The Dental Desk - Issue #11 : simplebooklet.com

CEO s Message Looking For Featured Practice Listings CLICK HERE Dear Readers It has been over a year now since we started this publication and we really want to thank all of you that have contributed to the Dental Desk through great ask the expert questions or article requests and your feedback on the content has been wonderful We created the Dental Desk magazine in an effort to provide industry advice from Dental Advisors and we continue to grow in our advisory group so you will continue to see articles relevant to your health and wellness and the wellness of your business We will continue to work hard to bring you relevant and current information in a timely fashion If you have questions or requests for information that you would like to see in article format please send those to our editor Yvette Shanahan email yvette availdentaladvice com We wish you all a great spring and hope that you all had an amazing Spring Break Here s hoping that warmer weather will see us all out and about enjoying the Western Canadian way of life Page 5 Ask The Expert Financing For Deals Page 8 5 Factors That Can Impact Practice Values Page 10 Being A Buyer Nothing To Fear But Fear Itself Page 12 Big Deal or Big Dupe Know What You re Getting Into DARREN SHANAHAN Avail Dental has been a trusted resource in the dental industry since 2012 Founder CEO Avail Dental Exit Advisory Services THE DENTAL DESK MAGAZINE 2 www AvailDentalAdvice com

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HERE ARE SOME THINGS THAT I HAVE COME TO UNDERSTAND Edmonton Area A Hotbed of happenings Is Opportunity Knocking by Morgan Minkus AVAIL Listing Assistant 1 The Edmonton Area is a highly sought after marketplace Edmonton alone is a thriving urban centre with a great community feel 2 professional sports teams robust minor sports programs enviable arts and cultural programs and events and deep rooted charitable and volunteer organizations Who wouldn t want the opportunity to live and own in this area WHAT S UP IN EDMONTON The other day I was working on sending out another listing alert to our registered buyers list and I got to thinking what is happening in the Edmonton and surrounding areas market It feels to me like the Edmonton area has become a hotbed of activity As the listing assistant for Avail I have the unique perspective of observing when there are spikes in activity in specific marketplaces So as the Edmonton region is coming across my desk more and more I just had to ask Darren what is behind this dramatic rise in activity Once I had a better understanding of what is driving this activity I thought it would be great to share what I ve learned with the subscribers of The Dental Desk 2 The areas surrounding Edmonton are scenic wonderful communities with all the benefits of living nearing a major urban centre but with all of the benefits and safety of living in a smaller community The Edmonton area as a whole is so attractive for those looking to plant roots and build a successful business www AvailDentalAdvice com THE DENTAL DESK MAGAZINE 3

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3) Post-pandemic (if we can say that) many seasoned practiceowners started to take a look at personal goals and have decidedthat now is the time to transition out of practice ownership.4) Rising interest rates have created an environment where sellersare more motivated to get out of ownership, while buyers are being alittle more cautious about getting into ownership. Darren sharedwith me that this type of environment is very temporary. Similar to acresting river, conditions shift and change rapidly for a short period,the river crests and then the waters start to settle back to their usualflow.5) DSO’s big, small and in-between continue to be present and canreally impact the supply and demand curve.What does all of this mean? Well from my vantage point, it meansthat we have a great deal of interest from new buyers registeringdaily and we’re seeing more and more Edmonton area listingscoming up. It means that there is interest and opportunity - whetheryou’re considering a transition from ownership or whether you’reconsidering a practice purchase. And it means that this area isbuzzing with activity!So my advice to anyone reading this article is this; contact Darren tomore fully understand the environment in the Edmonton area,especially if you are considering a transition in the next few years.And for those of you who may be considering purchasing a clinic,make sure you register on our confidential buyers list so that I caninclude you in our listing alerts!Darren, and our team, work really hard to match our buyers and oursellers, and we want to keep you informed of this changingenvironment. While opportunity seems to be knocking, make sure you don’t missyour chance to be part of it!EDMONTON & AREA CONTINUED

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Over the last several months we’ve been receiving some questions from the dentalcommunity. Our experience in brokering and appraising hundreds and hundreds ofpractices has made us a natural place for professionals to turn with theirquestions. We realized that several people had the same questions and so wethought this might make a great forum for people to ask their questionsanonymously and receive their answers. Therefore, ‘Ask the Expert’ was created.Please feel free to send us an email with your questions toDarren@AvailDentalAdvice.com.Question: I’m hearing that it’s really difficult for newbuyers to get financing. How can I make sure thatpotential buyers are actually eligible to purchase?Answer: That is a loaded question. Buyers aren’t really havingtrouble getting financing however banks are requiring morevalidation of information before agreeing to lend. Therefore, the bestway to enable buyers (or ensure easier financing) is to make sureyou have a proper bank-approved appraiser to complete anappraisal.Question: I see that you have expanded into BC. Willyou be attending any conferences or seminars in BC in2023?Answer: Thanks for this question. While none of our team were ableto make it out to PDC this year due to conflicts in our scheduling, wedo hope to attend TODS in October. Around the same time we’replanning a celebratory launch which we will be inviting dentalprofessionals, lawyers, bankers and accountants to join us. Ourtalented BC rep, Corinne Mark, is also usually available for in-personmeetings when needed.CANDID COMMENTARY ON PRACTICE VALUATIONASK THE EXPERTThe "COVID Effect" On Your Practice:Call Us To Learn More.In order to prepare for the future,In order to prepare for the future, you must consider the past.you must consider the past. We can help.We can help. 1-866-Go-Avail1-866-Go-Avail ((1-866-462-82451-866-462-8245))THE DENTAL DESK MAGAZINE  | 6

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Question: How do you foresee the new governmentdental program affecting profitability in clinics?Answer: This is a largely unknown program, which manyCanadians are very excited about. However the affect on thedental practices really won’t be know for at least 12-18 months.We can, however, assume that lower income areas will benefitfrom this the most and will see the largest rise in demand ofservices. It’s still too early to tell what, if any, negative effects thisprogram will have on those practices.THE DENTAL DESK MAGAZINE  | 7ASK THE EXPERT CON'T:

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FACTORS THAT CAN IMPACT PRACTICE VALUES BY DARREN SHANAHAN One of the most common questions that I am asked regularly is what is the biggest factor that impacts a practice value This is a big question and really there is no one key factor or element there are several things that impact practice values Additionally these elements often volley for importance ranking as on any given day one can be more impactful than the others That said I ve endeavoured to focus on 5 of the consistently present factors that can impact practice values Let s start with Interest Rates because it s on everybody s mind right now It s true that interest rates have risen quite a bit which has resulted in buyers pulling back a bit This seems especially true of dental investors or DSO s Many of whom have paused any aggressive pursuits of practice purchases However even though private and corporate buyers may be proceeding cautiously the thing to remember is that they are proceeding Buyers can still borrow money even though it is more expensive today and much like a mortgage those buyers can still gamble on a floating rate or shortterm locked in rates So interest rates are creating caution but sales are still happening The caution from all types of buyers translates to more stabilized cap rates It doesn t mean a practice value decreases it means that multiples are not reaching crazy heights and values have settled into reasonable ranges Obviously with the rise in interest rates more focus falls on Supply and Demand Not surprisingly supply and demand has not been hugely affected by the rise in interest rates Truthfully current owners are still looking to transition out of ownership and buyers are still looking for opportunities So while supply and demand may not have changed that much what has changed are those super fast sales Cautious buyers are taking more time work through the numbers do their due diligence and ensure they are set up for success following the purchase So the buyers and sellers are still out there they re just taking more time to get the deal done One thing the pandemic illuminated is that the need for dental services doesn t go away even when the world stops for a period of time The demand or need for dental services is an ever present factor in valuing a clinic Practices that generate significant cash flow will always be valued higher Continued

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5 FACTORS THAT CAN IMPACT PRACTICE VALUES CONTINUED Factors such as the age of equipment or clinic aesthetics rarely have an impact on value The newest most state of the art clinic still requires a good base of active patients combined with reasonable staff costs and in line overhead in order to generate good cash flow and good cash flow comes from active patients with the demand or need for dental services Demand active patients good cash flow higher values it s obviously more complex than this but this is a good visual of the point Team Members are another consistent factor As mentioned above if active patients are key to cash flow then team members are an integral part of servicing that demand We all know that there is a shortage of associates RDH s assistants etc and without those team members production and billings can be negatively impacted The right dedicated team members definitely impact a practice value through their contributions to cash flow and patient satisfaction Finally premises leases can create some complexities which can negatively affect practice values While everyone would like to own the real estate with the practice most owners find themselves involved with leases and leasing conditions Things like demolition clauses can cause buyers and or lenders to pause or back away altogether Banks are also reluctant to finance the purchase of a practice if the term of the lease is shorter than the term of the loan including renewal options Leases of 5 years or longer with 5 year renewal options or basically anything north of 8 10 years is ideal Shorter leases or restricted options may end up impacting the practice value Again these are really generalizations when considering factors that impact practice values but it is a good overview In future articles we ll take a closer look at hygiene programs active patients and new patients and how these impact values I encourage you to contact me if you would like to learn more or if you would like to delve deeper into any of these areas Call Us Today THE DENTAL DESK MAGAZINE 9 www AvailDentalAdvice com

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time because DSO’s didn’t exist andinflation was lower. They may evenview these generations as greedy -perceivably having lower studentdebt, an easier path to ownershipand then selling to DSO’s forinflated prices and big paydays.Now, I too am a gen x and I knowthat this perception is skewed. Iremember the boomers strugglingwith interest rates of 18% and Iremember my own generationstruggling with collecting downpayments and struggling to accessgovernment education assistanceonly to find insurmountable barriersto post secondary education. Thetruth is that these generations havefar more commonalities in theirstruggles than they realize.So, for new buyers facing theirgeneration’s financial struggles andContinued B E I N G A B U Y E R : N O T H I N G T O F E A R B U T F E A R I T S E L F ?BY YVETTE SHANAHANBeing a buyer can be a nervewracking thing. You know that mixof excitement and anxiety you feltwhen you were accepted into dentalschool? You were so excited aboutthe opportunities and challengesthat lay ahead, but you were alsoaware of the enormous amount ofstudent debt you were about toundertake. Or, that same mix of emotion whenyou bought your first new car, orhouse? Somehow you know thatthings will be great and yet the fearof the unknown combined with thefinancial commitment being madecan send a shiver down the spineand a bead of sweat upon theforehead.Today, it seems like buying a dentalclinic might be even more nervewracking than in days gone by. Itappears that things like higher nterest rates and tighter lendingrestrictions are creating fullbarriers between buying andowning a clinic. Buyers with ayoung family, a new house or othermajor life purchases have a toughtime wrapping their head aroundspending 2 or 3 million dollars on aclinic. Add to this that dentalschool doesn’t really offer anyentrepreneurial or business classesto prepare you for managing andoperating a clinic. It can definitelystart to feel like this may be anunattainable goal.The problem with this feeling is theunintentional divide it createsbetween associateship andownership. Just as millennials andgen z’s struggle to purchase ahouse, so too are these generationsbelieving they may never attainownership. They believe thatboomers and gen x had an easier

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fears, what can be done to help you to achieve ownership? Well, the answer might very well be to take a deepbreath and try not to let fear be a factor. Now, I’m not suggesting that you jump in with both feet and don’tconsider the financial impact, but I am suggesting that you utilize your advisors in effort to understand theopportunities that are available to you now. You may be paying a higher interest rate in the short term, but youare probably paying lower multiples (or cap rates) in the short term as well. Your advisors may very well beable to show you that it all works out the same in the end.And in regards to that perceived generational divide, it may interest young buyers to know that most ownersare hoping to sell to the next generation of doctors. However, clinic owners transitioning to retirement havespent their life working on this investment and many need this investment to ‘pay-off’ in order to finance theirretirement. They are not being greedy - they have worked their whole life for this and they deserve theretirement they have worked for. The flip side is that a new buyer is getting a well functioning, establishedpatient base, experienced staff, and productive clinic with cash flow without all of the work of a start-up.So, if you’re a buyer who is fortunate enough to have an opportunity to buy an existing clinic, talk with youradvisors and be brave in your approach. You may be missing out on amazing opportunities because fear isholding you back.'BEING A BUYER: NOTHING TO FEAR BUT FEARITSELF' CONTINUEDTHE DENTAL DESK MAGAZINE  | 11www.AvailDentalAdvice.com

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All of this begs the question, ‘whatputs me at risk for the big dupe?’The answer to this is a little morestraight forward. Now, obviously,we are advocates forrepresentation. Using a trustedbroker exponentially reduces yourrisk of ‘losing out’ in a deal. Abroker can see so many aspects ina sale - we often refer to it as the‘macro view’ or the 10,000 footview. This results in betterprotection for all parties involved.Additionally, brokers have a bettersense of what is going on in themarket place and can work toensure the best sale match for youand your situation.The real cautioncomes with unsolicitedoffers. ContinuedB I G D E A L O R B I G D U P E ? K N O W W H A T Y O U ’ R E G E T T I N G I N T O .BY YVETTE SHANAHANThese days it seems many peopleare asking questions about ‘The BigDeal’, ‘The Best Deal’, ‘The BadDeal.’ In addition to this, more andmore people are wondering if thosereally big deals are really real, or ifthose (few and far between) bigdeals are actually big dupes?Well, the answers are really not socut and dry. The answers aredefinitely more complex.First, let’s clear the air aboutsomething; Yes, DSO’s are still veryactive in the market place, and No,DSO’S are not evil empires!So here’s the thing - that ‘big’ dealor ‘best’ deal really is different foreverybody. For many, the ‘big deal’is a fair market value, easytransition to a motivated associateand a great legacy of patient care. For some, it’s an open market salewith a well matched buyer, followedby a win-win associate agreementand none of the busy-ness ofownership. And, for some, it’s afront-end payday, a target-ledassociate position with shareoptions and no managementresponsibilities. So, the big deal orthe best deal is all relative. Thatbeing said, there is always thepossibility of the big dupe.Now that doesn’t necessarily meanthat you’ve lost money or someonehas pulled the wool over your eyes,but it does mean that you (theseller) may not have actually foundyour best match - thereby givingyou the 'Big Deal’. (Also, don’t gettoo hung up on the words ‘bestmatch’ - this is not a dental datingservice)! www.AvailDentalAdvice.com

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Unsolicited offers are very often an offer of big money, and quick transition. They tend to be dazzling and exciting. Andthere is nothing wrong with taking a serious interest in this, but you must be cautious. If this offer (solicited orunsolicited) catches your eye then remember this: if one party is interested, then more parties are probably interestedtoo. It sounds very basic but truthfully, it’s easy to be dazzled by an offer and forget the marketability of your practice. If you receive a big dazzling offer your best plan is to vet that offer against others. If that big offer comes from one DSO,why wouldn’t other DSO’s be interested? You simply will never know if you got the best deal for your situation if youdon’t compare it to other offers. You could be leaving dollars, transition goals, share options, total buy-outs, stafftransitions etc on the table.Most people know about the big 3 DSO’s but did you know that there are actually 10-14 small, medium and large corpsout there? This is why it’s so important to not sign anything unless or until you have a chance to have a certifiedvaluation done and you have a better understanding of the true market value. Once you know that true market value,then you’ll understand that it’s worth entertaining more than that one offer (that may have had you under a gag order for6 months while someone else sits in the driver seat of your potential sale).Our advice is to invest in the services of a trusted broker (with reasonable rates … this is another topic for anotherarticle). Let this trusted advisor take a macro look at all of your possibilities and they will help you to negotiate the bestdeal for you, the big deal for you. Let them make sure you don’t fall victim to the big dupe.'BIG DEAL OR BIG DUPE? KNOW WHAT YOU’RE GETTINGINTO' CONTINUEDTHE DENTAL DESK MAGAZINE  | 13www.AvailDentalAdvice.com

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OUR FEATURED LISTINGSNew Listing Calgary Practice Ref#1736Location: Calgary (South East), Professional Building Ops: 7Gross production: $1,361,911Equipment and leaseholds in Excellent shapeOwner willing to stay on dependent on offer andtransition plan.Net income after all doctors’ fees Ave $325,130 (23.9%ROI)Hygiene production: 33%RDH: 2 (FTE)Digital charts and Intra oral X-ray/PanValue: $2,176,493 (Requesting Share sale) by Darren ShanahanCall For DetailsCall For DetailsTHE DENTAL DESK MAGAZINE  | 15www.AvailDentalAdvice.com

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OUR CURRENT LISTINGS by Darren ShanahanGeneral Plus Real EstateRural West of Edmonton(Ref #1717)$1,794,829$799,148General PracticeRural East of Edmonton(Ref #1712)Gross Income:Clinic Type:THE DENTAL DESK MAGAZINE  | 16#of Ops:77QUESTIONS ABOUT LISTINGS?Call/Text Darren Founder & OwnerCell: 403.862.7406Contact Darren Shanahan for further details on all of our current listings.$1,069,208 + Real Estate$2,412,864Listing Price:www.AvailDentalAdvice.comGeneral PracticeSaskatchewan Rural(Ref #1392)8$1,250,000$1,300,000Gross Income:

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REIGNITING YOUR PASSION FOR DENTISTRY BY DR KRISTIN YONT Dr Walter Sequira DDS PhD FICD FCAHS the new Dean at the University of Saskatchewan College of Dentistry invited me to be the keynote speaker at the dental students White Coat Ceremony in January 2023 My assigned topic was Pursuing your Passion in Dentistry Are you losing your passion for dentistry Is it buried under the rising costs of business staff shortages or the unpredictable turn of events that we tackle every day in our office Maybe you lost it after an unfair patient Google Review that you can t respond to yet another costly licencing requirement or you just can t conjure up the joy in the profession that once fulfilled you One solution to reigniting your passion for dentistry is to reconnect back to the reason that you applied to the dentistry in the first place Why did you want to become a dentist The fact that you are now a dentist is not due to any haphazard random chain of events that has occurred At some point in your past you downloaded some sort of inspirational message providing you with all the intentionality and possibility necessary to become a successful healthcare provider When you can connect to your inner passion for dentistry the networks in your brain shift to a higher level of functioning and become more adaptive to manage the numerous stressors that you encounter every day Your brains innate guidance system gets turned on which allows for better integrative circuits www AvailDentalAdvice com throughout your nervous system which reduces your stress response and increases your potential to experience more joy This will have a profound effect on the quality of your daily thoughts emotions attitudes relationships behaviours beliefs and the physiology of your body The SMART Program is a solution The Stress Management and Resiliency Training Program was researched and developed by Harvard Medical School and the Benson Henry Institute for Mindbody Medicine at Mass General I am one of three SMART certified healthcare providers in Canada I can help you shift every stressor to be interpreted as a challenge every obstacle will become an opportunity for growth every adversity can promote positive adaptation Continued

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REIGNITE YOUR PASSION FOR DENTISTRY CONTINUED SMART frees up your mental bandwidth creating space for happiness joy contentment and ease Do you want to reignite your passion and joy for dentistry Register for my next SMART program starting April 24th June 12th For more information about the SMART Program join me for my next 75min free informational webinar April 18th 2023 6 30 MST Topic The Science of Stress and SMART Solutions Register for this webinar today Click To Register

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YOUR TRUSTED INDUSTRY PARTNER Did you know that for over 2 decades our Founder Darren Shanahan has been in the dental industry as the go to for other industry professionals and leaders Every phone call that comes into our office is about a dental or healthcare clinic We don t work in any other industry We provide owners with a firewall to protect them from all of the pitfalls we know are out there throughout a transaction because we know how to prepare the deal and navigate the waters We re here for you Meet Our Team Darren Shanahan Yvette Shanahan Jennifer Larocque CEO Founder Co Founder Transaction Manager Logan Reynolds Morgan Minkus Transaction Specialist Transaction Specialist Questions Call 1 866 Go Avail 1 866 462 8245 or visit AvailDentalAdvice com

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THE DENTAL DESK MAGAZINEB Y A V A I L D E N T A L E X I T A D V I S O R Y S E R V I C E SThe Dental Desk Magazine runs on a monthly basis to keepstakeholders in the dental industry in the loop.Avail Dental Exit Advisory ServicesProudly Serving Western Canada (Alberta,B.C. & Saskatchewan)1-866-Go-Avail (1-866-462-8245)www.AvailDentalAdvice.comMay 2023 Come back for Issue #12 which will reveal industryinsights, predictions and trends.