EBIDTA 101: Understanding the Key Calculation in a Practice Sale – Episode #452

With the rise of DSOs and the increasing number of practices being bought and sold, you’ve heard the term EBIDTA. What is it? How is it calculated? And most importantly, what discrepancies can alter the formula at the time of a sale? On this Dentist Money™ Show, Ryan and David Haynes, of Menlo Dental Transitions, talk about why EBIDTA serves as only a starting point for a practice sale.

 

 

 

 

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Podcast Transcript

Ryan Isaac:
Hello everybody, welcome back to another episode of The Dentist Money Show, where we help dentists make smart financial decisions, brought to you by Dentist Advisors, a no commission fee-only fiduciary comprehensive financial advisors, so many words, just for dentists all over the country. Check us out at dentistadvisors.com.

Ryan Isaac:
Today on the show I have David from Menlo Transitions. We’re talking about DSO sales, private buyer sales. We’re talking about common mistakes, calculating EBITDA, looking at a P&L, things to ask a broker, when it’s time, when it’s not time, common regrets. Great conversation about selling and transitions, and kind of the landscape, interest rates, financing, all that kind of stuff. He has a great background, Menlo, a lot of smart people there. So David, thanks for spending time with us. If you have questions for us, go to dentistadvisors.com, click the book free consultation link, let’s have a chat. We love pointing you in the right direction, and answering your money questions. Thanks for being here everybody, enjoy the show.

Announcer:
Consult an advisor or conduct your own due diligence when making financial decisions. General principles discussed during this program do not constitute personal advice. This program is furnished by Dentist Advisors, a registered investment advisor. This is Dentist Money, now here’s your host Ryan Isaac.

Ryan Isaac:
Let’s start with, I’m always curious how people can introduce themselves. I think our show and listeners of our show are pretty familiar with our friends at Menlo over many, many, years together. But how about give us a quick intro, who are you? Who is Menlo? And how did you get involved with Menlo? How did you get started in all this? I always find that pretty fascinating.

David Haynes:
Yeah, so Menlo is a full service commercial real estate brokerage with property management. We do startups, project, we’ll help through a startup project. And then probably eight years ago, nine years ago, we started the transition side of things, focused on dental. So, Menlo Dental Transitions was born after the commercial real estate group, but we have in total, if I had to guess, Menlo has maybe 30 associates in different capacities, most of which are on the commercial real estate side of things. I found my way into the dental lending business and started transacting with Menlo on, at First Citizens Bank. That’s where I came from. And did well there. Pretty much focused exclusively on dental and that’s ultimately how I made my way over to the firm.

Ryan Isaac:
Yeah, yeah man. I can’t believe it’s been eight years, eight or nine years on the transitions side. Holy cow.

David Haynes:
Yeah, something like that. Yeah.

Ryan Isaac:
Shout out to Tanner, Rich, and Matt.

David Haynes:
Yeah.

Ryan Isaac:
I didn’t know it’s been that long. That’s kind of crazy, man. Time flies. That’s really cool.

David Haynes:
Yeah. I’ve been here for a couple of years, and even that has gone by pretty quickly. But the lending experience was awesome for me. It gave me a great foundation and got to see a lot of stuff, so.

Ryan Isaac:
I think one question people would love to hear about given that you have experiencing these two backgrounds is just the current, I mean, we’re recording this in late October, 2023, for those who listen later on. Can you give any insight or any just thoughts or commentary on rates just seemed like they keep going up. We don’t know how that’s gonna play out when it will stall, drop. Since you now see both sides of like the rate side, the banking side, the lending side, and now the transition and ownership side. Any thoughts or commentary on just what’s going on right now, and how that feels and plays out for everyone in the market?

David Haynes:
Yeah, so rates are interesting right now. We have, a lot of banks like to price off of the 10 year treasury. And so whatever that’s doing, you can pretty much expect some spread above that for your loan rate on a 10 year loan. So 10 year treasury, most dental loans are 10 years, if you go 15 or 20, it’s gonna change that. But the 10 year treasury just hit a recent high, it peaked above 5%, and it’s gone down just a teeny bit. But then it’s been right in that territory in the last few days. My experience is that 10 year loans, were buying an asset, dental practice is an asset that makes money. And on a 10 year loan, such a short amortization, a move in rates, even though it’s a dramatic move that we’ve seen over the last couple of years down to near zero, which near zero, when they say zero rates, I mean, it’s really the lowest it effectively gets is like 2.5 or 3% on a dental loan, right?

David Haynes:
Like that’s the lowest we saw it. So the move up to now we’re in the sixes, maybe some are gonna start seeing sevens, soon with the recent move in the 10 year. I spoke with somebody yesterday, they said, “Ooh man I don’t know if I’m gonna buy.” It’s like, it doesn’t really, for a business owner, it doesn’t make that big of a difference on a 10 year loan. Even though if you’re borrowing a million dollars, 10 year loan, and you look at that difference in rates, yeah, it’s more money, you’re gonna spend an interest expense, but it’s not crippling. You can still buy something, you can still take action. And if you were to look at the housing market or other sectors, right, it’s more crippling to people financing on a much longer term amortization, and especially with an asset that doesn’t make them money.

David Haynes:
So, yes it’s, if you look at what happened in the ’80s, the 10 year treasury got way up there, I mean, well past 10% at different times. So if we get up into those territories, sure, that could be more impactful. It has slowed things down maybe just a teeny bit, but not, it’s not crippling to buyers at this stage.

Ryan Isaac:
Yeah, I think that’s good advice, man. I mean, we’re still talking about an asset, the dental practice, that has not only, there’s just so many good things about running a dental business. The potential for high revenue, obviously, profit margins in the dental space, even though they are being squeezed a lot over the last couple of years, it’s just how expensive everything is. There’s still margins that are I mean, people in other industries kind of just laugh like it’s not even real to have the kind of margins dentists do. And the availability of capital.

Ryan Isaac:
We were just talking about this at a practice management conference I spoke at last week in Arizona, actually, about just how unique the dental, the field of dentistry is, just because of the access to capital. Most industries, you can’t get that much money that quickly, that easily and on such good terms. And most of the time it’s got to be like private financing if you want that much money. And so it’s just such an interesting… And then there’s this whole career with such long decades long longevity. I still think it’s extremely worth it and borrowing money, it hurts more than it did, but like I was just pulling up my calculator when you were giving those examples and you know the difference is $1,500 or so.

David Haynes:
Over what time period?

Ryan Isaac:
Over a 10-year, a million dollars, a spread of 4% or 7%. I mean maybe a couple thousand dollars in monthly payment, but for a business that’s doing, that can do multiple seven figures, it’s just to me the growth is still worth investing in. And not waiting on or not trying to pull away for cash or so. I appreciate that insight.

David Haynes:
It’s hard to time the market too. I mean, I hear this a lot where folks will say, “Hey, well, let’s, I’m gonna wait and let the market settle down.” I mean, it’s impossible… I’m not an economist. I don’t know, but it’s impossible to time and predict the market. We don’t know how long rates are going to be at this level, or if they’re going to double from here, right? I mean, like, people seem to think that there’s some ceiling on rates and that they’ll come down. So it’s really hard to say. But at this point, if it’s a good practice, I don’t see any reason to hesitate making the purchase if it’s something you wanna do.

Ryan Isaac:
Yeah. Cool. So here’s a pretty common question that’s probably really basic to you, but in the world of buying practices or selling practices these days, it feels like there’s so many different avenues. Can you explain like what type of broker are you? I know you can represent sellers, you can represent buyers, and then there’s the whole like corporate DSO group world. Can you talk about maybe the difference of what those differences are in your field?

David Haynes:
Yeah, so I primarily represent sellers, or practice owners. And my goal is to help them navigate whatever the best exit option is, I’m there to do that. And so it could be a DSO sale, it could be an individual sale. A lot of the conversations that we have are centered around some of those differences and what makes the most sense for them, given their age, the size of their practice. So by volume, in terms of the number of practices, by far and away owner-user sales are our biggest, I mean, that’s the biggest driver in terms of the number of transactions. DSO sales, just because they’re larger represents a significant portion of our volume on a dollar basis. So, quite much fewer practices going through that pipeline. But our goal is to kind of help them navigate that process. We will assist buyers along the way if they need attorney introductions or lender introductions or whatever it is. If they need some resources to get to the next step, we will assist buyers along that path, but we typically don’t represent buyers formally. There’s other folks that do that within the business on a more formal basis.

Ryan Isaac:
A question we get all the time is, how does someone pick a broker? How do you choose one? Is there a list of questions in your mind that are smart things to ask. Let’s say if you are an owner and you’re looking to sell to somebody, is there like a list of vetting questions that’s really smart to go through with somebody?

David Haynes:
Yeah, we actually have some of these published on our website because we look…

Ryan Isaac:
Where’s that at, by the way? What’s the website, real fast?

David Haynes:
It’s menlotransitions.com.

Ryan Isaac:
OK, we’ll figure it out. We’ll put it in the comments.

David Haynes:
Yeah, there’s a buyer section there. And it says, questions to ask a broker. One of the things that surprises me, almost nobody asks to see a presentation prior to signing a listing agreement. And when I worked at the bank, I can tell you there’s a huge difference, there’s huge variation, in terms of how the broker presents the information that’s provided to them. And we kind of pride ourselves on doing a very thorough job. It’s a clean… It’s a prospectus is what we’re building, is what we call it. And the prospectus is really meant to be a document that helps sell the practice and inform all the relevant parties, the lender, the attorney, the account, whoever’s involved in the transaction. But it’s also meant to be kind of a marketing piece. So sometimes, as a lender, I would see these, I would see tons of data and information that was relevant, but it just wasn’t very pretty and clean. And so it surprises me that people don’t ask to see that document or a sample perspire, I have to offer it up to differentiate ourselves.

David Haynes:
So it’s really funny. Sellers don’t generally ask me that question. I find that next to that, the best thing that can be done is talk to referrals. Most of our business is referral driven anyways. But if you’re coming across a brand new broker and you don’t know where to start, ask them for referrals. Then you’re gonna get a sense as to how many transactions they’re doing, what those transactions are like. And there’s no reason why as a seller or a practice owner you shouldn’t be able to talk to somebody that just went through the process with that same broker. Because if they’re active in the marketplace, they should be able to provide that. Those are, there’s a lot of things that you could do, but if you can do just those two things, you’re gonna cover a lot of ground.

Ryan Isaac:
Cool. So a couple of questions on that. What should someone expect in, you say a prospectus or a presentation like, what’s typically in something like that? What should somebody expect from like a reputable broker?

David Haynes:
So at least aesthetically [0:11:56.3] ____ or from the marketing side of things, we’d like to have thorough pictures. We want somebody to be able to get a sense as to how the office looks and feels. There should be an equipment list. As far as data is concerned, we should have information on the types of procedures being performed. What’s the payor mix like? We want to be able to see concisely what the revenue trend is like over time. We want to see staff information. We like to do an adjusted financial, we call it spread. Sorry, that light behind me is kind of like…

Ryan Isaac:
It’s all good. It’s great, you look shiny.

David Haynes:
Yeah, the Halo thing. So we like to do an adjusted, we do adjusted financial. So we’ll take your P&L or tax returns, depending on the situation. Most times if it’s an owner-user deal, it’s gonna be tax returns. DSO deals are gonna be income statements on a trailing 12 month basis. We’ll take those numbers, we’ll put it into a common format. And we’ll common size them with percentages and then we’ll add adjustments. We’ll try and extract the things that just aren’t relevant to the future buyer. And the goal is to present what, for an owner-user, what would owner-user, owner discretionary cashflow. We wanna show that buyer what their owner discretionary cashflow would be. Now we might disagree on some of the adjustments, right? Like not everybody sees adjustments the same way, especially CPA. CPA sometimes look at adjustments a little differently with the bank. The bank might not take some of those adjustments.

David Haynes:
But the goal is to show what’s the owner going to take home. And so that’s an emphasis that we spend a lot of time on that analysis. And then for a DSO, it’s a similar analysis. Every group analyzes cash flow a little bit differently. We have to adjust for salaries if you over or underpay yourself. We have to do a number of different things. There’s some things that just aren’t applicable to DSOs, like accounting fees and stuff like that. So we wanna adjust according to whoever the buyer is, the appropriate buyer. And then in that situation, we’re gonna try and figure out EBITDA. So if, [0:13:55.5] ____ we’re talking about EBITDA analysis, that’s what we’re trying to achieve is post-doctor comp EBITDA is the objective when we’re going through that DSO analysis.

Ryan Isaac:
Post-doctor comp EBITDA. Okay, so these are things we throw around a lot, any of us who are kind of nerdy and look at P&Ls all day for a living. But I don’t know if it’s surprising or not, but a lot of dentists, even very savvy, successful people just aren’t really clear on what EBITDA is really meaning. They feel like maybe sometimes there is a huge discrepancy of what one group might call EBITDA versus another buyer might call EBITDA. Can you run through like a simple explanation of EBITDA? Where there might be discrepancies based on how different people might look at it?

David Haynes:
So owner discretionary cashflow and the EBITDA usually start at the same place. It’s going to start at net income and we start adding things back. Things that might not be relevant to the buyer, such as…

Ryan Isaac:
Sorry, real fast, is that normal to add things back to, by the way? Or are there some buyers or groups that might not add anything back? Just look at pure bottom line net income and call that done.

David Haynes:
A 100% of the time we’re gonna add things back. Every single transaction has adjustments that need to be made. And if you own your real estate, so this is one that a lot of people miss. They’ll say, “I got a good offer from a group.” And I’ll get back to your questions just in a second, but I [0:15:16.0] ____ say, “I got a good offer from a group.” And my first question is, “Okay, do you own your real estate?” Yes. How did they analyze your lease? Because that affects owner discretionary cash flow, EBITDA, everything. And sometimes if somebody just receives an unsolicited offer, they don’t really know what’s baked into that offer, if it’s good or if it’s not. The number might be impressive, but we don’t know if there’s anything being left on the table.

David Haynes:
But what we do is we start with that income and we start and we add things back that are not applicable. So it’s gonna be non-cash items, amortization, depreciation, interest all debt. Most transactions are on a debt-free basis, so they’re gonna sell. There’s not gonna be any debt post-closing, everything is getting paid off. So we’re gonna add back any interest expense. If there’s lease adjustments, we’re gonna adjust for the lease. If you own your real estate, this is a huge issue that a lot of people just miss entirely. If you own the real estate, we have to adjust for a market lease.

David Haynes:
So we’re gonna go through all of those different adjustments to arrive at EBITDA. If you go to Investopedia, you can look up EBITDA, it’s earnings before interest taxes, depreciation, everything, there’s a definition for it out there. But it’s not, EBITDA gets distorted. That number gets changed a little bit. The definition of it gets altered by the groups, depending on what they consider to be EBITDA. And a lot of it depends on the level of support that a group offers. So it’s really just, it’s a starting place. If you go to the Investopedia and you take the net income and then you add back some of those non-cash items, that’s a starting point. But every deal we do has adjustments, whether it be an owner-user deal or a DSO deal, no question.

Ryan Isaac:
I was gonna ask you common mistakes you see when people are going through this process. Let’s just stick to the seller side, and thinking about listing for the first time, thinking about making that career transition, whether they’re mid career or end of career. What other kind of common mistakes are you seeing out there right now that you’d love to talk about or correct.

David Haynes:
I think the, one thing that is difficult for a seller to see is if they’ve engaged a professional to help them through this process, what is the scope of that individual? So sometimes they’ve received offers directly from groups. Sometimes they’ll engage a certain type of representative to kind of help them through the sale process. But the question is, can that person give them, offer them, the full scope of what is available to them? So some, for example, some brokers are pretty strictly focused on DSO sales. And I’ve done two deals this year where we went and got DSO offers. The seller was not comfortable. Proceeding down that road in the end, and this is after some serious due diligence and we ended up going with an owner-user.

David Haynes:
So we were able to take their situation and pivot another direction that just made more sense to them, and their situation. So the key, I think, from a seller standpoint is when you, it’s important to engage a professional. It’s hard to interpret these offers. It’s hard to know what’s best For you out there. What’s a fair deal? What’s not a fair deal? Especially in th DSO world. And so having some professional help from somebody that can look at multiple avenues and give you some guidance that’s unbiased is, I think, important.

David Haynes:
The other thing is, there’s so many things that come into play for a seller, not waiting too long. That’s probably mistake number one that I see is, they wait too long to practice in some amount of decline, or they’re too old to qualify for a DSO sale. Most groups want you to be around for a long time. So I like it when people are in a position of strength. And if we can sell from a position of strength where we have multiple options in front of us, it’s so much better, we can create such a better competitive environment amongst buyers.

David Haynes:
Your books, if your books aren’t clean, if you’re doing anything that’s a little bit… For example, I have one guy that was billing, he had a couple of associates, all of them billed under one person, and so it’s like you can’t… That kind of stuff, if you’re gonna go to a sale, you got to clean those things up. I spoke with somebody recently that has a pretty… There’s a huge difference between how much cash they report on taxes and how much cash is shown on the production reports. It’s not uncommon for us to see people pocketing some cash, I’m not the IRS, it’s just something we see out there, but that kind of thing. You can’t get value for something you don’t report to the IRS. So just like, clean things up, make sure you give yourself some options, it’s really difficult to sell when we’re in a major decline, if the books aren’t clean, those are all things. It’s sellable, it’s just harder for us to do a really, really good job.

Ryan Isaac:
Okay, let’s stay on the DSO topic, it’s just so top of mind, in our firm we’re probably having a conversation per day about some offer or some choice to do this. I’m sure you’ve seen a lot of people go through the DSO process, selling to one, we’ll just stick with the seller side. Do you have any feedback or maybe just some observations on who have you seen be happy with a DSO sale? Are there any common threads for people who end up saying no eventually. You said you were pretty far down the road with someone who eventually declined. I had a client with a gigantic offer from who declined the morning of the closing call. And so I’ve been surprised by that and any commentary on people who just flat out turn it down, are there any common threads here, anything that could be helpful to people?

David Haynes:
You know, people are skeptical, a lot of owners are skeptical, they don’t want to have a boss that’s too heavy-handed or a group that’s gonna come in and start to dictate too many things. Some people need or want that, but it’s more common that they just… Their numbers are good, but they start to look at the analysis of, “Well, if I just held my practice for two or three or four more years and cash float it, does it just makes sense for me to continue doing what I’m doing or sell to a DSO? I think the situations that make the most sense are when you have a lot of concentration, if a lot of your wealth is concentrated in the practice and the real estate that you own, I like the idea, the part of DSO sales that makes sense to me. I like the idea of taking chips off the table, you’re able to liquidate a portion of that, you’re able to put a good tenant in place in a lot of instances, and it just makes sense when it comes to diversifying your own net worth, if you will, you’re able to liquidate and take a few chips off the table. The bigger the practice is, the more the DSO sale makes sense.

David Haynes:
If I kind of see an imaginary cut-off somewhere in that 2 million range. If you have $2 million in revenue and above, DSO sales start to make a lot of sense financially, and if you’re over 3 million in revenue, it’s almost impossible, assuming you have decent cash flow, it’s almost impossible for an owner-user to compete with that offer. Like the gap between an owner-user offer and a DSO offer is gonna be substantial at that point. If you’re in the in-between area is like folks that are collecting between 1.5 and let’s say 2 million, it might make sense to sell to a DSO there. But the gap between that owner-user offer and the DSO offer is gonna be a little bit more narrow. So it’s a question of, Why are we doing this? Does it makes sense to do it for some other reason? I have some people that run great practices, but they leave a lot of money on the table. They have huge hygiene [0:23:10.2] ____ numbers, they have a lot of ops. There’s more that can be done in the practice, if they were to hire associates and do things. And in those situations, it makes sense to engage a DSO to help you grow, and you can participate in some of that growth and take some chips off at the same time, and maybe keep some ownership. Does that answer your question? Does that help them?

Ryan Isaac:
Yeah, totally. Is there anything on the non-financial side, maybe the personality side, the time of life, I find my anecdotal experiences, people even with big offers in big practices they get a chance to sell, but they’re still really early career, mid-career, like let’s say early to maybe mid-40s, they just struggle with that idea, because they’re like, I’m gonna be in this for 15 more years, maybe 10 more years, and if I just held this thing it’s, I’m gonna recoup all this money and it’s mine in the end anyway. Anything you wanna say about the non-financial side of someone’s motivations for selling or not selling?

David Haynes:
Well, I will say that there seems to be a wave… And I guess I’ll answer maybe a little bit financially first, but it seems to be right now there is… There are really strong offers out there, and I believe, I’m of the opinion that at some point once these groups reach a level of saturation within the marketplace, those offers are gonna soften. Now, they still might be able to get a second bite of the apple at recapitalization events and things like that. There is maybe other cash flow events in the future after you’ve initially engaged with the DSO. But those initial offers, as we reach a critical point of saturation, and I don’t know what that number is, but I think we’re… I don’t know. I don’t know that it’s too, too far off that we’ll start to see these groups say, “Hey, I don’t need to pay top dollar because we’re growing organically, we have the de novo operation, we have enough saturation at these market places where we don’t need to practice a mile down the road or whatever it is.”

David Haynes:
So if somebody is thinking about delaying and they’ve got a great offer and opportunity in front of them that is an important consideration. I would say probably the number one thing that, the more I do this the more I think culture is important. So making sure that you are aligned, if you’re a young owner and you’ve got a big offer in front of you, make it sure that your culture is aligned with the group’s offer. And you have to do due diligence. You have to interview other people that have gone through this process. You have to go out and meet these people that are with the DSO, the culture and level of support that you’re provided on the DSO level to me is so critical.

David Haynes:
I have some groups that I just know, every group has their own culture, every practice has its own culture. And it is like, if you try and mix two different worlds, it just does not go well. So the key in my mind is flushing that out. If things make sense financially we need to make sure that you can get comfortable as an owner with the culture or whatever group you’re gonna participate with. It’s not worth it to partner and hate your life. Partner or sell, because there’s really three different models, when I say partner, that’s just one of the three models that are out there. It’s not worth it to sell to a group, get a big payday and then hate your life everyday for the next five years during your contract, it’s just not worth it. And so we have… That’s to me, probably the most important thing is just getting comfortable with the people and the level of support that you’re being offered.

Ryan Isaac:
Cool. I think we’ve covered common mistakes, questions to ask a broker when getting started. We’ve covered some DSO some common DSO things. We’ve covered definitions, EBITDA. Is there anything else you would wanna say, maybe end of year stuff for people, things to consider before the year wraps up, or going into next year, or anything else important that you just want people to know about in this transition space?

David Haynes:
I would say… I’ll go back to the biggest mistake that I see, and just kinda re-emphasize that. The biggest mistake I see is, people waiting too long to take action, whether that’s an individual in their 60s or 70s, looking to sell to another individual. Or a younger professional, let’s say in their 40s or 50s, that wants to sell to a DSO. And those ages, people have different reasons for selling at different times, of course, we can sell outside of those age ranges. But if you wait too long, then it’s almost like these opportunities, they may not necessarily be around forever. And it’s important to create a competitive environment. And if you’ve got a lot of room left to grow and there’s a ton of gas in the tank, and it’s something that you feel comfortable doing then great, go for it. You don’t necessarily have to sell if there’s a compelling reason to hold on and continue growing your practice, or if you have a lot of debt.

David Haynes:
I spoke with somebody this last week who’s got a successful practice, but they bought it not too long ago, they’ve got a lot of debt, it doesn’t really make sense for them to take action right now. And so there are situations where it does make sense, but if you’re compelled to look at something, engage a professional, we’ll help you through the process and determine what makes the most sense. My goal, my personal goal, is to be, is to not pressure anybody. If we can put something in front of you that makes sense, then let’s do it if it doesn’t make sense, then let’s not do it. Because the last thing you know I want is somebody to regret a decision post-closing and feel like, “Oh man, I really shouldn’t have done this.” That’s just so much worse, but I think the market place…

David Haynes:
The one thing that I fear is there’s so much uncertainty out there. Nobody saw COVID coming, nobody saw the Great Recession in ’08 and those things. So the next event that could kind of rock our world, we don’t really know what that is. And I’m not a generally fearful person, but it’s also, I also acknowledge that I don’t know the future. So if you’ve got an opportunity and a reason to take action, whether that be with a DSO or individual, then let’s do it and come up with a way to make it… Let’s make a competitive environment so that you’re getting the most value out of your practice, because these are good assets, and we wanna help people maximize it.

Ryan Isaac:
Yeah, that’s cool, man. I’ve always been a big fan of the way Menlo does business, just in that way like you’re saying. If there’s a good fit and there’s something helpful to do together, we’ll do it, if not, we’ll help point you in the right direction and move on. I also love that you guys have the real estate component too, because it plays such a huge role in the transactions, and it affects a lot of valuations in the finances of everything, I like the experience you guys have there. One question I am thinking of from a conversation I had this week with an owner, young 50s, really leaning towards bringing on some kind of partner some kind of corporate partner and starting to slowly phase out, but still wants to work a while. He was so new in the process, and really unsure about, What’s my next step? How do I reach out to someone? Does someone have to be super confident, ready to go before they reach out to you, or can you act kind of in a consulting role, in an initial conversation of helping people understand where they’re at or what their next steps are?

David Haynes:
Some of my favorite work is just helping people plan. So we have… We will spend time with… If your practice meets that kind of criteria of where you’re looking at some options like that, we are more than happy to sit down with you and plan your exit. And in fact, I should say it doesn’t even matter really what stage you’re in or what size of practice you’re in, we have somebody here that can help you, if it is not myself, if you fit into a different need, we can put you with right person to help you plan. I think that a lot of money is left on the table just through improper planning. And so if we can set you on the right direction, even if there’s no fee involved or no sale, even if it is 5 or 10 years away, that’s okay. Because we can offer some insight on how to set yourself up for success regardless of the type of transaction that you’re interested in, there’s several things that can be done along the way to help you plan.

David Haynes:
So I actually enjoy those conversations. And even though we represent sellers, I enjoy helping buyers through the process, sometimes it’s like a puzzle like, “Hey, I got declined at this bank, how do we… ” So even if there’s buyers out there, I still enjoy engaging with buyers. At the end of the day, I think our philosophy is like if we are helping people that, that ultimately comes back around at some point, and so we’re perfectly comfortable spending time with somebody that’s unsure of what they wanna do.

Ryan Isaac:
Cool. How do people reach out? Find you, get in touch. No pressure. Some people give their cellphone numbers, but there’s a lot people who listen. I don’t know if you wanna do that. At your own risk.

David Haynes:
Yeah, cellphone is great, it’s 208-407-8307 or david@menlotransitions.com. We’re happy to help, there’s a lot more to talk about. And the thing I find that’s fun about this is that everybody’s different, everybody’s got a different situation and nuances, sometimes it’s illness, sometimes it’s other family circumstances and things like that. And so we’re eager to help you plan, and don’t hesitate.

Ryan Isaac:
Cool, man. Well, thanks David, for spending some time with us. I’m sure we’ll do this again soon, I appreciate it. And thanks to all of you for listening, we’ll catch you next time on another episode of The Dentist Money Show, bye bye now.

Practice Transitions