In this episode of the Dental Boardroom Podcast, host Wes Read, CPA and financial advisor at Practice CFO, and Chris Marshall break down some of the most important warning signs dentists should watch out for when evaluating a dental practice for purchase. Drawing from real client cases and common deal-flow patterns, they discuss the financial, operational, and clinical red flags that often hide beneath the surface of seemingly attractive listings.

Listeners will learn how to interpret declining numbers, inconsistent hygiene schedules, sudden production increases, PPO manipulations, risky seller behaviors, and gaps in patient flow. By the end of the episode, you’ll understand how to look past broker language and identify the true health or weakness of a prospective practice.

If collections or production drop year-over-year even slightly it signals deeper issues.

This could mean a declining patient base, ineffective ownership, poor systems, lack of demand, or mismanagement.

• Large swings in hygiene revenue
• Inconsistent recall schedules
• Declining hygiene visits
• These typically indicate poor systems, weak re-care, or a lack of organization affecting long-term revenue.

A seller spiking numbers in the year before the sale is a common tactic.

Examples include:

• Over-treatment
• Running unnecessary procedures
• Pre-billing treatment
• A buyer should be cautious: inflated numbers ≠ sustainable revenue.

Practices sometimes:

• Drop PPOs before selling
• Switch PPO participation
• Adjust fee schedules to appear more profitable
• Understanding the insurance environment is essential to projecting true cash flow.

Pay attention if the seller:

• Wants to leave immediately
• Avoids answering questions
• Has incomplete records

Shows disorganized systems

These behaviors often align with financial or operational decline.

In this episode, Wes Read, CPA and founder of PracticeCFO dives into one of the most important financial terms in dentistry: EBITDA. Whether you're planning to sell your practice or simply want to manage it better, understanding EBITDA is essential. Wes explains what it is, how to interpret it from your P&L, and why every dental professional—owner or associate—should know the business side of dentistry.

This episode is designed to help you start thinking like a CEO of your dental practice. Because yes, it’s a practice—but it’s also a business, with payroll, debt, taxes, benefits, and financial planning responsibilities.

• EBITDA is a key financial metric every dental practice owner should understand.
• Even associates benefit from learning the business side of dentistry.
• Your dental practice operates like any other business—complete with payroll, taxes, and budgets.
• Understanding financials helps you become an effective CEO of your practice.
• Unlike large corporations, dentists provide services (not products), but the financial principles still apply.

#DentalBusiness #DentalPracticeManagement #EBITDA #DentalFinance #DentistryPodcast #DentalCEO #DentalAssociates #PracticeOwnership #DentalEntrepreneur #FinancialLiteracy #P&LExplained #BusinessOfDentistry

In this episode with Wes Read, CPA and founder of PracticeCFO, we explore a topic that is absolutely foundational to the financial success of your dental practice—your financial statements. Host [Your Name] (or "I") breaks down the importance of understanding your Profit & Loss Statement (P&L) and how it reflects the economic health of your practice.

Whether you’re preparing to sell your dental practice or simply want to make smarter financial decisions, this episode will help you interpret your numbers and transform your P&L into a powerful decision-making tool.

Financial statements are your practice’s financial X-rays. They tell the story of all your effort.

P&L (Profit & Loss) shows income and expenses; it's key to understanding your monthly performance.

Balance Sheet shows assets and liabilities—important, but covered in a future episode.

Your P&L should be reviewed monthly—ideally by the 15th–20th of the following month.

Understand Net Operating Income: what's left after operational costs but before debt, taxes, and personal draw.

A well-structured P&L is essential whether you're managing or selling your practice.

Tools like QuickBooks Online and REACH Reporting can improve report clarity and benchmarking.

#DentalPodcast #DentalFinance #DentalPracticeManagement #ProfitAndLoss #PracticeCFO #DentalBusiness #DentalAccounting #DentalSale #PlandL #BalanceSheet #DentalOwners #FinancialFreedomDentist #DentistLife #SellYourPractice #DentalConsulting

Selling a dental practice is one of the biggest financial decisions in a dentist’s life—and it’s easy to make costly mistakes. In this episode, Brian Hanks sits down with Wes Read, CPA and founder of PracticeCFO, to break down the top 5 most common mistakes dentists make when selling their practice. From bad timing to poor team assembly, Wes and Brian share the insights every seller needs to avoid leaving money (and sanity) on the table.

Key Points:

Why selling too late can hurt your practice value

The hidden danger of “just listing with your CPA”

What happens when your staff finds out too soon

Why selling to the first buyer is often a trap

How working without a strong team can sabotage your deal

#PracticeSale #SellYourPractice #DentalBroker #DentalCPA #DentalFinance #PracticeCFO

Your credit score may not seem like a daily concern, but as a dentist, managing debt is an unavoidable reality. Whether it's student loans, a practice acquisition, or buying a home, your credit score can be the deciding factor in securing favorable loan terms. In this episode, we break down the essentials of credit scores, how they impact your financial future, and key strategies to improve and maintain a strong score. Learn why debt, when used correctly, can be a powerful tool for financial growth and how to leverage it wisely.

Key Points Covered:

✅ Why credit scores matter for dentists and practice owners

✅ The role of debt in wealth accumulation and financial leverage

✅ Common misconceptions about credit and debt management

✅ The five key factors that determine your credit score

✅ How to strategically use debt to build wealth and avoid financial pitfalls

✅ Why leveraging assets like a dental practice can create long-term financial success

✅ Practical steps to improve your credit score and increase lending opportunities

Resources & Links:

💡 Learn more about financial planning for dentists at PracticeCFO.com

💡 Check your credit score and track your financial health with AnnualCreditReport.com

#DentalFinance #CreditScore #DebtManagement #DentalPractice #FinancialFreedom #WealthBuilding #DentistLife #PracticeOwnership #SmartInvesting #FinancialPlanning

In this episode, we delve into one of the most critical aspects of running a successful dental partnership: profit allocation. Drawing parallels between marriage dynamics and business partnerships, we explore three core models for distributing profits among dental practice owners. These models — the 50/50 Model, Associate-Owner Model, and Full Allocation Model — are unpacked to help you determine the best approach for your practice. Whether you're a seasoned dentist or exploring partnerships for the first time, this episode provides valuable insights into structuring financial success in your dental business.

Importance of Profit Allocation in Dental Partnerships:

• Financial arrangements impact business success and partner relationships.

Three Models for Profit Allocation:

• 50/50 Model: Equal distribution of profits, simple but less flexible.
• Associate-Owner Model: Combines individual production rewards with shared profits.
• Full Allocation Model: "Eat What You Kill" approach; rewards are based solely on individual contributions.

Factors Influencing the Right Model:

• Production levels, time commitment, and practice type.
• Balancing fairness with incentivizing productivity.

Practice CFO's Expertise:

• Years of experience guiding dental partnerships.
• Customized solutions tailored to practice-specific dynamics.

Special Considerations:

• Family practices often favor the 50/50 Model.
• Adjustments for specialists or varying partner roles.

The Importance of Financial Reserves:

• Maintaining at least one month’s expenses in working capital.

Exploring Practice Orbit:

• Innovative platform for buying and selling dental practices.

#DentalPartnerships #ProfitAllocation #DentalCPA #PracticeManagement #BusinessStrategies #EatWhatYouKill #AssociateOwnerModel #DentalBusiness #PracticeOrbit #DentistryInsights

Summary:

In this episode, we explore the financial and legal intricacies of dental partnerships. Learn about the pros and cons of various legal structures, including S corporations and partnerships, and why selecting the right setup is crucial for tax efficiency and liability protection. Our host also shares tips on payroll, 401(k) planning, and navigating IRS requirements. Plus, discover how PracticeOrbit.com simplifies dental practice sales and connects you with expert advisors.

Key Points:

1. Importance of tailored tax planning for dental practices.
2. Understanding 401(k) plans and payroll management.
3. Legal structures for dental partnerships: S corporations vs. partnerships.
4. Why dentists should avoid C corporations due to double taxation.
5. Role of the K-1 in S corporation tax filings and FICA tax savings.
6. Legal setup advice: consulting dental-specialized attorneys.
7. Selling a dental practice through PracticeOrbit.com.

#DentalPartnerships #TaxPlanning #DentalPractice #SCorporation #PracticeOrbit #DentalBusiness #401kPlanning #TaxEfficiency #SmallBusinessTips #FinancialFreedom

**If you are a Delta Premier provider and receive Delta Premier reimbursement rates, congratulations! ** You’re a seasoned dental practitioner who has been around a while! For those who might not know, Delta Premier is a grandfathered level of billing which Delta no longer offers to new dentists or to new owners of dental practices. The current top level of Delta billing, at least for those without Premier status, is Delta PPO.

So, what happens if you’re a Delta Premier provider and are considering the sale of your dental practice? Does it affect your value? And, if so, how?

The short answer is that it most likely will negatively affect the value. Let’s dig a little deeper.

Let’s first note that if you are a buyer considering the purchase of a dental practice where the dentist is a Delta Premier provider, then you should take great care in understanding the financial impact to you after you become the owner. I am aware of a practice that was purchased for nearly $2,000,000 which went bankrupt in just over a year because of this issue. Buyer beware! It sounds ominous, but it’s not that bad if you understand it and plan for it. To really explain the effect of Delta Premier on practice value, we’ll look at it from the seller’s perspective.

The heart of the issue is that Delta Premier rates of reimbursement will be reduced to Delta PPO rates of reimbursement when the new dentist gets credentialed. As sellers, you can expect savvy brokers, bankers, and buyers to estimate this reduction and subtract it from your collections. As we know, collections play a major role in the net operating income (NOI) of the dental practice. In other words, the higher the collections, the higher the NOI and the higher the practice value. The same is true when collections move the other way. In the case of Delta Premier rates, practices that have a heavy premier patient base will see higher offsets to their collections. That being said, calculating this reduction can be tedious and challenging. A listing broker should do their best to estimate this reduction; ultimately, however, the responsibility falls upon the buyer and the buyer’s consultants to determine the true effect of Premier billing. A rough estimate to calculate the premier reduction is to assume that 15% of the total collections come from Delta. Of those collections, 30% are rated as premier, so the math looks like this:

Total Collections x 15% x 30% = Delta Premier Reduction

In the case of a practice collecting $1,000,000 and using this formula, the reduction would be $45,000. However, it would not be accurate to say that the value of the dental practice was reduced by $45,000. Reducing the collections and the NOI by $45,000 could mean $100,000 swing in value to the banks based on their underwriting standards.

Of course, the formula above is just an estimate. A seller can show that the reduction might be negligible. For example, they might be able to prove that only 20 of 2,000 patients are rated as Delta Premier in their practice. In this case, the broker might not make a reduction and would just disclose in their marketing materials that the seller is a Delta Premier provider but that premier accounted for 1% or less of total collections.

To sum up, both buyers and sellers should take time and care to understand the effect of Delta Premier billing on the value of a dental practice. Doing so will ensure a fair trade for both parties and protect against very unfortunate surprises.