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This podcast covers from START to FINISH How to Acquire a Dental Practice. Michael Dinsio, founder of Next Level Consultants has literally seen hundreds of deals as a banker in the industry & he has personally consulted hundreds of dentists as a Buyers Representative. Michael talks with GUEST SPEAKERS about Due Diligence, Legal, Demographics, and more... He invites experts to the show to help you avoid those headaches and heartbreaks. So start at the TOP w/ Episode 01 and work your way through the transition process. We break it down step by step in a true #UNSCRIPTED and genuine way.
00:00
Oh yeah! Here we go! Practice acquisition! There are pitfalls throughout the entire process.
00:20
I have seen a ton of these deals. If you want to buy a practice, this is how, folks.
00:31
Acquisition Uncensored, the truth when buying and selling a dental practice. And now your host, Michael D'Incio.
00:45
All right, guys and listeners, thanks so much for joining. We are getting this party started to the next episode. I'm your host, Mike Dinsio, founder of Next Level Consultants. We've got a really cool episode today that I'm very excited about. But just to recap what we're doing here in season two, this season, we're focusing on acquisitions. And today's episode is all about demographics.
01:14
To me, this is a really important step. I think a lot of people think about demographics and startup, but I think you're missing the boat if you're not doing this for an acquisition. It's always part of my program at Next Level to help buyers really dig into their demographics. But it's really kind of the first step before you start diving into the areas that you want to potentially buy a practice. so this is...
01:42
Like the episode guys, and I'll introduce our guests here in a second. This is the episode that really gets the process really started, So in a lot of ways it's step one. So without further ado, let me introduce the two guests for today. It's Kent Miller and Kevin Klingtschern. They are the partners and owners of Dentographics and the big partner of mine. send a lot of clients your guys's way and you guys do such a great job, but
02:12
Guys, welcome to the show and Kent, I'll pass it to you. Kent, give us like a second about what you guys are all about and don't go too crazy, we'll lose our audience. welcome to the show, brother. Yeah, thank you for having us. So we are Dental Graphics, which is primarily a dental data and market analysis company. We work only with dentists and we help you figure out where is the best area for your practice, whether a startup or acquisition.
02:41
Nice. Thanks, Kent. And Kevin, I know you're much more on the client side, Kent. definitely, gosh, I'm going to mess that up. Kevin, Kent, Kent, Kevin. You're not the only one. Kevin, what do you do for the firm, What's your role? A little bit more focused on sales, just driving revenue. Vendors like yourself, I work a little bit more closely with to just establish relationships and build the business that way.
03:10
So when a client reaches out, there's a good chance that Kevin's on the other side of it.
03:17
Can you repeat that? So when a client comes and reaches out to you guys, there's a good chance that Kevin's on the side of it, on the other side. Yeah, yeah. There's a very good chance I'm chatting. There is a human person on the other side of the website. You guys got a great website. It's very intuitive. So that's why I'm making it here. Yeah. All right. Let's just get right into it, guys. I'll start right off with the first question here. So just in general, guys, whoever wants to take this, roll with it.
03:47
Like what are the best practices for using a demographic firm like yourself for an acquisition? Just big picture, why would someone want to do a demographic deep dive into the areas that they're thinking about buying a practice? What's the- Yeah. Yeah. So of course, you know, when you're, when you're buying an office, you're going to do a deep dive into what that office looks like right now. What kinds of services they're offering, you know, how they're producing all of that. But
04:17
You obviously want to think about what might this practice look like in six months, a year, five years down the line, really, where can you take that practice? So maybe that doctor right now is really missing out on some opportunity in the area to offer cosmetic dentistry or to work with families. And so if you know who lives in that area and you see that opportunity, then you can take advantage of that. So that's really kind of taking those next steps as to where that practice is going to head.
04:47
that's the biggest reason for demographics for an acquisition. My lights just went off. Yeah, I think that's huge guys because anytime someone's doing an acquisition, sometimes docs get into the mentality of they're just going to maintain status quo, right? And just plug in by the practice, it's got hopefully good cashflow.
05:13
and they're happy with the performance because obviously that's what they're buying is the performance of practice. Instead of a startup, they're building it from scratch. You have to grow, different mentality. But actually not, right? Because if you buy a practice, you should always be thinking how you're gonna grow it. Because if you don't, you will see that attrition. There's always attrition in acquisitions, always.
05:39
Is that what I'm hearing you guys say is basically it's gonna help you guys, it's gonna help them give a roadmap of opportunity for the future. Yeah, yeah. So how easy or how difficult it might it be to grow that practice and specifically how might you grow that practice? What are the opportunities that are in that market? Throw out some stats that you guys provide for like a site specific site because you guys have a lot of reports. Throw out.
06:09
like a few things for that site specific. So I'm a client, I'm a buyer, I found a practice in San Jose, whatever. And I'm interested in this area. What are some like cool things that you guys can show them, you know, digging into the due diligence of that particular space? Yeah. So let's use your example of San Jose, which is one of the most competitive markets nationwide.
06:38
Um, you know, if you're thinking like from a due diligence process, should I even buy this practice? Is this a good decision for me? Um, we would of course recommend a single site study because we're going to look at, how competitive is this area? Maybe that doctor that has that practice right now is really knocking it out of the park. But maybe they've been there for 20 or 30 years and they've really kind of figured out that market and how it works. And they've been able to grow their office. And of course you're going to expect some attrition, uh, during that acquisition process where most practices do. And so.
07:07
We may be able to say, hey, look, doc, that practice is producing really well, but you might not have a lot of opportunity to grow it a whole lot more, or it might be at least a little bit more challenging, not saying it's impossible, but a little bit more challenging to grow here, because look, there are 800 residents per competing practice in this area. And in a typical market, we're looking for something more like 1,500, 2,000 plus. So it's just gonna be a little bit harder to grow. Other big factors that we're looking at, demographically, income, we're looking at age, we're looking at growth.
07:37
And so whether that's focused on kind of the service side, what sorts of services should you be offering or generically opportunity for growth, we're always providing some context as to what do these numbers look like in your area and then how does that compare to what else we see nationwide or locally in your market? That's perfect. And then just throw in there too. Yeah, go ahead, Kevin. Yeah, add to that, please.
08:06
We're also going to look at who are the competitors in that area. San Jose in particular, I like a lot of those existing practices that you'd come across, they've been there for a while and they might not be the most aggressive in terms of their marketing strategies. So that report also will look at, we call it the character of the competition. Are they kind of going nuts in terms of their digital marketing? And a lot of the more high growth markets, like your big Texas areas.
08:35
That is the case. A lot of those practices are super aggressive with their marketing. That's almost one thing that helps to offset the super competitive conditions of a San Jose is when you look at a lot of the practices, it's hard to really tell, you know, are they open? Are they probably looking for new patients? So that report would shed light on that too. totally, you totally beat me too, buddy. I was going right there. I love of the site, the site specific report because it gives you that.
09:03
that competitive landscape, like Kent, you just mentioned how many residents per dentist is very telling in itself. But then you guys take it to the next level, no pen intended, on my side of like, okay, not only these are how many practices are in the area, but what are they doing from a Google search?
09:27
like pay per click, Google AdWords, you guys give them a lot of that like marketing insight. So that's really, really smart. I think that's one of the best things about the acquisition kind of product that you guys offer. Now, you know, I think we've gotten into it. One of my questions was gonna be like, how do you use this data? And I think we've touched on this a couple different times already, and that is marketing to me. Like it's...
09:56
it's how do you take this data, this black and white like statistical data, how do you translate that into actionable items that will, that'll actually benefit you? And I think that's marketing, that's the easiest thing. Give me some examples though of like how you can maybe hand this report to a marketing company and then they could actually help us put together something smart to actually put a growth plan together. Like, like,
10:26
How to use the data. That's my next question is how to use it. think marketing is the easiest answer, but what are some other ways as well?
10:37
Yeah, so definitely marketing, especially when we were talking about character of competition. In some cases we might see, doc, so what we do is we survey the 20 nearest practices for their character of competition. We have a research team that mainly goes through and verifies all the competing practices, but then for the 20 nearest practices, we're going to say, okay doc, here's who they are, here's where they're located, here's what kind of marketing they're doing, here's what their SEO kind of looks like. And so,
11:05
In some cases you might see, the 20 nearest practices are all super competitive. So you're going to really need to kind of put the pedal to the metal just to keep up, just to compete, just to get on that first page of Google results. Right. Um, you'll hear a lot of people say, Hey, the first, uh, three results on Google get 90 % of the clicks. in some markets, just getting that top three to get into the 90 % of clicks is going to be a whole lot harder. And other areas, um, as Kevin mentioned, you on paper, it might look like there's a lot of competition, but then you realize, Hey,
11:35
Half the practices around here and Michael, I'm not kidding. Half the practice around here don't have websites. we see that. have three clients right now in Nebraska and they're super competitive areas. I think you've done some analysis on those two startups and it's shocking how little those, all of those dental offices are, how little they're doing. So you're thousand percent right. Yeah. Sorry. Interrupt. We tend to do that. We interrupt a lot on the show. Sorry.
12:05
Well, it is uncensored. And I think the other big thing is sort of branding, right? How do you want to position your practice in the market? Let's look at what the other competing practices are doing. Let's also look at who lives in the area. Now you don't have to target the typical patient of the area or the typical resident of the area. You can always work with just a segment of the population. And we have a lot of doctors who are interested in doing that. So we can kind of dig into, maybe doctor, the median household income in this area is $80,000 a year.
12:35
But actually it's a high income population living next to a low income population. And so there aren't a lot of households actually earning $80,000 a year. We just know that half of the households earn more and half earn less. And so when we start to dig into the data, we can say, you if you're targeting that $80,000 a year household, there aren't a lot of people in that area who meet that criteria. You actually want to target either high income or low income. And so there's really a lot that we can dig into in that site study because we're extrapolate or we're going beyond just kind of those high level summary data.
13:05
Love that. Kevin, anything to add to that? It's okay putting you on the spot, but what are some other ways that you could use this data other than marketing that you guys provide for an acquisition anyways? I mean, going off of the site study would be the area analysis and then the on-demand tools that we've built out. So those are going to be the ones that I'll... So we have a lot of doctors that come to us and they say like,
13:35
interested in purchasing a practice I know this much, but as to where, all I really know at this point would be the Bay Area. And then I think the uses of the area analysis and then the on-demand tools, which I've shown you before, those become super useful. Well, you beat me to it. So let's keep running with this, Kevin. My next question was, let's say we don't have a specific yet.
14:04
We've spent a lot of time today on the site specific data. So you have a prospectus, you send it to me. I like it. The cashflow is great. We're trying to put together a view of how to grow this particular practice. But there are so many people out there probably in listening the audience that aren't sure where to even start this process of how to find a practice or what areas that they should target in buying a practice, not starting.
14:34
in buying. Kevin, let's keep rolling with this. The area analysis is one of the best reports that I love. It's a great first step. let's talk about the area. What's the difference between an area analysis than a site specific? I mean, obviously it shows you the area, what about, give us the breakdown and then how to use that to find a practice. Area analysis is the report that
15:01
So we just offer two custom reports now, area analysis and then the single site study. The area analysis is you have a general area or a market in mind and you want to know, okay, within this market, what is the best place for me to either open a practice or target an acquisition? So an easy example would be, you know, I live in Austin, Texas, and I don't really want to leave the greater Austin area. Let's do a 40 minute drive time in any direction of Austin.
15:30
And then we would do that report and then that's all we know other than their practice strategy. So if they want to target, you know, like a family centric high income area, we'll take that and we'll say based on everything we covered, we recommend you target a practice to purchase in the following areas and why, right? Round Rock, Kyle, know, downtown Austin and so on. And then for the supporting reasons of, you know, they match your practice strategy relative to the overall region, they're underserved.
16:00
that type of thing. Yeah, no, I said study is, you hey, I've got a location in mind 123 Main Street. Is this a good location to either purchase or start a practice here? Yeah, the absolute home run in this is I found a practice and it's crushing it. It's a solid practice. It's making great money. And oh, by the way, the demographics are off the chart and there's plenty of opportunity to grow. Like that literally is a home run.
16:29
probably a unicorn, so folks don't get too crazy in this process because if you found a really solid practice that had harder, more competitive area, that doesn't mean it's a bad practice to purchase. It just means that it's gonna be a little bit harder to grow. But if it's a strong practice, strong practice, it. Startups, totally different scenario. So, okay.
16:55
So that area analysis really looks at an entire area and says, hey, these areas will be less competitive. These are more ripe to grow. These are going to be a little bit more harder to grow. But it just kind of gives you a lay of the land from probably a macro level, not a micro level. That's probably the best way of saying that, right? Yeah, that's pretty much exactly it.
17:20
piggyback off this, in that let's say that we have an area analysis now and we found four circles that are just awesome. How do you find a practice? I get that all the time with that data. And I think I have my answer, but do you guys have an answer there too? Yeah. And I'm curious to hear what you do, but you know, the first thing that a lot of doctors, the first place a lot of actors start is to reach out to brokers.
17:46
And hey, after six months of really not getting anything, they kind of realize, okay, this is a little bit harder than I thought. It's not as easy as buying a home and, even buying a home now is kind of hard. Contacting the broker and saying, Hey, I want to buy a practice. they say, okay, here, here you go. Here's one to buy. DSOs have a lot more money. It's tough to find the right practice for you. And so a lot of people will come to us and say, you know, where's the best area in Austin? Where's the best area in Seattle? And we'll give them the top areas.
18:15
And then what we'll do is we'll tell them, here are the practices in those areas. And because it's an acquisition strategy, we'll prioritize areas with more practices as opposed to a startup where all you for a startup is a piece of commercial real estate. That's not as hard as finding somebody who's already in an existing practice and says, yeah, I'm at the point in my career where I'm willing to sell. Maybe that's because they've been there for 20 years. Maybe it's because they're just moving cities or something like that, but there are far fewer opportunities. So we'll give them a list of those practices.
18:43
And then we have a lot of doctors who actually reach out to those practices, whether that's with a mailer or calling or some even visit in person and try their luck that way. It can be a little hardscrabble to be honest. Well, but okay, I'm glad you went there because my brain goes to, now that we have this really great data, wouldn't it make a ton of sense to buy a list or organically build your own list of doctors that you have targeted?
19:13
and literally start writing out letters to them and try to create a relationship or reach out. mean, you don't wanna be as, I mean, you could be as bullish as you want, but the point is, is with that information, you could find that home run that I was just talking about where it's great demographics and the practice, maybe I could convince this guy or gal to sell to me. So.
19:39
Then of course, you got to evaluate the practice, make sure it's a good practice that you can buy. But at least you know that that area is ripe for growing. So it's a perfect first start. Kevin, I see your wheels turning. Yeah, I mean, just to go back on it, it's again, it's relative to everything you looked at. So if we're looking again, like San Jose, it's a good example because there's not too many sub markets or pockets, what have you.
20:05
within that region that would really stand out. All of it is super competitive. So I think if you, again, you find a practice that relative to the super competitive market that is the Bay Area, if you can find a practice that's in, and again, I like the word sub market, but look at it in one that's just a little bit less competitive relative to the rest. I think you're definitely setting yourself up for success there. Totally.
20:30
I just want to remind everybody, visit us on dentaluncensored.com. We've got all of our episodes on there. You'll be able to see all of our interviews with everybody that we've done so far. dentaluncensored.com and we've got Facebook and Instagram. There's a hundred ways to get a hold of us. But thanks again guys for being on the program. Okay, so if you didn't want to...
20:57
get into a report itself. You guys have kind of a cool tool where someone can work like go in on their own and get like a membership or some kind of subscription. I don't know what you guys call it, but let's say somebody was, I'm sure we've got a lot of listeners out there that they're not sure if they want to go to Boise or San Jose or Texas Dallas. And they're just kind of all wide open and they don't want to buy all of these reports and spend a ton of money. So you guys have kind of bridged that gap, right? Of trying to figure out
21:27
like giving them these tools at their fingertips, right? Isn't that something that you have? Yeah. Yeah. Go ahead, Kevin. Kevin, you want to go ahead? Okay. So, so if you go to our website right now, you can get state and county level data for free. That includes demographics, that includes competition. You don't need to create an account or anything like that. You can see,
21:51
What does Travis County, Texas look like versus King County, Washington versus Clark County, Nevada? That data is all free and available at the click of the button. Now we also offer subscription products that allow you to look at areas. So if you said, okay, I'm interested in the Austin, Texas area on the fly, I want to see where would be the best area within my custom area of interest to start a practice or to buy a practice. Or I want to look at
22:19
I want to plug in a particular address. found a practice. It's at 123 Main Street. What does that area look like? You get that data back instantly. You can click around. You can see who the practices are. You can go to their websites. We've also categorized the practices based off of what Kevin was talking about with character of competition. Who are the offices? they doing a really good job with their SEO? Or do they maybe not even have a website? We also have schools on there. So you can kind of plan around your location strategy around schools.
22:47
Uh, other specialties, Hey, I'm a GP and I want to have a family oriented practice. So it'd be helpful for me to see where pediatric dentists are and find a location that's not well served by pediatric dentists too. Um, with the, uh, now that's all one, uh, feature that's kind of, uh, starting your search, um, applicable for both startups and acquisitions. We also have what we call practice finder. And this is geared more towards people who want to go that route of buying an office and haven't had any luck with brokers. So you can say.
23:16
Hey, I want to find a practice in the DFW area. And I want it to be in an area that's not very competitive, that has a median household income of $100,000. And instantly you'll get back a list of all of those practices. And so you can start going down that path of, Hey, let me get in touch with Dr. Smith over here, see if he's interested in selling his practice to me. And so that's a really cool tool. We've got a lot more coming down the pipeline on that practice finder function.
23:45
in the next couple of months that we'll be really excited to update. That is like one of my favorite pieces of it because, you know, the reports are so much data and you're not going to get all of that data with the subscription that you're talking about. But it's a great like data at your fingertips to where you can start mining some really great information so that you can kind of focus your efforts. So I think that's a great place to start if you're just like
24:14
hanging out up here, trying to figure out what the hell you're gonna do, that's a great first step. And then when you start narrowing, getting those reports that can really deep dive. Super cool guys. One of the last things I wanna talk about is there's a lot of demographic companies out there. One of my favorite things about what you guys have created and done is how you verify the offices in an area. I know any...
24:42
You know, there's a lot of data out there. Walk our audience around like, why is your data more trusted than others? Because I feel like the quality of that is really important to highlight.
25:01
Kevin, you wanna go Sure. Any practice that you see in our database or that gets included in one of our custom reports has been human verified, more specifically phone verified by a member of our research team at some point, which means that they've literally just made a phone call, outbound phone call to confirm that these practices exist. When you look at competition data, it all kind of starts from these really big, messy, unrefined
25:31
databases that it would be very easy just to put those numbers, assign them to whatever areas they fall within and say that's number of practices in an area. in reality, you'd be including a bunch of garbage, not literally garbage, but hospitals, prisons, dental schools, family health centers, things like that. And a lot of old dental practices that have since closed a lot of
25:59
locations that are literally just a residential address, but are tied to a dentist's home address. So things like that, as far as our competition data goes, somebody has gone through all of that, figured out which are the true existing competing practices. Do they have a certain type of specialist on staff? That might require additional research, such as like looking at the website and then manually noting, okay, you know, this practice has
26:26
a GP and then neurosurgeon and an orthodontist. So let's make sure we get those in there because at the end of the day, competition data, when we report or when we featured on our website or put in our reports, it's really important. So we really pride ourselves in going as far as we possibly can and providing as accurate as we possibly can of a database because we do know it's important. And we feel like that separates us from, you
26:55
any other firm that would offer a similar product? Well, I think that's huge because the fact that you guys are dental specific, you know the questions to ask, you know what the things to look for. So that's really important, right? That if you're a pedo and you're doing some competitive nature type stuff with marketing or picking a location, wouldn't you want to know?
27:23
If the GP down the road has a pedo on staff, maybe it's a bad example. sure. But even pedo, like we, you know, was as far as when we do a pediatric report, we would go, okay, obviously competition is first and foremost, pediatric dentists. Second to that would be any multi-specialty office in which we identified there to be a pediatric dentist on staff. And then in rare cases too, there are practices, there's not a ton of them, but they're very clearly kid first dental practices that are
27:52
a lot of the times, GPs are the ones that are doing the dental work, but clearly no adult would be receiving dental treatment there. So they would be considered competition in the pediatric report. Well, pedos in the audience don't get mad, but I'm literally coaching a GP right now who is focusing on kids. Of course, she can't market herself as a pediatric board certified, but her whole business plan is kids. So
28:21
That, that absolutely, Kevin, the fact that you know that and you're describing that and makes you guys specialists in your industry. So hopefully you guys, the audience understands how, how seriously these guys take their data and you can pull a census report. Sure. But obviously they're not deep diving into this stuff. I love that you're actually calling and looking on their website and making those notes because that
28:49
You know, of course there's gonna be bad data. mean, it's data, but their mission is obviously to try to keep it as clean as possible. finishing this interview up as quickly as I can, because I know I only have so much time to keep people's attention, but give me a top three markets in the country. Go, Top three, go. Oh man, all right. Top three in the country. I think I'm gonna have to go with
29:19
Dallas, Houston, oh boy. Dallas, Houston to Texas, okay. Yeah, I know, I know. And the third one's gonna be in Florida. It's either gonna be Tampa or Orlando, I hate to give you four. But those are the big ones. Those are big cities with a lot of growth. Of course it depends on the doctor and everything's different. Hey, where's my West Coast representation?
29:48
Go West Coast, top three in the West Coast, go. Oh man, all right. West Coast, I'm gonna go Phoenix. Seattle, fun. Yeah, lot of growth in both those areas. Yeah, Seattle, once you kind of leave the city, you get out east a little bit. There's a lot of growth out there. So, Phoenix and Seattle. Nice, all right guys. Well, super fun interview. I hope our audience got a lot out of it.
30:17
Check the, check below. We're gonna have all of these guys information, the website. Guys, please share this all on your channels. We're gonna get this out, but feel free to reach out to Kent and Kevin directly and get some of these tools at your fingertips because I'm telling you there's a process to getting into ownership. Buyer or starting and.
30:46
To me, information is power. It's a cheap insurance. The cheapest insurance there is, what these guys can provide. It just gets you on the right step. And so, couldn't endorse these guys more. So thanks again, guys, for being on the show. I had a ton of fun. Likewise. Thank you. Thank Yeah, thank you. Appreciate you at the time. thanks. Hey, Michael. Appreciate it.
31:10
Tune in next time for another truth-filled episode of Acquisition Uncensored. We want to hear from you. Interact with your host, Michael Dinsio. Follow us on Facebook and YouTube. Comment and subscribe.