Episode 49 - Selling Your Practice: Talking with Jonathan Martin, CPA from McGill & Hill Group

June 28, 2023

In this installment of The Golden Age of Orthodontics, we are hosting Jonathan Martin, an expert assisting dentists during the transition phase of selling their practice. With a remarkable record of overseeing dental practice sales totaling more than a billion dollars, Jonathan imparts invaluable insights into the intricacies of selling your practice. He shares four essential elements determining the success or failure of an enticing offer to acquire your business. There’s never been a better time to be an orthodontist.


  • (01:01) Introduction of People and Practice and its message and Jonathan Martin’s background. 
  • (03:27) Jonathan describes how the economics have impacted the sale of dental practices and explains EBITDA in detail. 
  • (11:09) What are favorable KPSs, and how cash comes into play on an offer. What things have changed in the last 12 months? 
  • (15:39) How do cash, stock, hold-out money and seller financing impact your sale? 
  • (22:00) What are the critical items to evaluate as you are looking at an offer to purchase your business? 
  • (24:28) Jonathan discusses whether a seller would receive more money from a DSO or an OSO versus a private transaction. 
  • (29:51) What should a Dr. do if they receive unsolicited offers from a DSO or an OSO? 
  • (33:53) The bottom line is to do your due diligence and get professional help. 


  • Inflation, labor costs and the interest rate rise have slowed down dental practice sales.
  • Cash at closing, stock, holdback money and seller financing comprise the four components of an offer to purchase your practice.
  • Hire a professional to look over the contract when you are selling your business.

Achieving practice growth isn’t as simple as it used to be. But with groundbreaking technology and new communication channels to reach more patients, People + Practice is an orthodontic marketing agency that firmly believes that there’s never been a better time to be in practice. 


What follows is an AI-generated transcript. The transcript may contain errors and is not a substitute for watching the video.

Dr. Leon Klempner: Have you ever thought of selling your practice to an oso or a dsso, or if now is the right time to do that? Did you ever wonder how much money you would actually get for your practice? I. If so, this episode is for you.

Narrator: The future of orthodontics is evolving and changing every day, but although the way to achieve practice growth has changed, there's never been a better time to be an orthodontist. Let's get into the minds of industry leaders, forward-thinking, orthodontists and technology insiders to learn how they see the future of the orthodontic specialty.

Join your host, Dr. Leon Klempner and Amy Epstein each month as they bring you insights, tips, and guest interviews focused on helping you capitalize on the opportunities for practice growth. And now welcome to the Golden Age of Orthodontics with the co-founders of People and practice, Dr. Leon Klempner and Amy Epstein.

Dr. Leon Klempner: Welcome to the Golden Age of Orthodontics. I'm Leon Klempner, retired board certified orthodontist, director of orthodontics at Mount Sinai Hospital, faculty at Harvard Ortho, and of course the c e o of people and practice.

Amy Epstein: And I'm Amy Epstein. I have an MBA in marketing and 20 years of public relations experience, and we co-founded people in practice together about 10 years ago.

We are a digital marketing and growth consultancy for orthodontists and dental specialist. A big part of what we do is work with practices to ensure they're communicating their transitions effectively to all their stakeholders. Whether it's a retirement, there's an associate joining, they're selling the practice, there's a new office opening.

Each of these milestones really needs to be addressed to all audiences. Patients, potential new patients, referring doctors, um, you know, not only to manage risk, uh, but also to capitalize on the marketing opportunities that these transitions hold. So we work really closely with the Roger K. Hill and company and in in particular, Jonathan Martin who's going to be joining us today.

We work closely with them on a lot of shared clients who are going through these types of transitions. So we're really pleased to have Jonathan here today. Jonathan Martin has over 15 years of experience guiding dentists and dental specialists through. All sorts of transition processes in that time.

He's helped over a thousand doctors build successful transitions with both individual doctors and also with DSOs and Osos. He's overseen over a billion dollars of dental practice sales. He earned a bachelor's degree in both accounting and finance, and a master of accountancy from U N C at Charlotte.

He's a member of the American Institute of Certified Public Accountants. And the North Carolina Association of Certified Public Accountants. Jonathan, welcome to the podcast. Thank you so much for being here today.

Jonathan Martin, CPA: Hey, Amy. Hey, Leon. Thanks for having me.

Amy Epstein: So, let's get right into it. Uh, you know, we work together with clients, so we're, we're on the phone and text messaging here and there, but can you give our listeners a sense of what the.

Corporate landscape looks like right now and how the economy is affecting things.

Jonathan Martin, CPA: Yeah, so things have definitely changed over the last 12 months relative to the, you know, 10, 12 years leading up to this point. I mean, year over year, at least with regard to, you know, corporate sales, sales to, uh, DSOs or Osos.

Um, you know, we saw year over year increases in the number of transactions and in the. Economics of those transactions, you know, whether you're talking multiples or valuations, you know, those numbers have trended upwards on a constant basis over, like I said, the last 10 plus years. And that all came to a screeching halt, uh, mid last year, as, you know, kind of a trifecta of things happened.

Um, You know, obviously inflation, uh, you know, the cost of labor skyrocketing. Um, and the big one is the cost of money. You know, interest rates have gone up consistently as the Fed continues to raise rates since about mid last year, which made. Money more expensive. And so, you know, kind of looking at things now about a year removed from, you know, when things all started to change, deal flow out there is definitely down.

When I say deal flow, just, you know, the number of transactions that are happening. And, you know, that's not just something we're witnessing. I mean, we're hearing that across the boards from, you know, other folks who do what we do from attorneys who are actually, you know, carrying these transactions, you know, across the finish line.

Um, deal flows down. And because, you know, every group is reacting differently, that's not the case with every buyer out there. When I say group, I mean, you know, the actual osos or DSOs that are buying the practices. Um, Everyone has responded differently depending on their own economic circumstances. You know, some groups are, you know, pretty flush with liquidity and they're still buying practices at a, you know, a pretty good clip.

And, you know, the, the money that they're paying for practices, the multiples, uh, the enterprise values are comparable to what we were seeing, uh, in early 2022 before things kind of started to turn the other way. Um, Other groups on the other end of the spectrum. They've completely halted all acquisitions activity.

Um, so, you know, we've seen some groups out there lay off their entire acquisitions division. Um, they are not for the foreseeable future acquiring any practices. Um, and so, you know, as interest rates go up, that puts downward pressure on values again, because money's more expensive. When you add on top of that, just y you know, the, the, the number of buyers out there.

That are actively acquiring practices is down. Um, overall, we've just, you know, we've seen a decrease in the number of transactions going on, the number of groups that are buying practices and a slight downturn in, you know, in the metrics. Like if you talk about multiples of ebitda, um, you know, it depends on the size of the deal overall.

You know, how much EBITDA your practice has. Um, but we have seen multiples come down a little bit. Long-winded answer to your question, but hopefully that kind of. You know, scratch the surface at least. Mm-hmm.

Amy Epstein: Yeah. We're kind of seeing that on the ground.

Dr. Leon Klempner: We are, we are. And, and Jonathan, you know, as a marketing company, we're approached by, uh, orthodontists all the time that our, uh, thinking about transitioning their practice and, and particularly are interested in.

In the valuation they may be getting, uh, you know, from a dsso sale. And could you, uh, uh, spend a minute or two and just talk a little bit about, uh, ebitda, what that means and, and some of the other KPIs or indicators that a Dsso or s o would be looking at to determine whether that practice would be one that they'd be interested or not

Jonathan Martin, CPA: interested in.

Yeah, so if you're considering going down this road, it, it's important to know what EBITDA is because the, the value that you can hope to achieve or get in the sale of your practice hinges, you know, largely on that number. So, you know, EBITDA is essentially what's left after you pay overhead. And after you pay reasonable doctor compensation, because you know, it's always an expectation in these deals.

Well, I should say in almost all of these deals that the doctor's going to commit to sticking around for a post-sale period of between three to five years, in most cases, five years. Okay. And in sticking around, they're going to pay you. To maintain your clinical responsibilities. So EBIT does what's left after you pay overhead.

So you know, you're talking rent, utilities, staff salaries and wages and benefits, uh, supplies, lab fees, you know, all your legitimate. Overhead expenses, so not things like your personal automobile, your big pension or cash balance plan contribution, not the, you know, the money that you're paying your family members who don't really work in the practice.

All that stuff gets removed. So after you pay overhead, after you pay doctor compensation, EBITDA is what's left and a group is gonna pay you a multiple of that number. Uh, a lot of people. Get hung up on that multiple, you know, and that's the numbers that typically get spread at the, you know, the cocktail parties or, uh, you know, the meetings where everybody's talking about what deal they got.

People like to throw around multiple. It, it's also the area where there's probably the most confusion or at least misconception, um, about the multiple that most doctors are actually getting. And, and we can talk about that a little later. Um, but, you know, a, again, a group. Is going to pay you a multiple of that EBITDA number.

So y you know, both of these numbers are important, not just the multiple that you're getting. You know, obviously you want the highest number possible. You know, if you're getting seven times your ebitda, that's better than getting anything less than that, right? So you're, you're looking for the highest multiple.

But where a lot of doctors get lost is you're also looking for the strongest ebitda. Um, and you know, a lot of the deals that we see are. Unsolicited offers where the DSO or the Oso approaches doctors individually and makes an offer on the practice. And in doing so, you know the group is actually calculating your EBITDA for you.

And so they're aware that multiples are. You know, talked about, discussed amongst doctors, and that doctors are well aware of what the multiples should be in general, so they're happy to give you a multiple. That sounds about right. The question is, is it a multiple of an accurate EBITDA figure? Uh, and, and, and again, that's where we see.

Some of the biggest issues with these unsolicited offers is, you know, you're relying upon a buyer to calculate your ebitda, to tell you what your profit is, and then getting a multiple based upon that. In many cases, those EBITDA calculations are inaccurate. Um, so, uh, before I get too far off topic, I know I addressed part of your question, Leon.

You asked what EBITDA was. I think you had maybe one or two other components of your question. So, uh, remind me of what that was. Yeah,

Dr. Leon Klempner: yeah. Yeah, I, I just, uh, like what KPIs, what, what would they look at for an attractive purchase? Were they looking at trends, production going up, uh, starts going up, or, you know, what, what, what, what, um, KPIs, I guess, would an orthodontist need to bulk up if they're thinking of making their practice attractive for a, uh, an

Jonathan Martin, CPA: oso.

So historically I will say groups were looking for larger practices. So, you know, they wanted to see practices with income over one and a half, 2 million more than six chairs. Ideally, um, you know, a margin, an EBITDA percentage you could say of at least 20 plus percent. Um, That's still largely the case, although as you know, the consolidation has continued.

You've seen a lot more diversification, not only in the types of groups out there, um, but the types of practices that they're willing to entertain. So there are exceptions to those rules. You know, there are groups who are willing to kind of get outside of that. Comfort zone and buy practices that are maybe a little smaller, um, because maybe they already have a presence in the area.

But generally speaking, groups are looking for the same things that if you're an individual looking to buy a practice, you should be looking for. I mean, ideally you're buying a practice where production exceeds collections because that shows a. Know, a growing practice, you don't wanna practice where collections exceeds production because that portends, you know, an atrophying or, or or dying practice.

Um, you know, you wanna buy something that's growing. You wanna buy something that's efficient. You know, an orthodontics, ideally you have an overhead rate that doesn't exceed 55, 50 6% of collections. Um, you know, those, generally speaking, are the things that you like to see, you know, contract. Balances that are between, you know, 40 and 60% of collections.

Um, because you know, if you're outside of that range, it might mean that you are taking a lot of prepayments, which means whoever's buying the practice, the group included, is gonna be responsible for doing a lot of work that they're not gonna get paid for. Um, so that, that would say is the general hit list.

Um, uh, but you know, like I said, there are also exceptions to those rules, so, Mm-hmm.

Dr. Leon Klempner: So, Jonathan, you know, I've heard, uh, a variety of different ways that an oso will pay out. That it, that, uh, you know, payoff, uh, some, uh, you know, are cash or part cash, uh, then there's stock, there's holdbacks. Could you talk a little bit about, you know, what the terms of the deal would be?

What would be most attractive for a seller? And have you seen any changes over the

Jonathan Martin, CPA: last year or two? Yeah, so I mentioned earlier, you know, doctors or sellers kind of tend to focus on that EBITDA multiple or the total enterprise value, and you know, that's honestly where the buyers would prefer your focus to be, not on what you're talking about here, which is you know the details, right?

The structure of the deal. A group will gladly pay you whatever multiple it is you're looking for. If you let. Them structure the deal the way that they want to. And so, you know, when you are selling to a DSO or an Oso, there's really only a handful of things that comprise the enterprise value, the purchase price that they're paying you for your practice.

Biggest one, ideally is cash. And I say ideally, you know, most doctors who are doing this are looking to get as much cash at close as possible. That's not everybody, but most doctors. So usually that's the biggest component. Um, Prior to mid 2022, it was pretty, pretty much a foregone conclusion that you could get to around 80% of the total purchase price paid in cash at closing.

Uh, as interest rates have gone up and money's gotten more expensive, you know, groups aren't as, Quick to get to 80% cash is at at close, and you don't see that as often. It's not a foregone conclusion anymore. So one of the big changes is that, that we've seen over the last year is a reduction in cash at close.

I mean, it's not uncommon these days to see deals where you only get. 60, 65, 70% cash at close. So, you know, a reasonable expectation anymore is really getting to 70, 75% cash at close is, is probably in the comfort zone for most buyers. Um, the important thing for any seller is that, you know, in, in evaluating these types of opportunities, you know, Where your focus should be, right?

It, it may not be that you need to get as much cash at close because you've done well financially in other areas, and y you know, you have a little more wiggle room to roll the dice a little on other components, like what you mentioned, um, stock being the big one. So again, the first component is cash.

Second component we'll talk about is stock. Uh, and there's probably more variability in this particular term than in any of the other terms of the deal because stock in one Dsso or Oso isn't necessarily the same as in any other D s O or Oso. Um, and honestly, I mean, we do lectures on this and I could talk for, you know, two to three hours just on the stock component itself.

But just to kind of give you a general overview, I. Generally speaking, when you take stock in one of these organizations, it's going to exist in one of, at one of two levels. It's either going to be at the DSO or Oso level. So, you know, think, uh, let's just take Heartland for example, cause everyone's heard of that one.

They're the 800 pound gorilla out there. So, Heartland is the actual d s O at the top of, you know, you could call it a triangle. Okay. So all of the operational support exists up there and is provided to the individual practices that exist at the bottom of the triangle. Okay. And each individual practice has its own bubble, let's say at the bottom of this triangle, with Heartland being the big bubble at the top.

So with certain DSOs or osos, the stock that you take exists at the big bubble. At the top, it's in the actual DSO or oso. Whereas with other organizations, the stock that you take can exist down at the practice level. So let's say if you sold your practice and got 80% cash at close and took 20% stock in your individual practice, you really only sold 80% of your practice.

You're retaining a 20% stake in your individual practice. So again, in some of these deals, The stock exists at the D S O O. So itself, some of them, it's at the practice level. In some cases it's in a combination of the two. You take some stock up here, you take some stock down here, and where that stock lives, the stock that you take can have different meaning from group to group.

You know, in most cases, if you're taking stock at the practice level, you're going to re receive on an ongoing basis a proportional share of the distribution of profits. You know, so let's say your EBITDA is a million bucks a year and you're retaining a 20% stake in your practice. In theory, you're entitled to approximately $200,000 of that EBITDA per year on an ongoing basis.

So, Not all groups though pay out profits. You know, in some cases you might take the stock at the practice level, but they don't pay out distributions. They keep them in-house and use them for growth purposes. In most cases. They do pay them out, but they're also not required to pay them out. And that's where, you know, document language in these transactions is very important because, you know, all of these entities are structured as flow through entities.

I'm kind of getting deep in the weeds here, but this is an important point. Um, As flow through entities. So they're either, you know, LLCs or S corporations, and if you're an owner in an LLC or an S-corp. Whatever the profit is or your share of the profit, that's gonna end up on your personal tax return.

You're gonna owe taxes on that money, whether those distributions are paid out or not. So you know, it's important in the legal documents, in these arrangements that you ensure that you have the. Ability to get paid out at least enough profit to cover your tax bill. So, all right, I I, I won't go down the rabbit hole quite as far on all these terms, I promise.

So we covered cash. We covered stock. Uh, a a, another one is hold back money. So think of that as cash that is not paid out at closing, but rather it's held back and paid out over time and usually it's paid out over a time. That follows whatever post-sale commitment period you agree to. So you know, if you agree to stick around for five years post-sale, usually that holdback money is held back and paid out evenly or in equal installments over the five-year period.

Now, Ideally this is not part of your deal and this is something that we've seen largely go away. Um, you know, prior to say 20 17, 20 18 deals were really just comprised of two components, cash and holdback money, cuz that's how they kept you attached is, you know, dangling that holdout money out there that the only way you got it was to, you know, stick around and maintain practice performance.

By the time Covid hit, it had largely gone away. It came back when covid hit just due to the, you know, uncertainty that was out there kind of disappeared as things settled down, we are seeing it start to pop back up though in certain deals. Um, so ideally this is a term that you don't want factored in because it just introduces risk.

I mean, you have to continue to perform in order to get this money. Uh, if the practice declines, if it atrophies, which. Uh, you know, I think nationwide is something that orthodontics is faced with right now. And depending on which resource you look at, I mean, I think on average practices are down seven to 10%.

So in, in economic situations like this, you definitely don't want hold back money, you know, at stake when you know that growth or lack thereof may not be as much in your control once you've sold. Mm-hmm. So last term is, Seller note. Um, so basically seller financing and, and this is y you know, kind of termed differently from group to group.

In some cases. You know, we see it, uh, referred to as preferred equity. It is not equity. Uh, it's essentially a seller loan. Uh, it's money that, you know, they are essentially borrowing from you and agreeing to pay you a reasonable interest rate. But it isn't secured by anything. It's an unsecured loan. So, you know, usually the bank lends somebody money to say, buy a car.

They have a lien on that car. You default on it. They repossess the car. Okay? In this case, you're lending the Ds O or Oso money, and it is not secured by anything. So they hit hard economic times, you know? That's the first thing that's gonna go is any payments to sellers. So again, those four components, cash at close, stock, hold back, money, and uh, seller financing.

Those are really the four components that comprise the offer that a group is making to buy your practice. And, and the reason that is so important is because if you're looking at an offer, You know, if you have multiple offers on the table or just one offer on the table, in a lot of cases, those offers will throw out a multiple.

They'll throw out a purchase price that's in big, bold letters in different color throughout the presentation, throughout the PowerPoint slides, or the letter of intent, or however it's being, you know, relayed to you. And in many cases, that number. Has been conflated with other terms that really aren't part of purchase price.

This is one of the biggest issues that we see. You know, they'll have a big, very attractive multiple or purchase price in the offer, but baked into that number are. Four years worth of compensation that they're paying you post sale or the rent that they're paying you for owning the building. In some cases, you even see things like expected, uh, investment returns on the cash component that you invest over five years.

So, If you are looking at offers from these groups, you really want to narrow in focus on those four terms and what those total. Okay. And when it comes to stock, what's the current value of it? Not the projected future value. Mm-hmm. Cause we see a lot of crazy projections when it comes to that part term.

Amy Epstein: Yeah, that's a lot to tease out. I mean, that's really, it's a lot to consider. Um, and it's good that there are, uh, you know, people like yourself who can guide sellers, practice owners through this because, uh, yeah, it's, uh, it's a lot. And it sounds like it's also changing pretty quickly. Um, over time we're talking about, you know, um, Cash at close or stock hold back, like, you know, we're seeing it again.

We're not seeing it again. I mean, these are things that are happening at like a six month clip. So it sounds like it's not only, uh, pretty complicated, but also dynamic. Um, you know, Jonathan, a follow up question for you, which is, you know, we talked about practice valuations right now and depends on who you're talking to, but things may look sunnier later this year, but so far.

It's been a bit of a challenging first quarter at least. Are when you're looking to potentially sell, are the more corporate entities paying more than you would maybe get in a private sale, or is that just a perception? Uh, what, what's your take on that?

Jonathan Martin, CPA: Uh, so that's, uh, It depends, uh, which is of course the preface to another long-winded answer, so I'll apologize.

Um, so if you look at, you know, doctor to doctor statistics, you know, what practices have sold for historically in, in private sales? Um, those numbers have increased over the years. Um, you know, there was a time where average practice sold for. 70, 75% of revenue these days, the average ortho practice is closer to 85% of revenue.

You know, 82, 80 5% of revenue. Um, but that's just an average. Okay. Um, you know, the average home in the United States probably sells for what, $300,000. What does that have to do with the value of your house? I. Nothing, right? Mm-hmm. So same logic applies here, but a lot of people like to kind of use reverse logic.

Hey, if the average practice sells for 85% of revenue, then your practice is worth 85% of revenue, and it just doesn't work that way. Mm-hmm. And, and kinda what, what makes that even more clear is when you look at the spectrum, you know, last year for example, uh, I think the practice that we worked with that was.

The least valuable, at least as a percentage of revenue sold for around, you know, uh, 50, 55% of revenue. Okay. Had high overhead. It was a smaller practice, older equipment, you know, there were justifiable reasons that this practice was worth below average, you know, a, a amounts. Mm-hmm. On the high end of the spectrum, you know, the biggest practice that we worked with that sold.

Yeah, as a private sale, you know, doctor to doctor, it was about 138% of revenue. Okay? Again, Completely justifiable. The practice had about, you know, a 39% overhead rate, which meant it was, you know, 16, 17% more profitable than the average ortho practice brand new equipment. One of the, you know, multiple facilities was brand new recently, upfitted, I mean, it, it cash flowed to justify that value.

So, you know, generally speaking, Practice values have been trending upward for years at this point. Um, and that's despite private practice ownership. It being down. Mm-hmm. You know, unfortunately, the a a o does not publish statistics specific to orthodontics, but the a d a, uh, does publish, you know, statistics for dentistry as a whole.

And, you know, if you, if you check out those statistics, uh, private practice ownership is down pretty dramatically over the past 10 years, especially, you know, with regard to, you know, the younger age demographics. And so, you know, Obviously supply and demand have a huge impact on the value of anything. And if, you know, demand is down for practice ownership amongst individuals, you would think that practice values would be down as a function of that.

But what has prevented that from happening is just the, you know, uh, continuously surging demand from DSOs and Osos to buy practices. Um, and, and that hasn't only pushed up. You know, practice values, but it's also pushed up, you know, doctor compensation, you know, an average, um, you know, orthodontic associate is making dramatically more today than, you know, the average associate who's graduating, you know, just five, six years ago.

So, you know, practice values are up, but I, I guess what you were asking about is, hey, do all practices sell for more if they're selling to a dsso or oso than they would to an individual? Exactly. And that's really not the case. Um, you know, it really depends on the practice because I said earlier, it all hinges on that EBITDA figure, you know?

So if you've got a practice that has, you know, a 15% EBITDA margin, Okay, so EBITDA is equal to only 15% of the revenue of the practice. And you know, let's say that practice sells for, you know, six x, well by my math that's, you know, six times, 15% is 90%. You know, that's 90% of revenue. That's not dramatically more than the average that I just threw out of 82 to 85% of revenue.

And then when you factor in the fact that, you know, you're probably only gonna get. 70 to 80% of that amount in cash. You know, it's, it is not accurate to assume that every practice can sell for more to a DSO or oso, and a lot of that is just perpetuated by the stories that tend to get shared. You know, nobody goes to the cocktail parties and brags about selling for three and a half x or selling for, you know, 90% of revenue.

You know, those stories that you hear about are the, you know, the guy or the. The, the, the doctor that sold for 350% of revenue and sold for Aex and got, you know, 95% of it in cash. So a lot of that is just misinformation that's perpetuated out there and, and that really should alarm doctors and, and make them question who's perpetuating that information.


Amy Epstein: So, uh, Jonathan, we on this podcast have a, uh, tradition of inviting our listeners to share questions if they have them for our guests, and we'd like to do that now, if that's okay.

Jonathan Martin, CPA: Sure. My name is Ben Greg. I own Greg Orthodontics and Ashland and Worcester, Ohio. What should doctors do if they receive unsolicited offers from DSOs or Osos?

That's a great question. Um, one that, you know, frankly, more doctors should be asking just because almost every doctor out there at this point has been approached or has communicated with A D S O or Oso. Um, and, you know, buyers would love for nothing more than for sellers to. Except offers before engaging, you know, professionals to advise them.

And you know, there's nothing immoral about that either. I mean, there's nothing wrong with a buyer of anything, trying to get something as cheaply as they possibly can. Right. That's just the way things work. It's also, there's nothing wrong with a seller trying to get as much as they possibly can when they're trying to sell something.

Um, you know, the problem with the unsolicited offers that we see is, you know, usually there anywhere from 30 to a hundred percent below where they should be. Um, and that's a combination of factors. Either the EBITDA calculation is understated, the multiple isn't where it should be, or, you know, the overall deal terms being proposed aren't really, uh, What they are.

Um, I guess they're not really reflecting the value that the doctor perceives, if that makes sense. They're misleading, in other words. Mm-hmm. Um, and, you know, we hear about doctors, you know, who are, you know, newsletter subscribers or the advisory above my head, um, who, you know, maybe went off and, and sold to a DSO or an Oso and they, you know, Didn't necessarily have, uh, they didn't do their own due diligence and determine if it was the right.

Move for them because it's not a good solution for everybody, nor is any transition alternative. You know, a partnership isn't a good fit for everybody selling to a Dsso or Oso not a good fit for everybody. So, you know, usually the horror stories that we hear are doctors who did it. They didn't evaluate their own personal financial situation to figure out if it was a good fit and they didn't work out.

They didn't work with somebody to find out if the deal they were actually getting was a good one. Um, so, uh, I guess my recommendation, if you're, if you, if you have an unsolicited offer, if you've been approached by a DSO or an oso, understand that if you've talked to one Oso, if you've seen one O Oso, You've seen one oso, right?

They are all different, just like all individual buyers are different. Mm-hmm. Um, and y you know, whether it's the economic terms or the cultural fit, the treatment philosophy, the management style, um, you know, the work environment, it's going to differ from group to group to group. Uh, and just assuming that, You know, the first group that approaches you is going to be the best fit.

That's a dangerous assumption because at the end of the day, all of these folks who work for these groups, they are salesmen. And if you didn't like them, When you met them, then they wouldn't be very good at their jobs, okay? Their job is to be likable and to convince you that, you know, they're the best organization with whom to partner.

And, and there's a lot of organizations out there that are in fact, very well-run businesses, good organizations with a very high success rate. Um, but the only way that you can be certain you're getting the best deal that you can with the best fit is to talk to more than one group. So just understand that if, if you get approached by a group, That's one group, and the offer that they're giving you is probably not anywhere close to the best offer they're willing to give you.


Dr. Leon Klempner: are some of the biggest mistakes you're seeing doctors do, but I think I know the answer to that already. Uh, one is, uh, you need to talk to more than one o s o, and, and two is you don't want to go into this alone. Is that, uh, pretty much the, the, the, the fatal mistakes that you've seen in your career?

Jonathan Martin, CPA: Yeah, I, I couldn't have said it any better myself. In fact, I would've probably said it in a lot more words than you did, so thank you for wrapping that up more quickly,

Amy Epstein: Jonathan, thank you so much for being here today. Every time we talk to you, we learn something and we're really glad to share your knowledge with our listeners today. If those who are watching and listening want to learn more about the Roger Kayhill Company, Roger Kayhill and Company. Or to learn more about your services or working with you, how can they get in touch?

Jonathan Martin, CPA: Yeah, so, uh, Roger Cahill and Company is the Transitions Division of the McGill Hill Group. Um, so, you know, we provide transition services that cover the spectrum, whether doctors are looking to sell their practice to an individual, whether they're looking to bring in an associate leading to partnership, uh, or looking to sell to a group like this, A D S O or an O S O.

Um, you know, we provide services, you know, fit to the doctor's needs, um, as opposed to trying to, you know, force people in a box and focus on one particular alternative. Uh, so we've been doing that for over 40 years. Um, you can always find us at the McGill hill group.com. Um, you can email me if you have questions at jonathan dot martin McGill hill group.com, or just give our office a call at the number on the website.

Amy Epstein: That sounds great. Well, we appreciate you being here. We look forward to having you back again.

Jonathan Martin, CPA: Hey, thanks guys. Y'all have a great one.

Amy Epstein: You too. This episode is powered by Dental Monitoring. There are lots of remote monitoring companies, but we feel strongly that the differentiator with dental monitoring is the ai.

So whether you're a practice that's offering aligners or brackets and wires, uh, dental monitoring lets you make data-driven decisions about treatment, but also provides insights to let you refine the workflows in your practice so that you're more efficient and effective. All key components to growing your practice and positioning your practice really well.

Whether you're going to prepare to bring on a partner, an associate, or you know, talk to Jonathan about a transition in the near future. So to learn more about dental monitoring, visit our [email protected]. Navigate to our partners page, and you'll see dental monitoring with more information and also an inquiry form that you can fill out to reach one of their folks.

You can subscribe or download other episodes of the Golden Age of Orthodontics on Apple Podcasts, Spotify, sound, cl, SoundCloud, and if you'd like to see all of our lovely faces, YouTube or wherever, get podcast. And if you enjoyed it, we'd appreciate you telling a colleague. For more information about our company, ppl practice.com is our website.

Or you can go to the website and ask Leon questions directly through the chat. It goes right to his phone and he will actually answer those questions.

Dr. Leon Klempner: And just a quick reminder that we're launching a new podcast called Practice Talk hosted by our very own. Lacy Ellis this month. Uh, it's designed for team members, so let your staff know They can subscribe and listen anywhere.

Our first episode will focus on dealing with difficult patients, so I think all the docs would be interested as well. If you like to contact me directly with any marketing questions, shoot me an [email protected] and remember. For forward thinking orthodontist. It's never been a better time to be an orthodontist.

We are in the Golden Age. Take advantage of it.

Narrator: Bye for now. Thank you for tuning in to the Golden Age of Orthodontics. Subscribe now on Apple Podcasts, Spotify, or visit our website at the golden age of orthodontics.com for direct links to both the audio and video versions of this

Jonathan Martin, CPA: episode.

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