagine
16. Turn an Ordinary
Practice Into a Dental Growth Machine
16. Harnessing Patient Feedback
Stan Kinder - (703) 298-1690 · 1
... continued from Cover
Strong leaders act like CEOs, not technicians.
Changing your mindset is key to escaping the proverbial dental treadmill of trading time for money, where the only pathway to a better income is working harder and longer. Thinking about your practice as a business, not just where you practice your profession, requires a skill set not taught in dental school. Embracing the mindset of a business owner, rather than simply a dentist, supports growth without complete dependence on what you do moment to moment. Where to start? Read Gerber and become a voracious reader of all things business, and don’t be afraid to seek outside help or coaching. High-performing practices are built by dentists who think like business owners, not victims of the system. They do not complain about reimbursement; they design their practice to be less dependent on it. They do not whine about staffing shortages; they build a culture people want to work in. A growth mindset is not some fluffy self-help concept — it is a competitive advantage. Dentists with the right mindset see problems as opportunities. They don’t ask, “Why is this happening to me?” They ask, “How can I turn this to my advantage?” Instead of saying, “Patients won’t pay,” they say, “How can I better communicate value?” Instead of saying, “My team isn’t motivated,” they ask, “How can I create an environment where motivation thrives?” Instead of saying, “I’m too busy,” they say, “What systems do I need so I’m less overwhelmed?” Your mindset determines whether your practice is reactive or strategic. And most mediocre practices are reactive. Culture: The Multiplier Effect Culture is not pizza parties, casual Fridays, or team-building exercises.
They don’t hide in the operatory and hope the practice runs itself. They design systems, shape behaviors, and make deliberate decisions about who gets to work in their business. Effective leadership elevates the performance of everyone on your team. Better leaders have better, higher-performing teams. A high-performing practice requires a dentist who leads from the front. Someone who decides: • What kind of practice they are building • What kind of patients they want • What kind of team they will tolerate • What kind of standards will they enforce Leadership begins with clarity. If you can’t clearly articulate your vision for your practice, you cannot expect your team to execute it. Mindset: The Invisible Engine of Performance and the Key That Unlocks Practice Prosperity Most dentists don’t realize how much their mindset shapes their results. If you think, “Insurance controls my life,” then it will. If you think, “Good staff is impossible to find,” then it will be. If you think, “Patients don’t value dentistry anymore,” then your practice will reflect that belief.
Your mindset becomes your reality.
Unfortunately, most dentists tend to think of their practice simply as the place where they practice their profession. You are probably wondering … “Why unfortunately?” The answer is simple: How you think and what you believe determines what you do and how you focus your energy and spend your time. Michael Gerber, author of “The E-Myth,” describes most small-business owners as technicians with a particular skill who go into business for themselves. Think of the plumber who starts a plumbing business or the baker who opens a bakery. Most dental practice owners, even though highly educated and well compensated, fit a similar profile. One of Gerber’s most famous quotes is, “If your business depends on you, you don’t own a business — you have a job.”
Culture is how people behave when the dentist is not in the room.
If your team cuts corners when you’re not watching, you have a bad culture.
If they gossip, complain, or undermine leadership, you have a bad culture.
If they avoid accountability, you have a bad culture.
2 · DentalGrowthAndExit.com
A strong culture does not happen by accident. It is engineered.
They lack: •
Real leadership
High-performing dental practices have cultures built on three principles: 1. Shared Values The team understands what the practice stands for — excellence, integrity, patient care, professionalism, and continuous improvement. 2. Clear Expectations Everyone knows what “good” looks like. There is no ambiguity about performance, communication, or behavior. 3. Mutual Accountability Not just the dentist holding the team accountable — the team holding each other accountable. When culture is strong, the practice becomes self-regulating. Problems get addressed before they escalate. Poor performers either improve or leave. High performers thrive. When culture is weak, the dentist spends all day putting out fires instead of building a business. The Interconnection of Leadership, Mindset, and Culture These three elements do not operate independently, they reinforce one another.
• •
Business-oriented mindset
Intentional culture
So, they compensate with technology, marketing gimmicks, or outsourcing everything, hoping something will magically fix the problem.
It won’t.
You cannot market your way out of a bad culture. You cannot buy your way out of weak leadership. You cannot automate your way out of a flawed mindset. What High-Performing Dentists Do Differently The best dentists in business share common traits: They take ownership. They don’t blame insurance, the economy, or their staff. They lead intentionally. They invest in their own development as business owners. They treat their practice as an asset, not just a job. They understand that practice grows only as much as they grow.
Your leadership shapes your culture. Your mindset shapes your leadership. Your culture reinforces your mindset.
The Hard Truth Your practice will never outperform your leadership.
If your practice is stuck, stressed, or stagnant, the problem is not “out there.” It is in the mirror.
A confident, decisive leader creates a culture of confidence and high performance. A fearful, hesitant dentist creates uncertainty and dysfunction. A dentist who believes in growth attracts ambitious team members. A dentist who believes “good help is impossible to find” attracts mediocrity. A practice with a strong culture makes leadership easier because the team aligns with the mission rather than resisting it. Why Most Dental Practices Underperform Most dental practices fail not because of clinical incompetence — dentists are generally excellent clinicians. They fail because of human and organizational incompetence.
But that’s also the good news.
If you improve your leadership, your mindset, and your culture, your practice will improve.
Better patients will show up. Better staff will be attracted. Better performance will follow.
Not overnight, but inevitably.
The Real Question Do you want to run a busy dental office, or a high-performing dental business? If you want the latter, you must commit to mastering leadership, mindset, and culture. Because in modern dentistry, clinical skill alone is not enough. The dentists who win going forward will not just be the best clinicians — they will be the best leaders.
And that makes all the difference.
So, ask yourself these simple questions: • What kind of leader are you today? •
What kind of leader do you aspire to be?
• What is your mindset? How do you view yourself, your practice, and life in general? • If culture determines how you and your team live your values every day, what do you and your practice stand for?
Stan Kinder - (703) 298-1690 · 3
That’s not leadership. That’s limitation.
Being the most important person in the practice feels empowering, but it’s the opposite. It caps growth, drains energy, and keeps the business tied to your personal bandwidth. If the practice can’t function without you, it can’t grow beyond you.
Real growth starts when you stop being essential to everything.
That doesn’t mean disappearing. It means designing the practice so your judgment shows up through structure instead of constant involvement. Clear authority replaces endless questions. Expectations replace hovering. Decisions happen without waiting for your approval. When you stop being the default answer, your team starts thinking. When your team starts thinking, problems get solved faster, and often better than if you’d stepped in yourself. Here’s the hard truth: If you believe, “They can’t do it like I can,” and you’re right, you’ve built a fragile business. If you’re wrong, you’ve been standing in your own way.
THE OWNER BOTTLENECK Your practice doesn’t stall because of the market, the economy, or competition. It stalls because too much still runs through you. When every decision, approval, exception, and rescue comes back to your desk, growth slows to a crawl. Not because your team isn’t capable, but because they’re not allowed to be. The practice learns a quiet lesson: Nothing moves unless you move it.
Don’t block your own growth. Don’t trap your practice inside your calendar.
A practice that depends on you to survive is vulnerable. And being the most important piece of your practice is a growth ceiling you put there yourself.
That’s the bottleneck. And it’s you.
Owner-dependence often feels responsible. You know the patients. You know the numbers. You know how things should be done. So, you step in. You fix. You decide. Over time, your presence becomes required for normal operation.
THE MOST DANGEROUS NUMBER IN YOUR PRACTICE Most dentists track production. Many track collections. Some track new patients. Very few track the number that actually decides whether the practice grows or stays stuck.
The most profitable practices don’t diagnose more. They complete more. They know exactly how much treatment is sitting unscheduled. They know how long it’s been there. And they have a predictable process to bring patients back into care. When unscheduled treatment goes down, everything improves. Production rises without more patients. Marketing pressure drops. Schedules feel lighter even as revenue climbs. If you want one number to watch that actually predicts growth, this is it. It’s how much diagnosed dentistry is still waiting for a yes. That number is either working for you or quietly working against you.
Unscheduled treatment.
Every diagnosed case that leaves without a next appointment is revenue that already exists, but isn’t realized. It doesn’t show up as a loss on your P&L. It just sits there, invisible, quietly controlling your future.
This is what makes it dangerous.
Unscheduled treatment creates a false sense of demand. The schedule looks full, the phones keep ringing, and the practice feels busy. Meanwhile, diagnosed dentistry piles up in charts rather than being completed. Growth stalls, not because patients don’t need care, but because the system lets opportunity walk out the door. The math is simple. If your practice diagnoses $100,000 in treatment each month and completes $65,000 of it, you’re not underperforming; you’re leaking $35,000. Over a year, that’s $420,000 in
dentistry that never happens. Not because patients said no forever, but because the practice failed to convert “maybe” into “scheduled.” Most dentists assume unscheduled treatment is about price. It’s usually about follow-up and clarity. Patients leave unsure, distracted, or overwhelmed. Without a calm, consistent system to bring them back, nothing moves.
4 · DentalGrowthAndExit.com
THE PRACTICE THAT RUNS WITHOUT YOU Most dentists say they want freedom. Fewer are willing to build the kind of practice that actually creates it. team to define what “urgent” actually meant and what could wait. Once they had a shared definition, he stopped stepping in. The first few weeks were forget what day it is. When he came back, nothing dramatic had happened. No disasters. No fires. No desperate calls.
messy. Not wrong, just different. And then it got better than before. The team got faster. The schedule got cleaner. He stopped spending mental energy on something that shouldn’t have belonged to him in the first place. Another shift came with case follow-up. For years, unscheduled treatment lived in his head. If he didn’t remind someone to call a patient, it didn’t happen. So, he helped his team design a simple rhythm: When a patient left without scheduling, they were contacted a few days later, then again the next week, and once more the following month. Same tone every time. Calm. Helpful. No pressure. Once that was in place, he stopped asking, “Did anyone call Mrs. Smith?” because he already knew the answer. He saw the same thing with financial conversations. He used to jump in when money got awkward. Then he sat down with his team and walked through what those conversations should sound like. Not scripts, just expectations. What clarity looks like. What confidence sounds like. What never gets apologized for. He stayed out of the room after that. The funny part? Acceptance went up. The more he removed himself from being the solution, the more capable his team became. The turning point came when he took his first real vacation in 15 years. Not the kind where you check your phone every hour. The kind where you
They imagine freedom looks like fewer hours or longer vacations. But real freedom in practice ownership shows up on a random Tuesday, when you’re not there, and nothing falls apart. The first time that happens, it feels strange. You’re used to being the glue. The decider. The fixer. The person everyone looks at when something goes sideways. When that stops, it can feel like you’re no longer needed. In reality, it means you finally built something that doesn’t depend on heroics. One dentist I know learned this by accident. He caught a nasty flu right before a long weekend and couldn’t come in. He expected chaos. Instead, his office manager texted him a simple update: “All good. We handled the schedule, moved two patients, solved a lab delay, and everyone’s happy.” He didn’t feel relieved at first. He felt unsettled. If they didn’t need him for any of that, what had he been doing all those years?
And that’s when he understood something most owners never do: If your presence is required for normal operation, you didn’t build a business. You built a dependency. Delegation is not about dumping tasks. It’s about deciding what does not require your brain. Scheduling does not require your brain. Follow-up does not require your brain. Financial conversations do not require your brain. They require clarity, training, and trust. Autonomy doesn’t come from systems alone. It comes from letting people use them without you hovering. A practice that runs without you is not one where you’re unimportant. It’s one where your importance is no longer tied to putting out fires. You get to think. You get to lead. You get to decide where the practice goes instead of spending your days making sure it survives.
The answer was uncomfortable: He had been protecting his own importance.
That’s not stepping away. That’s finally stepping up.
For years, he personally approved every schedule change. He decided which patients were moved, which were squeezed in, and which had to wait. He told himself it was about quality. But really, it was about control. Letting go started small. He stopped deciding which emergencies fit where. He worked with his
The Meeting That Fixes Most Practices
Most dental practices don’t struggle because they don’t meet often enough. They struggle because meetings have become time sinks. Conversations wander, frustrations get aired, and the same issues resurface week after week without ever getting resolved. And because those meetings feel useless, dentists either cancel them, rush through them, or stop expecting anything meaningful to come out of them. That’s a mistake because one specific meeting, run the right way, can quietly fix more issues than almost anything else you do.
It’s not a place to relive what already happened. It’s not a place to vent. And it’s definitely not a place to ambush people with surprises. The tone matters more than the agenda. The most effective meetings feel calm and focused. There’s a sense that problems are welcome, but drama is not. When meetings turn emotional, they stop being useful. Emotion clouds judgment, and judgment is what leadership meetings exist to sharpen. The biggest mistake dentists make is allowing meetings to become complaint forums. Someone brings up a problem, everyone piles on, stories get shared, frustration grows, and then the meeting ends without a decision. The problem comes back next week, now with friends.
The weekly leadership meeting isn’t about updates. It’s about direction.
When meetings go wrong, it’s usually because they’re trying to do too much at once. Operations, emotions, gossip, training, complaints, scheduling issues, and personal frustrations all get tossed into the same hour. Nothing is resolved. Everyone leaves tired. And the dentist walks back to the operatory, wondering why they bothered. A productive weekly meeting has one job: to help the practice make better decisions next week than it made last week.
Good meetings don’t dwell on problems. They define them. There’s a difference.
Defining a problem means agreeing on what’s actually happening, not how everyone feels about it. Once a problem is clearly defined, it is either assigned to someone with the authority to fix it, or it’s intentionally parked. Nothing lives in limbo.
That’s it.
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Stan Kinder - (703) 298-1690 · 5
THE SECRET WEAPON OF HIGH- PERFORMING DENTAL PRACTICES Servant Leadership:
Start with morale. Most dental teams are overworked, underappreciated, and emotionally exhausted. They absorb patient complaints, insurance frustrations, scheduling nightmares, and daily chaos — often with a smile that hides burnout.
Most dentists were trained to be clinicians, not leaders. But the success of your practice depends far more on your leadership skills than on your hand skills. You can be a brilliant dentist and still run a mediocre, stressful, low-profit practice because your team is disengaged, defensive, or checked out. That’s where servant leadership comes in. At first blush, “servant leadership” sounds like something for church groups, nonprofit boards, or corporate HR retreats — not a competitive dental practice trying to survive PPO pressures, staffing shortages, rising costs, and patient expectations that get higher every year. But here’s the hard truth: In today’s dental market, servant leadership is one of the most powerful profit strategies you can adopt.
An authoritarian dentist sees this as “part of the job.”
A servant leader sees it as their responsibility to improve the environment.
They listen. They remove obstacles. They protect their team from unnecessary drama. They fix broken systems instead of blaming people. When staff feel supported instead of squeezed, productivity rises, turnover drops, and patient experience improves — all of which directly impact profitability. Next comes trust — the most valuable currency in any dental practice. If your team doesn’t trust you, they won’t tell you the truth about what’s really happening in your practice. They won’t flag problems early. They won’t surface bottlenecks. They won’t challenge bad decisions. Servant leaders build trust by owning their mistakes. If a schedule blows up, they don’t hunt for someone to blame. They ask, “What did I miss? How can I help?”
Not because it’s nice. Because it works.
In a traditional dental office, the doctor sits at the top of the hierarchy. Hygienists, assistants, front office staff, and managers support the dentist. The unspoken message is: “I am the revenue generator. You are here to serve me.”
That mindset is exactly backward.
In a servant-led practice, the dentist’s role is to serve the team by providing clarity, support, autonomy, and the tools to do their best work. When the team wins, the practice wins. And when the practice wins, the dentist wins bigger than ever.
That single shift changes everything.
Now consider retention — arguably the No. 1 crisis in dentistry today. Hygienists and assistants are in high demand. Great front office people are rare. Every time you lose a key team member, you lose momentum, morale, and money.
People do not leave good practices. They leave bad bosses. Servant leadership is your best defense against turnover. When people feel respected, valued, and fairly treated, they stay — even when recruiters come calling. Then there’s patient care. In a fearful environment, team members avoid difficult conversations. They don’t advocate strongly for treatment. They rush through appointments. They play it safe. In a servant-led culture, people feel psychologically safe. They speak up about clinical concerns. They support comprehensive care. They communicate better with patients. They take pride in outcomes.
Better culture equals better dentistry.
Better dentistry equals happier patients.
6 · DentalGrowthAndExit.com
... continued from Page 5
Another common failure point is turning meetings into performance reviews. Calling someone out in front of the group feels efficient, but it erodes trust fast. Weekly leadership meetings are not the place for personal correction. When that happens, people stop speaking honestly, and the meeting becomes theater. Private conversations stay private. Group time stays strategic.
What should happen in a strong weekly meeting is simple and surprisingly rare.
First, the meeting starts on time and ends on time. That alone sets a tone. When leadership treats the meeting casually, the team will, too. Second, the conversation stays forward-looking. What matters is what’s coming up, not what already happened. If something went wrong last week, the only relevant question is what will be done differently next week. Third, decisions are made. Not discussed endlessly. Decided. Indecision is the silent killer of momentum. When meetings end without clear decisions, the practice defaults back to old habits. Clear decisions, even imperfect ones, create movement. Movement creates learning. Learning creates improvement. Fourth, ownership is clear. If everyone owns something, no one does. When a task or decision emerges from the meeting, it belongs to one person. That person knows it. Everyone else knows it. No reminders required. One dentist I worked with changed nothing about his practice except how this meeting ran. Same people. Same challenges. Same schedule. The difference was that problems stopped floating around. They either got handled or they disappeared because they were never real problems to begin with. Within a few months, the practice felt lighter. Not because everything was perfect, but because nothing was festering. That’s the hidden power of a good weekly meeting. It prevents small issues from becoming chronic ones.
Happier patients equal more referrals, higher lifetime patient value, and stronger growth. Here’s the multiplier effect most dentists miss: When you lead as a servant, you create leaders around you. Your office manager becomes more confident. Your lead assistant takes more initiative. Your hygienists feel empowered to educate patients rather than just clean teeth. Instead of everything funneling through you, the practice shifts to shared leadership, giving you more freedom, less stress, and greater scalability. Contrast that with ego-driven leadership, where everything depends on the doctor. That practice collapses the moment you step away.
What should not happen in these meetings is just as important.
A servant-led practice thrives even when you’re out of the office.
They should not be used to announce policy changes without discussion. They should not be used to process emotions. They should not be hijacked by whoever talks the loudest. They should not be skipped when things get busy. When meetings only happen in calm times, they fail exactly when they’re needed most. The dentist’s role in this meeting is not to dominate. It’s to protect the structure, keep the conversation from drifting, insist on clarity, and make decisions when the group can’t. Leadership is not about having all the answers. It’s about refusing to let confusion run the practice. When weekly meetings work, they do something subtle but powerful: They move leadership out of the operatory and into the business. Problems stop landing on the dentist by default. The team starts thinking instead of waiting. Accountability feels normal instead of heavy. Most practices don’t need more meetings. They need one meeting that actually works. Run it well, and it becomes the place where chaos goes to die, decisions get made, and the practice quietly gets better, week by week.
Let’s be brutally practical. If your team dreads coming to work, your practice will never reach its full potential. If your team loves working in your practice, you gain a competitive advantage that no marketing strategy can buy. Servant leadership is not about being soft.
It is about being smart.
It is not about losing authority.
It is about increasing influence.
It is not about putting yourself last.
It is about building a system where everyone — including you — wins.
You can rule your practice through fear.
Or you can lead it through service.
One gets you compliance.
The other gets you excellence.
Your production numbers, your profit margin, your patient retention, and your quality of life will tell you which path you chose.
That meeting doesn’t feel exciting. It feels effective. And that’s what fixes most practices.
Stan Kinder - (703) 298-1690 · 7
How Dentists Can Av in Practice Sales and The sale and/or acquisition of a dental or dental specialty practice can be an overwhelming undertaking. The purpose of this article is to highlight common pitfalls that buyers and sellers can, and should, avoid during the transaction process. When these mistakes are avoided, the parties are far more likely to experience a successful transition into the next chapter of their professional journeys. FAILING TO PLAN Selling a business takes time. Dentists who fail to plan for the sale of their practice often miss opportunities with the right buyer. Sellers should maintain current records and keep a sales portfolio readily available. Planning may also include cleaning up old accounts receivable, ensuring associate dentists are bound by appropriate restrictive covenants, and avoiding unfavorable contracts that are difficult to terminate. Buyers and brokers quickly recognize when a seller has prepared, which builds confidence in the transaction and reinforces that desperation does not drive the sale. RUSHING INTO CONTRACTUAL NEGOTIATIONS Before incurring the time and expense of negotiating and drafting a definitive agreement, parties should consider entering into a letter of intent (LOI). An LOI outlines the preliminary terms of the transaction and establishes expectations regarding purchase price, anticipated closing date, payment structure, employment terms, holdbacks, escrows, and other material provisions. While generally nonbinding, LOIs often include binding provisions such as exclusivity and confidentiality. No-shop and exclusivity clauses prevent the parties from pursuing other transactions during negotiations, while confidentiality provisions protect sensitive information. These terms are critical to protecting both parties during the negotiation phase. ENGAGING IN INADEQUATE DUE DILIGENCE A transaction should not close until the buyer is satisfied with the due diligence process. Proper due diligence requires a clear understanding of the practice’s assets and liabilities, along with an inspection of the premises, inventory, financial statements, accounts receivable, employment agreements, leases and contracts, insurance policies and benefit plans, and any required governmental approvals. Buyers should also conduct searches against the seller and its owners to identify liens or claims against practice assets, including judgments, tax liens, lawsuits, or UCC financing statements. LEGAL CORNER LESSONS LE
Stan’s Monthly Rant One of my favorite authors is Dan Kennedy. He’s one of the most profound writers on marketing and business success I’ve ever encountered, and I’ve read hundreds over the years. I wholeheartedly recommend his “No B.S.” book series. The concepts are genuinely life-changing. I also recommend his “No B.S. Magnetic Marketing” newsletter. If you would like to learn more, check out “Direct Response Marketing: Books & Strategies” by Dan Kennedy. In a recent issue of his newsletter, Dan coined a phrase to describe a business owner who was unwilling to heed advice. He described that person as having “one foot in the grave and the other on a banana peel.” That image certainly paints a picture. I know that many, perhaps most, readers of this newsletter will never put a single idea contained here into action. That’s unfortunate. While that does not mean you are headed for your “practice grave,” it does suggest missed opportunity. And that is regrettable. Every practice owner is free to decide what they will or will not do with the recommendations offered here. More important than any specific idea related to practice growth or your eventual exit is this one principle: Be intentional. What do I mean by that? It’s not complicated, just exactly what the words imply. It’s critically important to be deliberate and thoughtful about your practice’s growth and how its terminal value fits into your broader financial and life plans. Your practice can become what you want it to be, but only if you act with intention. Think and act proactively, not reactively. Most people never realize that the choices they make from moment to moment largely determine the circumstances of their lives. Instead, they drift, constantly reacting to external forces. Bottom line: It’s up to you. Success or mediocrity, it’s your choice. The starting point for your journey toward practice success begins with recognizing that your hands are on the wheel. Your intention will determine your direction and destination. Without it, you drift, and there’s no telling where you may end up.
My colleagues and I are here to help in any way we can. I will climb down from the soapbox now.
8 · DentalGrowthAndExit.com
void Mistakes d Acquisitions EARNED:
WAITING TO BEGIN LEASE NEGOTIATIONS A substantial portion of a dental practice’s goodwill is tied to its location. When real estate is not included in the sale, buyers should request a copy of the lease early and initiate discussions with the landlord promptly. Sellers should anticipate the sale and, when appropriate, notify the landlord. In some cases, buyers may benefit from negotiating a new lease directly. In others, assignment of an existing favorable lease may be preferable. In most situations, landlord consent is required, and delays are common. Beginning these discussions early helps prevent unnecessary disruptions to the transaction timeline.
FAILING TO ADDRESS ACCOUNTS RECEIVABLE There are several ways to handle accounts receivable (A/R), including:
• The seller retains the A/R, and the buyer collects it as a courtesy or for a fee.
IGNORING PURCHASE PRICE ALLOCATION In asset transactions, the purchase price must be allocated among asset classes for tax purposes in accordance with IRS guidelines. This allocation directly affects each party’s tax obligations. Sellers typically prefer allocating more value to goodwill, which is taxed at long-term capital gains rates. Buyers often prefer allocating more value to tangible assets, such as equipment, which can be depreciated more quickly. Because sellers have often fully depreciated these assets, higher allocations may result in ordinary income tax treatment. Coordination with an experienced accountant is critical to achieving a tax-efficient allocation. The dental transactions market remains strong, driven by entrepreneurial dentists, practice transitions, DSO and multipractice consolidation, increased efficiency, and favorable financing conditions. With this level of activity, understanding these lessons can help dentists and specialists navigate transactions more effectively and avoid costly missteps. Dentists considering a transaction are encouraged to apply these insights to achieve a smooth, mutually beneficial outcome. Our National Dental Law Group has assisted thousands of dentists and dental specialists with practice transactions. Contact us today for more information.
• The seller retains and collects the A/R independently.
• The buyer pays additional consideration and collects and retains the A/R post-closing.
• The purchase price includes the value of the A/R, which the buyer collects and retains after closing.
Buyers should identify early the amount and aging of the seller’s A/R. If the seller retains the A/R, the parties must determine how incoming payments will be applied. If the seller continues collecting post-closing, buyers should consider the impact of collection practices on goodwill. Because of the variables involved, failing to clearly address A/R in the purchase agreement exposes both parties to future disputes. OVERLOOKING RESTRICTIVE COVENANTS Understanding the seller’s post-closing plans is essential. Will the seller retire or pursue another venture? These details inform the negotiation of reasonable and enforceable restrictive covenants and help prevent misunderstandings that can lead to disputes or litigation. Sellers typically receive significant consideration for their practice, while buyers acquire goodwill and often assume substantial debt. As a result, it is generally reasonable for sellers to agree to meaningful post-closing restrictions on time and geography.
Editor’s Note: Dental transactions come in many forms, and understanding how money is structured, when it’s paid, how it’s paid, and what risks are involved, can make a meaningful difference in the outcome of a deal. In this month’s Legal Corner, the dental law team at Mandelbaum Barrett outlines the most common transaction structures and the financial terms every dentist should understand before moving forward.
Stan Kinder - (703) 298-1690 · 9
THE POSITIV NEGATIVE PR
There is the negotiation and sale you intended (or hoped) to have, the one you actually had, and the one you wished you’d had 3–12 months afterward. Success rarely moves in a straight line, so a serious conversation
patients who love you, so your practice’s “goodwill value” is above par, prove it with retention, hygiene frequency, patients upgrading from short-term fixes to full transformations, and referral statistics. Show the endless chain of referrals from each patient. Show the SYSTEM you have for high patient enthusiasm: your post-treatment concern call script, your new patient welcome “wow” box, your monthly print newsletter, birthday recognition, and so on, all in place, ready and easy for your buyer to step into and operate. Emphasize that all the software, vendors, and suppliers are trained and in place, ready to do the buyer’s bidding. BE INSULT-IMMUNE. DON’T TAKE IT PERSONALLY. DON’T LET YOUR EMOTIONS DISTRACT YOU FROM YOUR MISSION. Be especially ready for the tough questions. Your re-cast financials identifying the salary and expenses the practice pays for a “no work job” for your son, daughter, or mistress. A past complaint to the state board or bad Yelp reviews. A big slump in revenue for three months a year or two ago. How much of the practice depends on you, so, uh-oh, what happens when you’re gone? That last one is a question I’ve had to deal with several times as the business I built and around me was sold. It was kind of like Disney removing the live characters from the parks — what, no Mickey? No princesses? I knew it would be raised, so I raised it first. I knew it would be a cause of anxiety, so I had a multipoint reassurance. Because I was well prepared, it quickly became a non-issue. In fact, I successfully argued that the cure for it added value. A tough question is only that, not necessarily an insult or criticism. And even if it is that, so what? You can insult me as long as you spell Kennedy with two n’s and a y on the check. Your task is to anticipate every possible question you might be asked, so you are never caught by surprise or made to look unsure of yourself. You don’t want to merely be glib, either. You cannot dismiss their concerns. You need relevant facts for an acceptable answer. Question: Your fees seem frankly exorbitant, and I doubt they can be sustained. The fact that you’ve been closing cases and adding new patients at those exorbitant fees is not enough. How is it that you are able to consistently secure higher fees than most? How are your fees presented? What tools are used, like beautiful before-and-after and testimonial books? Have you had celebrity or famous patients in town? I recently reworked an old, classic ad headline for a dental specialist: Where Do Dentists Go For <Specials>? If, on the other hand, I say (or might silently think) your fees are too low but wonder whether they can be raised, how can you reassure me on that count? IT’S NOT JUST MATH — AT LEAST, DON’T LET IT BE Many dentists, many buyers, and, frankly, even many brokers want this to be just about math. Gross, EBITDA, a few other stats, standard multiple, bingo: Price, then subtract for things that can be found to chip away at it. It’s a
with a possible buyer will often start well but then begin zig-zagging, with strange detours, more information required again and again, and by the end, the buyer’s case for a much lower valuation and selling price than was originally, tentatively agreed to. The more time you invest in moving the deal forward, the more eager you become to “win” by getting it across the goal line, so the more concessions you are willing to make. This happens routinely. Skilled deal-makers know all this, and a lot more, about the process, the rabbits found and pulled out of holes that change the equation, the weary seller extremely reluctant to walk away from the deal “almost done” to start all over again with a new potential buyer, so the seller agrees to concessions on price or terms or both. Good divorce attorneys dealing with affluent couples’ separation know and use all these same methods. In business deal-making, “normal and customary due diligence” is a euphemism for digging for gold, something to get concessions with. If you have a lot of nice things throughout your home, including on low shelves, and somebody is coming to visit with unruly kids, you can’t fix the kids. You can only prepare your home to survive them. You put some things up high, you lock other things away. You think “negatively” about what those kids might get into, bump into, or knock over, so you can prepare smartly. The same thing is true here. Most buyers and their agents and their deal-killing lawyers are going to, from your perspective, behave badly. You can’t fix them. But you can prepare for their shenanigans. BE YOUR OWN WORST ENEMY FOR A WEEKEND, WITH YELLOW LEGAL PAD AND PEN The defense against the finding of problems, flaws, questionable items, and every other piece of dirty laundry hidden in drawers of your practice is to find it all first. Prepare to have it raised. If possible, preempt it from being raised. But do not allow yourself to be surprised or to be dragged along lowly, one “negative” raised after another. Do not live in denial, thinking: ‘What could anybody possibly dislike or question or be critical of or turned off by in MY utopian practice or my impressive financials?’ Every deal made is imperfect. Every practice sold has some fleas. Sit on the other side of the table. Be a fearful, anxious potential buyer. Be a skilled financial and business detective. Nit-pick every fact, figure, claim, and assertion about the practice’s history, present condition, and future forecast. Do it until you are exhausted. Rest. Resume. Be the cynic who, if just told the sky is blue, says: Prove it. If you assert that you have a sizable herd of loyal
10 · DentalGrowthAndExit.com
VE POWER OF REPARATION
common way to play the game, but are you common? You only get one shot at getting this right. This is where imagination came in. Walt Disney said, “There is no shortage of money — only of imagination.” I just read portions of a client’s draft copy for a presentation to sell his practice. It has three pages of an almost poetic ode to his wonderful patients. He describes who they are, their values, how appreciative and respectful they are, and how well they refer. Another few pages extol the virtues of living in the area where the practice is located. The distance to a major city and its airport without city life; happy, calm suburban/semi-rural life; small town community; and good schools, even down to its surprising “restaurant row” with great variety. It says: Now you can live where people come to vacation, it’s so great here! Of course, the buyer might fear that small town equals small opportunity, so there’s a map of the big area around the practice stretching all the way to the big city, with dots placed where every patient in the past 12 months lives. It shows people coming from surprising distances, with reasons stated. This is all about what we ad guys sometimes call “romancing the stone,” in tribute to the diamond industry: selling dirt and gravel mined by the ton, setting its worth by a made-up measurement, and setting the price at a year’s salary. Mr. Gamble of Procter & Gamble said, “Any idiot can make soap. It takes a genius to sell it.” He’s right. Any idiot can do the math. It’s better for you to infuse imagination and genius to romance the stone. Almost everything has a price range, not a governing price formula. A new 4WD SUV — from $30,000 to $150,000. Pick a product or service, including yours, and you may find a pricing formula exists, but you’ll find a wide range of deviation from it. So it is with a business or practice for sale. Remember that you are selling your life’s work, turning off your earned income faucet, and exiting. You must get paid as well as you possibly can. And it’s not a bad haircut. It can’t be fixed. For an interesting example of romancing the stone in an ordinary business, read my series of Giorgio letters in “The Ultimate Sales Letter” book. The book is also a useful guide for assembling your presentation of your business for sale.
get excited to buy. A brilliantly painted, beautiful, inspiring picture with them in it is a way of doing this. There is a terrific TV ad for Valencia retirement communities in Florida that has a couple, your stand-ins, walking around,
experiencing it all, saying to each other: Can you SEE us living here? Can your potential buyer SEE himself owning and operating your practice? See it become his? Because completing a sale can take time, with due diligence and negotiation over weeks to months, the buyer’s excitement and desire must be kept hot. A great new patient signs for a big treatment plan — share that good news with your potential buyer. The local art galleries are hosting an “Art Walk” — invite your buyer to join you. Make sure he’s getting your local community newspaper, ideally with your best ad in it. Get him and his spouse “into” the community. (This is how retirement communities sell; they invite prospects to participate as if residents for 30 to 90 days.) You might also let him shadow you for a day in your practice, one you know will be busy and interesting.
Thorough preparation gives you confidence and instills confidence that can be transferred to the buyer. —Dan S. Kennedy
Dan S. Kennedy is a much sought after direct marketing strategy consultant and copywriter, helping build brands and businesses like Perfect Smile® and Proactiv®, America’s #1 acne treatment, MiracleEar®, and Medicare Express. He is the author of the bestselling series of “NO B.S.” books, including the most recent “No B.S. Guide to Succeeding In Business by Breaking ALL The Rules.” As a speaker, his long career includes nine years on the largest public seminar tour in America, alongside four former U.S. presidents, countless Hollywood and sports celebrities, great marketing founder-CEOs like Debbi Fields (Mrs. Fields Cookies) and Jim McCann (1-800-Flowers), and legendary speakers including Zig Ziglar, Brian Tracy, Jim Rohn, and Tom Hopkins. His own seminar events have featured celebrity-entrepreneurs like Gene Simmons (KISS), Joan Rivers, George Foreman, and Kathy Ireland. The entrepreneurs’ organization he founded can be looked in on at MagneticMarketing.com. Over 30,000 dentists, chiropractors, and other health care professionals have been in his audiences.
Consider this example:
Imagine your pride and your family’s and staff’s pride at owning THE crown jewel of practices in the area, with its well-established brand and reputation. And imagine coming home at day’s or week’s end NOT exhausted or irritable, because of the sterling quality of its grateful and respectful patients. Imagine being a popular “king” of your small town but with a big city market area and a big income. Few practices can deliver on such thoughts. TELL ME A STORY AND MAKE ME ITS HERO My old speaking colleague, the late, great Zig Ziglar, taught that selling is more a transference of feeling than a presentation of facts. People need to
Stan Kinder - (703) 298-1690 · 11
Practice Culture, Your North Star
Your practice is analogous to a ship in the middle of a great ocean, with the captain and crew making decisions every day, setting the speed and direction to ensure a safe arrival at the desired destination. That metaphor isn’t just poetic; it’s operationally precise. In a dental practice, culture is the North Star. It doesn’t replace strategy, systems, or financial discipline, but it quietly governs how they show up in the real world. When conditions are calm, culture can feel invisible. When the seas get rough — and they always do — it becomes the deciding factor between drifting off course and arriving exactly where you intended. Too many practice owners think of culture as a “soft” concept: team morale, happy lunches, or whether people seem to get along. In reality, culture is a hard-edged performance driver. It’s the sum total of what you tolerate, what you reward, and what you consistently reinforce. Culture answers the unspoken questions every team member asks: What really matters here? What gets me ahead? What gets ignored? In high-performing dental practices, culture starts with clarity. The owner has a clear picture of the destination — clinically, financially, and personally. Growth for growth’s sake isn’t enough. Neither is vague talk of “better balance” or “less stress.” The team can’t row in the same direction if the captain hasn’t picked a port. When the vision is specific and repeated often, culture begins to align around it. From there, culture shows up in daily decisions. How are schedules protected — or sacrificed — when production pressure mounts? How are patient complaints handled when they conflict with policy? How does leadership respond when a high producer undermines the team, or when a loyal team member struggles to perform? These moments, not the mission statement on the wall, are where culture is forged. One of the most overlooked aspects of practice culture is consistency. Teams don’t need perfection, but they do need predictability. If expectations change based on mood, stress level, or last month’s numbers, trust erodes
transition, culture determines whether growth creates leverage or chaos. A strong culture attracts the right people, repels the wrong ones, and reduces the drag caused by constant turnover. A weak or undefined culture does the opposite: It amplifies every operational problem and makes scale feel heavier, not lighter. Most importantly, culture is not static. It either evolves intentionally or degrades by default. External pressures — staff shortages, insurance compression, rising costs, private equity interest — will test it relentlessly. Practices that weather these pressures well are not the ones with the fanciest dashboards or the newest technology. They are the ones with a clear North Star and the discipline to navigate by it, even when the shortcut looks tempting. One where the owner and team establish clear standards and live them with every patient, every day. For practice owners, the takeaway is straightforward but not easy: If you want different results, start by examining the culture you’re actively creating. Look at your calendar, your compensation models, your tolerance for mediocrity, and your willingness to have uncomfortable conversations. Culture doesn’t respond to slogans. It responds to behavior. In the end, your practice will arrive somewhere. That much is guaranteed. Whether it’s the destination you actually want depends on whether culture is an afterthought or the North Star guiding every decision along the way.
quickly. Inconsistent leadership creates a reactive culture, one where people play defense, avoid accountability, and wait to be told what to do next. Consistent leadership, even when it’s demanding, creates safety. And safety is what allows teams to perform at a high level without burning out.
Culture also acts as a filter for growth. As practices add providers, expand locations, or prepare for an eventual
12 · DentalGrowthAndExit.com
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