Dental Practice R533 – North East Kansas

This well respected community general practice in the Eastern part of Kansas represents an expansive opportunity for a young professional looking to own and operate their own successful and well established dental practice. The current Owner and Dentist has been operating this business for over 37 years, but as the owner approaches retirement they have been taking substantial time off and are now currently practicing only 3½ days per week offering only basic dentistry procedures. General dentistry procedural services are the main source of business offered by this practice which includes; dental prophylaxis, restorative fillings, crowns and bridges, extractions, root canals, dentures, and partial dentures and restorative procedures for implants. Preventative procedures like x-rays, fluoride treatments, exams, sealants, etc. are also performed. The Owner has currently stopped performing endodontics, orthodontics and other long-term procedures to prepare the business and client list for sale. However, this suggests that these services display a considerable area for growth in the current practice as they represent the ability to practice more high income and longer term procedures with current and future clients. The current patient base of 1,700 clients (active files) and on average 10 new patients per month, offers the new owner a strong foundation to immediately earn a good level of cash flows. With the ability to take this practice to a full week coupled with light marketing, savvy social media and expansion of procedures offered there is clearly room for growth. Besides the owner/dentist, the practice currently employs 3 part-time support staff; a hygienist, and two rotating front desk receptionists / assistants. The sale would include all of the assets, equipment, supplies and the well-established patient list. The practice does have digital compatible radiography and a new Panorex. The business may not have all the bells and whistles but it does have a good recall system booked months in advance and long-time loyal staff to ensure a smooth transition and the owner is also willing to stay on to mentor and help transition the business. The real estate and offices are owned by the owner of the business and would be available to purchase separate from the valuation of the practice. This four-operatory general practice includes; 2 operatories used by the doctor and 2 operatories dedicated for hygiene, a reception area and waiting room, a doctor’s office, lunch room, plenty of storage and 3 restrooms (1 for clients). As the doctor nears retirement revenue has declined slightly due to reduced operating times at the practice (approximately 22 hours per week). Clearly growth can easily be achieved by the business in volume, higher dollar procedures and additional operating days and hours. Currently the practice delivers over $400K in gross revenues (2013) or an average of between $100K and $125K per employee (in line with industry averages). Net profit / income to the business is estimated to be >$75K which correlates directly with industry averages of 18%. Annual discretionary cash flow earnings to a single new owner, i.e. adjusted EBITDA, is estimated to be more than $180K (before any new owner compensation / remuneration), sufficient for a new outright owner to service any debt financing. The estimated value range of this practice from operations is between $150K and $260K (excluding cash, receivables, inventory, liabilities and facilities).

* Adjusted EBITDA = EBIT plus Depreciation and Adjustments (excluding Owners compensation)

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If you are interested in any of these offers or would like more information about the program or process, please contact Denton Zeeman at 785-864-8863, dentonz@ku.edu, or redtire@ku.edu.

 

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