In this episode of Beyond Bitewings, host Ash welcomes special guest Steve Hipson from DDSmatch.com, a professional dental practice broker with over 25 years in the dental industry. The discussion focuses on what you need to know before selling a dental practice and the steps necessary for a smooth transition. Steve explains how his company assists dental practice owners in planning their retirements and transitions by using a structured approach that starts 3 to 5 years before the intended sale. This approach ensures that practices retain or even enhance their value leading up to the sale.

Steve discusses the importance of evaluating key performance indicators like revenue trends and properly calculating EBITDA. He notes the difference in sale dynamics between private practice sales and those involving Dental Service Organizations (DSOs). Confidentiality and a meticulous planning process are essential aspects of Steve’s service, ensuring that practice owners can sell without causing unrest among staff and patients. For listeners seeking more information,

To find out more visit: https://ddsmatch.com

Key Topics Discussed:

• Introduction and guest welcome
• Role of a Dental Practice Broker
• Importance of networking and experience in dentistry
• Transition planning for dental practice sales
• Working with DSOs versus independent buyers
• Importance of EBITDA and practice valuation
• Confidentiality in selling a dental practice
• Contact information for Steve Hipson and ddsmatch.com

Welcome to Beyond Bitewings, the business side of dentistry, brought to you by Edwards and Associates, PC. Join us as we discuss how to build your dental practice, optimize your income, and plan for your future. This podcast is distributed with the understanding that Edwards and Associates PC is not rendering legal, accounting, or professional advice. Listeners should consult with their business advisors before acting on any of the information that is shared. At Edwards and Associates, PC, our business is the business of dentistry. For help or more information, visit our website at enassociates.com.

Hello, and welcome to another episode of Beyond Bitewings. In today's episode, we have a very special guest with us. His name is Steve Hipsen. He's with ddsmatch.com, and he's been in this industry for some time and quite an expert, might I say. And honestly, I felt like in today's episode, he would be a great addition. He'll be able to share some valuable information with our listeners. So without further ado, Steve, how are you?

I'm doing well, Ash. Good morning. Thanks for having me on. It's a pleasure to be here with you.

Oh, absolutely. Pleasure's on mine. So, you know, for our listeners that don't know what you do and who you are, could you fulfill them in?

Gladly. Good morning, everybody. I'm Steve Hipsen. I'm a professional dental practice broker. I do seller representation when a dentist is ready to think about selling and transitioning his or her dental practice. Something else we do, we also do associate placements, but we do sell side only for dentists who are starting to think about retirement, transition planning, things like

that. Oh, perfect. That's amazing. And you're not just operating locally here in the DFW area. Right? Your reaches are

Correct. So so this is a franchise, and I own the North Texas franchise. I started my company 9 years ago. Okay. And I've been in the dental industry about 25 years. Wow. So I feel one of the most important things is the networking much like this.

Mhmm.

Getting to know everybody and what everyone does. We're really here to serve the dentists and serve the dental community.

That's right. And for those listeners out there that are curious, he is talking about the SWDC convention that we're attending and recording from live. Well, not live. Actually, recording it and then later publishing it. So, you know, you said almost more than 2 decades of experience. Now why is that relevant?

That's a good question, and thank you for asking, Ash. Uh-huh. I believe this is a very network based community business, and dentists are very busy in their practices. Their clinical skills are most important thing to them. But when it comes to the business side of owning a practice, starting a practice, selling a practice, they need our help. And one of the things that we do with my company is we talk about transitioning your practice on your terms. And that that's that's kind of our tagline, but it it really sums up, we're not pushy. We're not aggressive.

We like to talk to dentists when they are 3 to 5 years out from a sale or transition. So we take them through what we call our trusted transition process and help them along the way. I see. Begin to plan begin to plan for this very important next part of their careers in their lives, retirement. So we we work with local CPAs, attorneys, other brokers, all of the dental supply companies, contractors, all of the people that are involved with dentistry, the business side of dentistry every day.

Okay. That's great. And you actually mentioned something important there, and I'm glad you brought it up, because my next question was going to be about that. So starting 3 to 5 years before the actual transition?

We want this to be a comprehensive approach. We want to make sure we get we ask the right questions. Mhmm. We we listen to the dentist. Right. And there's different motivations and different reasons why dentists are ready to sell. Mhmm. What I find more often than not is a dentist will tell me, Steve, I'm just tired.

Mhmm. I've been doing this for 42 years. I've got some form of neck, back, or shoulder pain. We've got grandchildren now. Wife wants to travel a little bit, and I'm just ready to start thinking about what this might look like. So we listen. We ask questions. We understand what's going on in the practice.

How are they doing production wise? Is the practice trending up? Have they begun to trend down? As we get tired, we don't have to work as hard. We don't wanna work as hard.

That's right.

Our goal is to help a dentist understand if he's got declining revenues and we see a 3 year trend that they continue to decline, we don't want him to take the value of a practice that he's built up over the last 20, 30, 40 years and turn the practice into something that is not as valuable for him to sell because he's been coasting for too long. So so we we wanna talk about that, and just let them know, so it doesn't come as a surprise Right.

Later on.

So that's the preparation side of it.

Okay. That's excellent. Yeah. And I'm glad also you brought that up, because a lot of times that's how the practice is evaluated Exactly. From the revenue. Right? That will depending on who the buyer is, assuming if it's an independent buyer. But you also work with DSOs.

We do. They're friends. There are dentists that aren't ready to retire, but they've built a wonderful business, and they're tired of the management side of it. They're tired of the hiring, the firing, the compliance, the HR side of it, all of the things that they don't wanna do with the practice. So we work closely with DSOs because DSOs do a lot of marketing. They'll come to us when I have a practice listed on my website, and they'll say, Steve, tell me about this one. Is this something where a dentist would might want to be part of a DSO? Right. And sometimes it is a good fit, and sometimes it's not, but we absolutely partner Right.

With the DSOs.

Right. Right. Okay. Good. And I bring this up just because, you know, a lot of times the main influencing trait of a transition, sometimes is the money. Right? And a lot of these people, sometimes they hear 5x7x4x, and it's off something called EBITDA and analyzing being able to understand that EBITDA is important, right? Because when a potential buyer is ready to make an offer, they are calculating the EBITDA on their side. But a professional that's working on your behalf may be able to tell you, look, that's not the right way to calculate the EBITDA. It needs to be adjusted correctly.

And there are some factors that we need to put in and what that does. So just to give you an idea, so for someone like Steve, he'll say, Oh, look, that should have actually been included in the EBITDA, right? That's actually not part of their operations. That's just something they're doing for tax reasons. Once it's added, let's say the potential offer was going to be 7 times. Right? EBITDA. And let's say the saving was just, I don't know, $10,000. That's an additional 70,000 he just brought in to the initial offer. So, I mean, it goes without saying why it's relevant and important for someone like Steve to be on your side when you're deciding to sell.

Right? I mean, I know that, but that's also part of the reason why I have him on the show where he can talk a little bit about this. What are some of the other things that you can think of?

Yeah. It just just just to your point, Ash Ash just for a moment, is is EBITDA good, bad, or indifferent, it's something that is somewhat negotiated, and it shouldn't be. And sometimes a dentist has a hard time understanding that. Like, how are you getting both getting different EBITDA numbers? How does that work? Right. So so we take them through that understanding at some level so that they can see that. Right. EBITDA is a big number when DSO is looking at it, but a a lot of my business is a private practice doctor ready to retire, selling to another private practice doctor. Right.

EBITDA is important, but it's not the most important thing when we're selling doctor to doctor. DSOs look at it for obvious reasons Mhmm. But a big part of my business is doesn't even involve the EBITDA. It just involves the relationship and making sure that the buyer's qualified, that the and, you know, we wanna match. We wanna match personalities. We wanna match geography. We wanna match education. We wanna want match clinical skills, and we also wanna make sure that buyer qualifies financially, which is where my relationship with the top lenders comes in.

Right. So so EBITDA is very important when you're looking at DSOs. It's rarely talked about Right. From a doctor to doctor sale.

Right. And I would imagine, like, for someone who's only owned one practice for majority of their lifetime, it's a big part of their investment, big part of their retirement. Right? So you want to make sure you're getting your top dollars when you do that transition.

Absolutely. And and one of the things we do, I like to call it, we stay in our lane. Okay? I'm not a CPA. I'm not a certified valuation expert. So we use a third party group called Blue and Company

Uh-huh.

Out of Indianapolis, and they do all of our professional business valuations. Right. The dentist pays a fee for that, but what it does, it gives the true fair market value of that practice based on lots of criteria that we gather. The financials, the productions, the collection, everything that's going on. We look at a trend. We're again, there's that word. We're looking at how that practice is trending. Mhmm.

And then what we deliver to that seller is a fair market value. It's a 75 page comprehensive business valuation. Then my job as the broker is to find a qualified buyer who's willing to pay that price. What we do not wanna get into is a buyer starting to lowball and haggle and negotiate. That's we're not buying a used car. We're buying a dental practice

That's right.

Right, that this dentist has put his heart, blood, sweat, soul into. So we wanna make sure, like you said, Ash, that that value of that practice is correct, and we're gonna return that value to that seller at closing.

That's good. That's good. Now I just thought of one question that was once asked by a client, and I'm like, you know what? This is probably the right time to ask him this. You know, oftentimes, I feel like, practice owners who's getting ready to sell, they're worried about their staff members finding out and how they would react to it. And they sometimes wonder, hey, would it be possible for me to work with someone who can do this confidentially?

That's a great topic, Ash, and I'm I'm smiling as you said it. You know, there's really three reasons why a seller is gonna hire me. Mhmm. Number 1 is the experience, and we started out saying, you know, I've been working with dentists for 25 years. I understand the business of dentistry and what goes on in the dental practice

very, very well.

The, second reason dentists is gonna hire me is the confidentiality in how we work. We do not wanna alert the staff. We certainly don't wanna announce this to the to to the patients in the practice. Mhmm. It causes a distraction. It causes a panic. The staff starts starts worrying, what about me? So the confidentiality that we work with is the second reason. And most importantly is the third reason is the process, our trusted transition process, what we're gonna do to take this seller and the buyer all the way through the through the closing.

So those are three reasons why a dentist likes to hire me.

Okay. Excellent. That's good to know. And then if they have more questions that I can't think of right now, what would be a good place to

contact you? Thank you for asking. My company is ddsmatch.com. Alright. All we're doing is matching buyers with sellers. My name is Steve Hippson. I live locally here in Dallas. I own this franchise in North Texas. You can reach me anytime at shhipson@ddsmatch.com, or just go to the website, ddsmatch.com.

You'll find me.

Perfect. Amazing. And, of course, we're also going to include his contact information into our show notes. So if you didn't have a pen to write that down, you can always scroll down and, you know, find that information. Well, thank you so much for being on our show, Steve. It was a pleasure having you. I look forward to connecting with you more.

You're very welcome. I appreciate you giving me the time. Thank you.

Thank you.

Thanks for listening today. Be sure to subscribe to Beyond by Wings on your favorite podcast platform. For more information, you can follow us on Facebook, Twitter, and LinkedIn, or reach out to us on our website. You can also shoot us an email at info at e and associates dot com.