The Impact of Covid-19 on Buying & Selling Dental Practices

Unlike many other industries, much of the pandemic shutdown for dental offices was a deferral of revenue, not the loss of revenue.  COVID-19 does not reverse tooth decay or make impacted wisdom teeth go away. That restoration will still need to be done, and those wisdom teeth will still need to be extracted. There will be lost hygiene revenue, and depending upon how the eventual recovery goes, revenue for some elective procedures may be lost. But unlike many other business models, that deferred revenue is building up a back log that will help the recovery in the dental industry far more than many others.

In almost all cases, the survival of a dental practice is not in question. This pandemic has introduced more of a timing issue, not an existential one. And banks are smart enough to know this.

A key thing to keep in mind is that prior to the COVID-19 pandemic, existing supply and demand forces had already driven practice values to unprecedented heights. We were in a strong “sellers’ market” in most places across Ohio, Michigan, Indiana, Kentucky, Tennessee and Georgia. The key drivers of this – a lack of strong dental practices available in competitive markets, the excellent cash flow of most dental practices, and banks offering great financing terms, have not changed.

Practice owners need to take comfort in the fact that, despite everything going in today’s world, the fundamental laws of economics, led by supply and demand, have not ended, or even placed on hold. The one thing we know about all crises, is that they end. And that the prospects for practice values remain strong. The key is to seek out experienced advisors you can count on, not yielding to buyers whose real interest is their own gain.

No one can deny the incredible challenges dental practice owners have faced over the past months, and the sacrifices they have made. As we work through the impact of the COVID-19 pandemic, patients’ needs should remain your focus. As you remain focused, you can know that your practice value remains strong, and when the time comes for you to sell, a strong market awaits.

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