Latest / Orthodontic Products Podcast / Marketing Strategies for Selling Your Practice
Transcript
- Alison Werner (00:11) So in this episode, we're going to look at how your marketing and communication strategy needs to change as you prepare to end your career or hand off your practice to a new owner. So we're going to talk about what you need to do to plan for a retirement or sale, communication strategies to ensure that smooth handoff and the importance of potential rebranding during that transition. So with me again is Dr. Leon Klempner. Thank you, Dr. Klempner for joining me again. Leon (00:38) Glad to be back. Alison Werner (00:39) All right, so what are the considerations that should be thought about when you're looking into your exit strategy? Leon (00:46) you So, you know, I think of the analogy of selling your house if anybody's ever sold a home before. So when you're towards the end of your career, and I've been there so I can speak from experience, you know, the goal is selling the practice. You know, you've worked hard for all of your career to build up some equity. And whether it's, whether you're selling to an associate or a partner or to a DSO or an OSO, Alison Werner (01:00) Yeah. Leon (01:17) You know, one of your biggest concerns should be to shore up the business so that you can make the largest profit from your life's work. So any smart exit strategy should include an increase, not a decrease in your marketing budget. Alison Werner (01:34) So talk to me a little bit more about why a doctor looking to sell would want to start investing more money at that point. Leon (01:43) So I mean, the obvious thing is it's much more challenging to sell a practice that's on the decline. Who wants to buy a practice that's on its way down? So particularly young graduates, I teach residents all the time. they come out, and if they're going to buy a practice, they want to buy a practice that is up to date. Alison Werner (02:02) Mm-hmm. Leon (02:10) that has the things they're used to in their training in terms of the technical equipment, but also they want the digital presence to be up to snuff. If you don't have a good digital presence, you're invisible to your target audience, which are the digital natives. So it's important even at the latter stages, particularly at the later stages of your career. Alison Werner (02:18) Mm-hmm. Good point. Mm-hmm. Leon (02:39) to start thinking about how to update your marketing and your digital presence so that it pays off when you make the sale. Everybody talks about EBITDA, And multiples of EBITDA earnings before interest, taxes, amortization. I'm not an expert in this area, but yeah, all I know is that multiples of EBITDA are what you're looking for. The higher, the better. And so you want to make as much money as you can. Alison Werner (02:49) Yeah. Right. I think that was right. Leon (03:08) Most orthos have relied on dental referrals and word of mouth for most of their careers. I know I did. But that's not going to cut it for a purchaser who doesn't have those relationships. Alison Werner (03:22) Yeah. Leon (03:23) So marketing becomes vital to creating a new stream of new patients. So we need to firmly believe that starting early in marketing is crucial, particularly if you're going to sell. All too often we have clients that come to us. I get orthodontists that call me and says, look, I want to sell in six months, but I know I'm not attracting anybody from the internet. or I'm weak in this area. So can you just, you know... automatically turn everything on and change things. It doesn't work that way. Yeah, magic wand It doesn't work that way. And it puts us behind the eight ball right from the beginning. So we recommend that you have a strong digital marketing plan in place at least a year or two before your thinking of selling. So at least we have some time to put things in place. And for forward thinking, orthodontists I would say a five year look ahead would be Alison Werner (04:00) wave your magic wand. Yeah. Leon (04:27) appropriate. Alison Werner (04:28) Okay, so again, we're talking about well-established practices. So what exactly can a marketing company do to help them get kind of that leg up when they ultimately do want to sell? What are you doing specifically? Leon (04:43) Yeah, well, mean, you we do what every other marketing company does, right? We do Facebook, Instagram, Google Ads, reviews. We do websites. We do SEO. You know, we have patient queue. We have a portal for chat and HIPAA compliant. OK, but that isn't enough. That isn't enough. Alison Werner (05:07) Okay. Leon (05:08) So you need to start with clear messaging. And I think that is the most important element that's missing for most orthodontists right now, is the messaging. So the first thing we do is we don't assume, because the practice is well established, that it has clear messaging or differentiation. So we start from the beginning with them as well and make sure that we are supporting what differentiates them. Alison Werner (05:27) Okay, yeah. Yeah. Leon (05:36) So a marketing firm, any marketing firm should start, number one, evaluate the practice differential value to make sure it's still on point. You know, they've been in practice a long time and maybe what made sense before doesn't make sense anymore. Things change. Competitors come and go. Neighborhoods evolve. So reevaluating what you can consistently do well, what your patients value and what the competition doesn't deliver helps to triangulate that differentiator and that proposition value that is the foundation of the website and all Alison Werner (05:51) Yeah. Leon (06:15) marketing that follows. So a good marketing agency should not only help develop the differentiated value, but as importantly, leverage the brand to drive as many qualified new patients as possible to enhance the attractiveness of the practice for purchase. So specifically, areas like Google and meta paid ads and increasing those budgets become particularly important in the latter stages for mature practices looking to sell. Alison Werner (06:54) If a practice has a buyer in mind, should any of that marketing change as they work through that process or are you just kind of carrying through towards the end and the handover? Leon (07:07) Well, depending on whether we're representing the buyer or the seller, there are different considerations that need to take place. So for example, for the seller, we don't want to do anything, anything publicly, until everything is signed, sealed, and delivered. We've seen too many issues come up in the last Alison Werner (07:27) Okay. Leon (07:34) day when everything is supposed to be signed and some issue comes up on the legal front and kills the deal. So as a seller, want to be very careful about announcing anything or investing too much until the ink is dry. That said, Alison Werner (07:43) Yeah. Leon (07:56) You need a plan in place so that once the ink is dry, everything can be put into place. That's not the time to start. That's the time for implementation. So you have to be very cautious to mitigate issues like that, which could be very detrimental to the reputation of the practice. Alison Werner (08:02) Mm-hmm. There are more practices now that are selling, or doctors who are selling their practices to a DSO or OSO to transition out. They might stay and still work for a couple of years, but they go under that umbrella before they transition out. What's your advice in that situation? Because you do have another brand, maybe that is coming on. Some practices do maintain their identity, but there are other ones that... Leon (08:40) Mm-hmm. Alison Werner (08:43) I do take on that corporate brand. What's your advice there? Leon (08:48) Well, you know, speaking from experiences as somebody that has sold my practice to my partners, I felt I had an obligation, and I know many orthodontists feel this way, to the patients in my practice. Alison Werner (08:51) okay. Okay. Leon (09:07) I want that practice to be successful. I want those patients to be well cared for and taken care of after I leave. So I think that for the most part, most orthodontists feel that way. There are instances where it's a. you know, a quick sale and gone and, that's not usually the case. Most orthodontists will stay on for a period of time, certainly to make the introduction, even if it's only a couple of months, or in the case of an OSO, a DSO, you know, you take that big money, you're locked in for a number of years, you know. In any event, you want the practice to be successful. Sometimes you have a vested interest in the finances of that as well. Alison Werner (09:29) you Yeah. Yeah. Mm-hmm. Right. Leon (09:54) It's in everybody's best interest to have continuity in terms of the marketing. What you don't want to do is shut everything down. And that doesn't help anybody. coordination between the buyer and the seller and the marketing agency, I think, is critical in terms of communication, in terms of style, even if it's going to transfer over to another marketing company. Alison Werner (10:01) you Yeah. Leon (10:18) coordination and the handoff. It's in the best interest of everybody to be coordinated that way. Alison Werner (10:25) Okay, so once the practice is sold, you've talked a little bit about that there, but are there any other recommendations you have from a marketing or strategy standpoint? Leon (10:36) Well, mean, enjoy your retirement. I mean, yeah. I will add that I do speak to a lot of orthodontists that are struggling with whether to sell or not. And they're in their latter stages of the career, some younger, some older. And there's a lot of money being dangled in front of them to sell the practice. Alison Werner (10:40) Yeah. Leon (11:06) talk to them, orthodontist to orthodontist, about what's the plan after you leave. You know, what do you have in mind? What are you going to do? Have you thought about it at all? And some have carefully thought about it, and they know exactly. They want to do some traveling. They have a list, and that's great. There's an opportunity to do that. But there are others that, well, I haven't thought about it that much. I just want to sell. I'm tired. I just want to get out. And I always caution those orthodontists that maybe you want to stay a couple of days. You can sell, but maybe you want to write in. Alison Werner (11:17) Yeah. Yeah. Yeah. Yeah. Mm-hmm. Leon (11:43) that you have that option of staying as an associate. Not for the money as much as just to keep active and you loved what you were doing and you can still cash in and still have something going on. I never would have sold my practice if I didn't have this opportunity with my partner and daughter, Amy, to start people in practice. Alison Werner (11:51) Yeah. Yeah. Right. Right. Leon (12:06) So we started and then all of sudden I had two full-time jobs and I was 65 years old and I had to make a decision. If it wasn't for people in practice, I'd still be practicing. couple maybe one or two days a week. Earth and I can do aligners well into their 80s and 90s sometimes. Alison Werner (12:13) Right. Mm. Yeah. Leon (12:24) So my advice to senior orthodontists that are thinking of selling is think about what you're going to do afterwards. And if you just love what you're doing, build it into the buyout. Build it into the future so that you can still do what you love and still have the time that you want to do other things as well. Alison Werner (12:47) Dr. Klempner, thank you so much and thank you for sharing your personal experience with us. I think that's brought real insight to all of this. Leon (12:54) Well, Alison I appreciate the time. Alison Werner (12:57) All right, well, to our listeners, and to our listeners, if you're interested in talking to Dr. Klempner, as he's mentioned in a previous episode, I guess, you can DM him or reach out to them at People + Practice. So thank you again. Leon (13:10) Yep, yep. Thank you, Alison.