Short video transcript of Gene St. Louis (GSTL Consulting) explaining what a dental practice evaluation entails for prospective buyers. He compares a practice evaluation to a home inspection, outlines the data reviewed (three years of tax returns, P&Ls, practice-management reports), and emphasizes independent buyer representation, demographics/fee analysis, and producing an executive summary to inform—but not make—the purchase decision.
Chapters
Let's talk about a practice evaluation. Eval versus val. So evaluation is typically done by an accountant who is licensed to do that, or by a broker that is transitioning a practice, selling a doctor's practice. What we do here at GSTL Consulting is, is we do evaluations, which is really looking at three years of tax returns, three years of profit and loss statements, analyzing three years of reports out of the practice database. So looking into their practice management software. Think of a practice evaluation as if you were buying a home. You would never buy a home. It's probably your largest investment other than perhaps a practice. You would never buy a home and not do a home inspection. Similarly, you should never buy a practice and not have a representative that only represents you, meaning the buyer. You would not want to use the same representation as the seller. Why? Well, because there's a conflict of interest. So I believe that doing a practice evaluation is a great way for the buyer to really understand what are they buying in detail. The systems, the staff, the wages.
How much insurance is in the practice, how many new patients, what's the active patient count, how much unscheduled treatment is there, what type of dentistry is the seller doing versus perhaps what you could do as a buyer. So there's so many opportunities. Some people would call them gaps. I view a gap as an opportunity. So very often what I find when I do an evaluation, which also includes a demographics report, a fee analysis, an executive summary, is the doctor on the receiving end? The buyer is just eyes open. They're fully aware of what they're purchasing. And my position is not to say, yes, buy it or don't buy it. My position is to give you all the intel to make a great decision. Do I coach you and help you through that journey? Sure. And that's really what an evaluation is.
