Dr. Robert H. Lyford answers questions about his decision to buy a periodontal practice after finishing his residency...

2005 Annual Meeting Student Event
STARTING OUT BUYING A PRACTICE

Below is an interview with Dr. Robert H. Lyford, D.D.S., who practices in Pueblo, Colorado, and completed his periodontal residency at University of San Antonio in 2002.

What is the most rewarding part of what you do everyday?

The clinical dentistry and interacting with my staff and patients.

What was your ideal plan after graduation?

It was my plan to purchase an existing periodontal practice and do an immediate transition with the existing periodontist.

What factors affected your plans and decisions about your career and future?

Finishing my dental training at an older age while with a family.

What appealed to you in terms of buying a practice?

Most appealing was having an immediate cash flow.

How did you begin the process of buying your own practice?

By using resources on the AAP’s website and interviewing Denver area periodontists.

Did location influence any of your decisions?

Yes, we wanted to move back to Colorado. The size of the community and how many existing periodontal practices was also a factor.

Did you meet with an attorney, practice consultant or accountant before pursuing a loan? Why or why not? What did they do for you and why was it beneficial?

No. The seller financed.

How did you determine the financial requirements for buying a practice?

I was able to determine my financial requirements by reviewing the fair market value based on the previous 3 years’ revenues and also by estimating new equipment needs. I obtained seller financing minus a 10% down payment. (Bank line of credit for down payment of $40,000)

What risks were involved in starting your practice?

Some risks that I encountered were working with an existing staff, maintaining current referrals and expanding to new referring offices. Additionally, the costs associated with the debt payments of the practice necessitated a rapid growth for the practice.

How did you assess and manage those risks?

I contacted all GP offices in the area with a personal visit during my first 2 months in Pueblo. I also transitioned out some of the old staff and hired some new.

Did the original owner work in the practice in the beginning or retire?

The original owner retired immediately.

What is your situation now?

I am a solo practitioner with 1 hygienist.

Did you restructure the practice’s finances in the beginning to pay the bills, yourself, staff and/or buy new equipment, etc.?

No, however, I did purchase new equipment at the end of the first year.

What financial issues or considerations came into play when planning for the future?

I had to take into consideration the purchasing of digital x-ray and computer systems after only 1 year in practice.

Using real or fictitious numbers, how did the realities of your finances compare to the plan you originally outlined?

For each of the 3 years prior to the time I purchased the practice; average production was $245,000 per year.

What resources (i.e., people, publications, web sites, groups) did you find the most helpful?

Some of the resources I found most helpful was the advice of experienced periodontal colleagues and NASP (North American Society of Periodontists).

What suggestions do you have for individuals buying a practice?

What was your biggest mistake when buying your practice?

I mistakenly believed that I would be able to retain all of the previous staff without any difficulties.

How many employees do you have?

Six.

What is the most important thing you have learned?

The need for continuing education and support of the referring GP’s.

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