Predictions and Observations of the 2002 Market – Part 2

Category: Brokerage, Dental

I have been rather harsh in my recent columns about partnerships, and a few of my clients have let me know that they are in partnerships where my dire predictions of them have not proven to be true. In fairness to those who are partnered with other dentists, I clearly recognize the many benefits you enjoy and I compliment you on combining your skills to extract the merits of this particular dental care delivery system.

However, my telephone rarely rings with someone on the other end who is calling to tell me that everything is just fine. I usually receive quite the opposite type of call, where an appraisal is immediately required due to dissolution of the partnership.

On the other hand, every dentist I know who is currently in solo practice and was once was in a partnership, tells me that they will never enter into another dental partnership.

Why Some Partnerships Succeed

Another recent observation about partnerships is the trend towards those that were specifically formed to “exploit” the unique skills of each individual. I have discovered that in the partnerships that do succeed, each of the partners will have been trained in a different sub-specialty, such as implant surgery. Typically, each dentist has no interest in the other’s specialty, not wanting to compete with his or her own partner. And further, my observations I show that partnerships in remote areas are typically not as competitive and enjoy an abundance of patients to be treated, thus eliminating the potential for conflict.

It then becomes obvious to me that dentists who don’t compete for the “bread-and-butter” work will have a better-than average chance of survival in the form of a partnership. As well, those situated in remote or northern communities where specialists are lacking have somewhat better odds of survival, due to the necessity of referring some treatments “in-house” to their sub-specialty partner.

In fact, I recently appraised a number of large group practices, scattered around Canada, where the owners have clearly found a method of managing their practices in the spirit of compromise and co-operation. Unfortunately, these practices often exhibit a higher overall operating overhead. I suppose the resulting net income is sacrificed in order to achieve more personal freedom.

Today’s Buyers

Clients who are listing a practice typically ask this question: “What will be the profile of the buyer of my practice?” The answer is that this is not an easy question to answer, but in general, there are some prevailing characteristics, namely that they:

  • are roughly 50 per cent female;
  • hail from all over the world;
  • range in age from late 20s to early 40s, but mostly in the late 20s to early 30s;
  • are servicing substantial debts, usually in the six figure range;
  • are seeking “lifestyle” practices that are not dependent upon too many evenings and weekends; and,
  • wish to be busy, quickly, without paying the long and hard dues of their predecessors, and they are prepared to pay for that privilege in the form of goodwill, like never before in the history of the dental practice marketplace.


The market is ever-changing; sometimes in ways than I could not have foreseen. That’s what makes this area so interesting and challenging. I intend to periodically submit these updates and observations, in the hope that they will help to guide you through the sometimes difficult process of timing your eventual exit from dental practice ownership.

Ontario Dentist – November 2002