Shifts in the dental practice market have made it harder for dental practice owners to attract potential buyers. This blog post will explore the potential reasons for seeing fewer buyers today. We’ll also provide strategies to help mitigate these challenges and attract potential buyers.
The Current State of the Dental Practice Buyer Market
According to Dental Economics, the US dental industry is expected to see over $15B in revenue growth by 2027 as demand for dental services continues. In theory, this should drive more dentists to purchase their own practices to meet patient needs, but where are the buyers?
Several factors could play a role in dentists’ investment decisions, including changes in demographics as well as economic factors like inflation year-over-year. In 2022, the ADA Health Policy Institute polled US dentists on challenges faced in the current market, citing inflation and staffing as the largest.
Declining Buyer Interest
There is no question that the number of interested buyers for dental practices has dropped in the past several years. A search for the query “dental practice for sale” is seeing a downward trend since 2015.
Where Have the Buyers Gone?
Increased competition from corporate dental practices and group practices makes it more challenging for solo practice owners to compete. Changing consumer behavior, such as the rise of online reviews, has also made reputation management increasingly important. Additionally, economic factors such as rising inflation and high levels of student debt among younger dentists make it more challenging to take on the financial risk of owning a dental practice.
What is the Reason for this Trend?
FEAR is my explanation for this phenomenon. Young buyers are fearful of the current economics of dentistry. They have massive debt from dental school, sometimes approaching $500K. They are concerned about buying a dental practice and having Delta Dental change their fee schedule if they are considering a traditional practice model. They may look at corporate dentistry as a safer option.
Corporate Dentistry vs. Private Practice
Corporate dentistry and DSOs are going into the dental schools and recruiting most of these young dentists before they even graduate. They take the fear out of the equation and offer a stable income. A corporate dentistry salary guarantees income and can ensure that school debts get paid off.
This is a great idea for the first year or two following dental school, but the new grads don’t seem to realize that once they garner their speed and confidence, they can take home almost double their income if they produced the same amount of dentistry in their own practice!
The truth is that the best way to pay off your debt is to own your own successful dental practice! Owners are supposed to make a profit from owning a business. Of course, it has to be a well-run business with a decent patient base.
Strategies for Attracting Buyers
Despite the challenges of the current market, there are strategies that dental practice owners can employ to attract potential buyers.
- Hire a professional dental practice broker who can help you navigate both the selling and buying process and market your practice.
- Build a strong brand and reputation to help you stand out in a crowded market.
- Develop a diverse patient base to help weather changes.
- Create a culture of excellence and teamwork to increase patient satisfaction.
- Stay up to date with the latest technology and industry trends to make your dental practice more attractive to potential buyers.
Tip for Young Dentists
Owning a dental practice comes with responsibility and risk, but a positive return, if done right, is inevitable. Come back to private practice once you get a couple of years of experience! The best part of dentistry is being your own boss, owning your own business, and calling your own shots!
Conclusion
In conclusion, the current dental practice market comes with various challenges. With fewer buyers, it’s essential to take steps to make your practice more attractive. By building a strong brand and reputation, developing a diverse patient base, creating a culture of excellence and teamwork, staying up to date with the latest technology, and partnering with a professional dental practice broker, you can increase your chances of success and help speed up the process of selling your dental practice.
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