Return to flip book view

I N T E R E S T R A T EL A U G H T E RT H EF R O M W E S T E R N C A N A D A ' S L E A D I N G D E N T A L B R O K E RM A G A Z I N EI S S U E # 1 3 • S U M M E R 2 0 2 3A . I . F O R D E N T I S T SIs The Best MedicineFace It, Fear It Or Embrace It?Impact On BuyersL I S T I N G S O N P A G E 1 2

Page 4 - Ask The Expert:Staff Contracts, DealFatigue & More Page 8: Interest RateImpact On BuyersPage 13: A.I. ForDentistsPage 15: Laughter Is TheBest MedicinePage 18: "Alone" SurvivalSeriesDear Readers,Interest rates are the talk of the town and on everyone’s mind; how itaffects everyone is different. Certainly, you are not alone I too still have amortgage and had to make a decision this year on a segment of mymortgage that came up for renewal to lock in or not to lock in. Most dental practice buyers have been just taking variable rate loanssince the early 2000s and discussion of to lock in or not to lock in wasonly on the minds of those who were super cautious and wanted tohedge their bets or more commonly referred to as “interest ratediversifying”. Well, here we are with a Prime rate at 2001 levels and practice valuessettling back down to 2017-2018 levels because of it and for the firsttime, we see a divide between practices under and over $2M inproduction and the values for each sector being affected differently. For those of you not buying or selling in the next 5 years just make sureyour profit is tight and practice is well managed and that is all you cando, for those of you in the 1-5 year window of buying or selling weshould chat to make sure your timing is right and that you are well awareof what the current market conditions are like. Let's book a time to chat at www.callwithavail.comTalk soon,CEO's MessageLooking For Featured Practice Listings?www.AvailDentalAdvice.comTHE DENTAL DESK MAGAZINE  | 2Founder, CEOAvail Dental Exit Advisory ServicesD A R R E N S H A N A H A NCLICK HERE

Join UsHealth and Wellness Conference:This event is focused on the Healthand Wellness of the doctor, his/herfamily and team.When:Tuesday, 20 Feb 2024 (Start)Saturday, 24 Feb 2024 (End)Where:Margaritaville Resort Palm SpringsNorth Indian Canyon Drive 1600Palm Springs, CA 92262United StatesQuestions? Contact Yvette ShanahanPhone: (403)701-8780Email: yvette@availdentaladvice.comReserve Your Tickets Now!OR

Ask The Expert:D E N T A L I N D U S T R Yby Darren ShanahanFounder & CEO of Avail Dental Exit Advisory Services & has been in theindustry for more than 10 years.Staff Contracts, Deal Fatigue & Morewww.AvailDentalAdvice.comTHE DENTAL DESK MAGAZINE  | 4

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 not a big believer in having staff signcontracts. I was never asked to sign one by previousowners and it was never a problem. Can you give me acompelling reason why I should ask staff to signcontracts? And won’t that tip them off that I’m thinkingabout selling?Answer: This is a really common question. The answer is sort ofmulti-faceted. First, I think contracts are a good idea - they reallyprotect both the owner and the staff. Second, I believe associatecontracts are vitally important, largely because of the restrictivecovenant component. Convincing your staff to sign contracts can bechallenging and may send a signal that you are considering selling,however, the staff contracts should serve to protect your staff in theevent of a sale and should therefore be more readily accepted byyour staff. I estimate that approx 50% of clinics may have staffcontracts in place and so it can feel like an uphill battle when it isnot commonplace in clinics. That said, with the changing landscapeof the workforce in general it seems like a good idea to formalizework arrangements in a contract thereby protecting all parties andclarifying exit plans should the arrangement not work out. Much liketreatment planning with your patients this also will require planningon the best ways to approach this with your staff. It is a littlecomplex but I’m here to give some guidance if you choose to moveforward with staff contracts.CANDID COMMENTARY ON PRACTICE VALUATIONASK THE EXPERTNeed some personalized,confidential advice?Book A Call With Darren.Book A Call With Darren.We can help.We can help. CallWithAVAIL.comCallWithAVAIL.com

Question: I’ve heard you mention deal fatigue. Whatexactly is deal fatigue and what can be done toavoid it?Answer: Deal Fatigue is usually caused by one or both partiesdragging out a deal for no apparent reason. Slow responses, slowdocuments, just a slow rate of pace as though the deal lacksurgency. Even the amount of information you’re having to sharewith a buyer can seem overwhelming and a feeling of fatigue anddistrust can develop. This happens more often than not whenowners try to sell their practice ‘alone’ as no one is organizing thedocuments and no one is pushing the deal appropriately forwardat an appropriate pace. The best ways to avoid deal fatigue are;1) Hire a professional to lead you through the process andmaintain a good rate of pace and 2) try to visualize the sale fromthe other party’s perspective. Sometimes we need to get in thatmind frame to understand why they need so much information orwhy it’s challenging to gather all of that information.Remembering to be patient, keeping open and regularcommunication and engaging the services of a professional arethe best ways to avoid deal fatigue. As professional, trained,licensed, commercial real estate agents we are trained innegations and rate of pace for commercial deals. We can help.Question: Every time I hear about another interestrate hike I visualize my hard earned investment / myclinic losing value. Am I over-reacting? Is thereanything I can do to preserve my value while interestrates continue to rise?THE DENTAL DESK MAGAZINE  | 6ASK THE EXPERT CON'T:Answer: Practice values much like real estatevalues will fluctuate with interest rates. Whatwe are seeing now is, in some areas of thecountry that still have affordable housing andin net-positive migration of population, theyare seeing higher values in spite of interestrates. This is essentially supply and demandmetrics - people need a home to live in andare willing to pay more the get that home.Practice values are different because,although there is still demand for practices,those buyers don’t HAVE to purchase apractice to make a decent income. They cansimply stay working as associates. Sopractice values have settled into a morereasonable level than the previousunprecedented multiples. This was inevitableat some point as the market couldn’t bare themultiples continuing to rise. If you weren’tplanning to sell your clinic in the last 5 years,you really have lost nothing but you havegained the average 18-22% return oninvestment (or average net profit) annuallyfrom your practice. To put this in context, ifyour practice were to generate 1.25m in grossproduction, your expected profit would beclose to $250k per year. So the mostimportant thing that you can do is make surethat your practice is still profitable. This issomething you have control over. If you needhelp determining if your practice is profitable,we can help. At Avail we do profit audits everyday and we’ll be happy to review your practiceto ensure that the value of your practice ismaintained, regardless of interest ratefluctuations.

Question: Sorry to ask such a pointed question but do you assign lower values toclinics in the hopes of making a fast sale and a quick commission?Answer: No. There is zero upside for a broker to do this as one quick sale will not sustain a business. Nobroker ‘worth their weight in gold’ would benefit long term from this. Reputation and respect are vital pillarsin our business. The goal, always, is to represent the best interests of your client - which means providing themost accurate market value of a clinic. The commission paid to brokers should reflect an honest wage forthe work they do representing their client. I maintain a commercial real estate license in good standing withthe Real Estate Council of Alberta and adhere to their code of ethics and high professional standards. Iwould never jeopardize my professional reputation for a quick sale / quick commission.THE DENTAL DESK MAGAZINE  | 7ASK THE EXPERT CON'T:Interested In 2024 The Health & Wellness Winter Escape?Reserve Your Tickets Now!OR

I N T E R E S T R A T E I M P A C T O N B U Y E R SBY DA RREN SHANAHANExcess demand in the economy is surprisingly persistent.The Labor market is still tight.Currently, the BoC assets total about $358 billion, which has significantly moderated from its peak of $575 billionin March 2021. Yet they are far above their pre-pandemic level of $120 billion.The inflation rate has come down to 3.4% for May 2023 after reaching a 30-year high of 8.1% in June 2022. Butannualized inflation over the past 9 months is 3.9%. This number shows that going back to 2% will not be easy orfast.The prime rate has risen from 2.45% in March 2022 to the current prime rate of 7.2%.As a valued partner in the dental industry, I feel it’s an ideal time to provide you with an update on the current interestrate market and its potential impact on buyers seeking 100% financing in the dental market.For those who want to see the past Interest Rate Market Overview the following link provides valuable information:https://wowa.ca/banks/prime-rates-canadaThe Bank of Canada is raising policy rates again:The Prime Rate is at its highest level over the past 22 years. This rate is burdensome on those with variable-ratemortgages, HELOCs, and lines of credit. Meanwhile, sales and home prices in Canada’s housing market haveaccelerated over 2023, which suggests that financial conditions have not been restrictive enough.Over the past eighteen months, the interest rate market has experienced rapid increases due to various economicfactors. The Federal Reserve's decisions, inflation rates, and global economic trends have all influenced interest rates.As of July 31st, bank prime interest rates are 7.2%, and experts predict a continued upward trend in the near future.THE DENTAL DESK MAGAZINE  | 8

Impact on Today’s Buyers Needing 100% Financing:The current interest rate environment has important implications for buyers looking to secure 100% financingin the dental market:1. Cost of Borrowing: With interest rates on the rise, the cost of borrowing for dental practice acquisition orexpansion has increased 10 times since May 2022. Buyers relying on 100% financing are facing highermonthly payments and higher overall loan costs approximately 3 times what they were in 2021-(early)2022.2. Qualification Criteria: As interest rates fluctuate, lending institutions have adjusted their qualificationcriteria for borrowers but are certainly still lending to Dentists. Buyers seeking 100% financing may find itnecessary to meet more stringent credit-worthiness and financial stability requirements around the practicethey are purchasing. This is due 100% to the cost of borrowing impacting the bottom line affordability andbank test rates. As a buyer I would plan for the next three years to see how your projections for the clinic youare buying will meet the needs of your financing requirements.INTEREST RATE IMPACT ON BUYERS CONTINUEDTHE DENTAL DESK MAGAZINE  | 9www.AvailDentalAdvice.com

3. Timing Considerations: Given the projected hold on interest rates and the potential to still moveupwards, buyers may want to carefully assess the timing of their acquisitions. Locking in financingat a lower interest rate before rates rise further could lead to significant long-term savings. Althoughnot often spoken of, fixed rates are always an option in commercial financing and you might chooseto lock in part or all of your loan to mitigate future interest rate hikes.4. Market Competition: As the interest rate market evolves, the demand for dental practices mayalso fluctuate. In certain markets buyers seeking 100% financing may face increased competitionfrom cash buyers or those with substantial down payments, potentially affecting the availability andpricing of practices. Alternatively, we have seen buyers who are in the market for smaller practicesreluctant to move forward due to their concern over where rates might go or the annual cost ofborrowing. This had created some demand/hesitancy for buyers as prices for these practices settleback down to 2011-2018 levels. Navigating the Changing Landscape:To make informed decisions in this dynamic interest rate market, buyers should consider thefollowing steps:1. Engage a Health Care Commercial Financial Advisor: Seeking advice from a qualified financialadvisor with experience in the dental industry can help buyers understand the current marketconditions, evaluate financing options, and devise a suitable financial strategy.2. Explore Loan Options: Buyers interested in 100% financing should explore various loan programsand lenders. Understanding the terms, interest rates, and flexibility of each option can aid inselecting the most advantageous solution.3. Assess Long-Term Goals: Buyers should assess their long-term goals and financial capabilitiesrealistically. Careful planning and budgeting will help mitigate risks associated with rising interestrates.INTEREST RATE IMPACT ON BUYERS CONTINUED

4. Assess the practice: Understand what you will realistically be able to do with the practice you arepurchasing and don’t overextend yourself. Trust me when I say that Bankruptcy is not what you wantso take the forecasting and projections you work on seriously and understand the cashflow of yourpractice.As a reputable advisor, we remain committed to assisting sellers and purchasers in navigating thechanging interest rate market. Our team is available to provide personalized guidance, advice andsupport as you pursue financing solutions tailored to your specific needs.If you have any questions or require further information, please don't hesitate to reach out to DarrenShanahan on his personal cell at 403-862-7406.Call Avail Today!INTEREST RATE IMPACT ON BUYERS CONTINUEDIf you'd like to discuss your practice, give us a confidential call!1-866-Go-Avail (1-866-462-8245)

are we already fully immersed inA.I. but we actually like it!Fear It: Truth bomb - we both loveand hate A.I. How many times dowe hear ourselves or otherscomplain about self check-outs,and the sentiment that using themkills jobs? Conversely, how manytimes do we head to the self-checkline at the grocery store becausethe ‘teller line’ is too long? We lovethe efficiencies of the systems butwe fear the consequence. Will therebe jobs lost? As A.I. becomes moreand more integrated in dentaloffices, will there be jobs lost? Willthere be a cost savings to patientsand will that result in lower profits?Or, will it create efficiencies, givethe gift of time and allow for moreprocedures thereby increasingproductivity and process?ContinuedA . I . F O R D E N T I S T S :S O M E T H I N G T O F A C E ? S O M E T H I N G T O F E A R ? S O M E T H I N G T O E M B R A C E ? O R A L L O F T H E A B O V E ? BY YVETTE SHANAHANIt seems like every day we’rehearing more and more and morethings about A.I. and the manyways it is ‘infiltrating our lives’(news outlet words, not mine)!Now, I’m someone who follows theheadlines and likes to read a goodunbiased news article (if such athing exists anymore), and I mustadmit that the barrage of fear-filledheadlines surrounding A.I. have setmy heart racing a few times.However, when I dig into thearticles a bit more I find myselfwondering what is the point ofmanufacturing fear around A.I.?Let’s be honest - as humans,generally, we’re an easily frightenedlot. We tend to not embracechange, even though it almostalways leads to something better.We fear what we don’t know, thingswe don’t understand, the future etcetc. Of course, A.I. is near the top of thelist of things we don’t understand,so do we fear it or face it orembrace it or do we do all of thosethings?Well, truth be told, A.I. has beenaround for a very, very long time.We use A.I. virtually every day inmultiple applications. No onereading this article is ‘living off thegrid’ therefore we are all unwittingaccomplices to the momentum ofthe A.I. movement.Face It: Whether you’re in a dentalclinic or your kitchen at your homeA.I. is either assisting withdiagnostics, imaging teeth andmouths in impressive detail,sending patients messages, makinglists, playing music, makingsuggestions … ‘Alexa what is theweather forecast today’? We mayas well face the fact that not only

Embrace it: Even if you’re a ‘dinosaur’ like me (I recently was asked if I was sure that I didn’t qualify for asenior’s discount) it’s pretty obvious that we have already embraced A.I. and we should continue to do so.That doesn’t mean we shouldn’t proceed with caution though. One of the most wonderful things aboutbeing human is our ability to reason. Therefore, use your reasoning skills, ask questions and (likeeverything else) make sure whichever application of A.I. you are using serves to improve your life and theworld around you. And as far as humans being replaced by machines go, I just don’t see the world embracing that scenario. Itwas a very short time ago when pandemic measures showed us all what a world of being apart felt like,and nobody wanted to continue those measures. We need each other. We need personal connection. So, while A.I. may help us in many ways (especially analytically) you can still expect a personal interactionfrom us … and I assure you that I, personally, write my own articles (no Chat GPT for me). That being said …‘Alexa, what should my next article be about’?A.I. FOR DENTISTSCONTINUEDTHE DENTAL DESK MAGAZINE  | 14www.AvailDentalAdvice.com

thoughts can actually releaseneuropeptides that help fightstress and potentially more-serious illnesses.Relieve pain. Laughter may easepain by causing the body toproduce its own naturalpainkillers.Increase personal satisfaction.Laughter can also make it easierto cope with difficult situations. Italso helps you connect with otherpeople.Improve your mood. Many peopleexperience depression,sometimes due to chronicillnesses. Laughter can helplessen your stress, depressionand anxiety and may make youfeel happier. It can also improveyour self-esteem.ContinuedL A U G H T E R I S T H E B E S T M E D I C I N EBY YVETTE SHANAHANStimulate many organs.Laughter enhances your intakeof oxygen-rich air, stimulatesyour heart, lungs and muscles,and increases the endorphinsthat are released by your brain.Everyone appreciates a goodchuckle every now and then. It’sespecially wonderful to have alaugh when you know how goodlaughter is for your body and soul!According to the Mayo cliniclaughter is a great form of stressrelief - and that’s no joke. There area multitude of short term and longterm health benefits. A good laughhas great short-term effects. Whenyou start to laugh, it doesn't justlighten your load mentally, itactually induces physical changesin your body. Laughter can: Activate and relieve yourstress response. A rollickinglaugh fires up and then coolsdown your stress response,and it can increase and thendecrease your heart rate andblood pressure. The result? Agood, relaxed feeling.Soothe tension. Laughter canalso stimulate circulation andaid muscle relaxation, both ofwhich can help reduce some ofthe physical symptoms ofstress. Improve your immune system.Negative thoughts manifestinto chemical reactions thatcan affect your body bybringing more stress into yoursystem and decreasing yourimmunity. By contrast, positive However, laughter isn't just a quickpick-me-up. It's also good for youover the long term. Laughter may:www.AvailDentalAdvice.comTHE DENTAL DESK MAGAZINE  | 15

LAUGHTER IS THE BEST MEDICINE CONTINUED The best minds in medicine recommend finding ways to laugh about yourself your work and other potential stressors So in the interest of improving the health of our readers and sharing a laugh about the dental profession here are 4 things that annoy most dental professionals and 4 responses you wish you could say Some of these are oldies but goodies so enjoy a little chuckle or a good hearty laugh 1 When a patient tells you I Hate the Dentist Response in your most sarcastic 7 year old voice Yeah well the dentist hates you back Thanks for reminding me of how unpopular I am 2 When a patient pulls out their phone to text blog go live or influence during their appointment Response Would you mind adjusting the angle of your phone so I can squeeze this drill into your barely opened mouth while I try to perform this difficult dental procedure while you make duck faces at your audience 3 When a patient swears they have been flossing and brushing twice a day Response Well your bleeding gums and built up plaque would suggest otherwise but I could be wrong Maybe brushing and flossing is a talent you haven t mastered just yet 4 When your patient announces that they simply can t stand needles Response Why are you telling me this Who enjoys needles especially in their mouth I know you hate needles you know you hate needles Let s not state the obvious On an unrelated note I like your tattoos Tell me were they licked on by kittens THE LIGHTER SIDE OF DENTISTRY

Darren Shanahan,Darren Shanahan,CEO & FounderCEO & FounderCorinne MarkCorinne MarkLéoLéo MorrisonMorrisonAngiAngiMcGarryMcGarryMEET THE TEAM AT AVAIL:Western Canada's Leading Dental BrokerJessie McCrackenAndrewJonesSaraSaraTrennTrennComing Soon!Coming Soon!LoriLori WilliamWilliam National Ortho RepNational Ortho Rep1-866-Go-Avail (1-866-462-8245) AvailDentalAdvice.com

the things we do, we couldn’tprovide a superior level ofcustomer service and we couldn’tbe leaders in our industry withoutthis team. In short - we couldn’t dothis alone.So for those of you who may bethinking about a transition out ofyour clinic, or purchasing a clinic ormaking a retirement plan for downthe road, or even those who want tounderstand the value of their clinic,it begs the question, why would youdo it alone? A clinic transition isarguably one of the largesttransactions of your professionaland personal life, and it deservesthe attention and respect of atrained expert. Lawyers andaccountants can be very valuable inthe process but they do not havethe overall expertise to see youthrough this transition from start tofinish.Continued' A L O N E ' S U R V I V A L S E R I E SBY YVETTE SHANAHANHave you seen the commercials forthe television series ‘Alone’? Thosecommercials absolutely make meshudder. If you’re not familiar withthe premise, wikipedia describesthe series as follows; “Alone is anAmerican survival competitionseries on History. It follows the self-documented daily struggles of 10individuals as they survive alone inthe wilderness for as long aspossible using a limited amount ofsurvival equipment. With theexception of medical check-ins, theparticipants are isolated from eachother and all other humans. Theymay "tap out" at any time, or beremoved due to failing a medicalcheck-in. The contestant whoremains the longest wins a grandprize of $500,000 (USD)”.I’ll admit that I am not the mostcourageous person but I like tothink that under pressure I couldbehave quite courageously.However, for the life of me I cannotimagine the appeal of participatingin this challenge. The amount of adversity and misery endured bythe contestants seems enormouscompared to the pay-off. And,truthfully, who among us wants toface anything truly ‘alone’?In the recent past we all enduredpandemic measures which provedbeyond a doubt that none of usreally want to do things ‘alone’. Ifyou think about it, there really isn’tanything that is done ‘alone’. Evenmarathon runners are supported bycheering crowds, or medics waitingat the finish line, or the person thathands them a glass of water - noone does it all alone.The same rings true for ourprofessional lives. In the clinic wehave front desk staff, assistants,hygienists, doctors and sometimesoffice managers and each of theseroles work diligently to make anefficient and profitable practice. InAvail’s office we have financialanalysts, listing assistants,appraisal engineers, appraisal andshowing representatives, and othersupport staff. We couldn’t do all of THE DENTAL DESK MAGAZINE  | 18

"ALONE' SURVIVAL SERIES CONTINUEDSome may argue that there is money to be saved by undertaking these transactions alone but I beg to differ. Howmuch is your time worth? How much experience do you have with transitions, valuations, and retirement planning?Experts exist in this field because of need, not because of greed (as seems to be the common misconception).Additionally, experts in this field will usually make sure that the pay-off is well worth the investment. These expertswork to ensure that there are no hidden pit-falls, missed opportunities or hidden costs that erode your pay-off. And,at the end of the day you know that your time is far better spent in the chair, or with your family, or engaging in yourtreasured hobbies, and not by trying to take on this major undertaking ‘alone’.At Avail we are experts in transitions, valuations, and transition planning. We commit to personal attention andunprecedented customer service. We guide you every step of the way through the process and we never take forgranted the faith you have put into our team. So put your mind at ease and value our expertise. Life isn’t a ‘reality show’ and you shouldn’t have to endureunnecessary adversity and misery in order to receive the pay-off. Don’t be afraid, give us a call - I guarantee that youwill be far happier than if you try to do things ‘alone’.We're here for you!Call us anytime: 1-866-Go-Avail (1-866-462-8245)

YOUR TRUSTED INDUSTRY PARTNERDid you know that for over 2 decades, our Founder, Darren Shanahan, hasbeen in the dental industry as the "go-to" for other industry professionalsand leaders? Every phone call that comes into our office is about a dental or healthcareclinic. We don't work in any other industry.We provide owners with a "firewall" to protect them from all of the pitfallswe know are out there throughout a transaction because we know how toprepare the deal and navigate the waters. We're here for you.Meet Our TeamDarren ShanahanCEO & FounderYvette ShanahanCo-FounderLogan ReynoldsTransaction SpecialistJennifer LarocqueTransaction ManagerMorgan MinkusTransaction SpecialistQuestions?Call 1-866-Go-Avail (1-866-462-8245) orvisit: AvailDentalAdvice.com

THE DENTAL DESK MAGAZINEB Y A V AI 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.comSeptember 2023 Come back for Issue #14 which will reveal industryinsights, predictions and trends for the Fall.