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You may be thinking to yourself, “Wait. He’s not a dentist…?”
Correct you are. My wife, on the other hand – 100% Doctor of Dental Surgery (DDS).
I’m writing this article in June of 2017, and as we near our closing date (June 30, 2017) on “the practice” (hereinafter referred to as Monfredi Family Dental – I’ve read so many documents written by lawyers lately…), I cannot wait to share much of what we’ve been through in the past 7-ish months (we started the process for buying this practice in December 2016).
I’ve heard some people that I have great respect for say recently, “…Getting an MBA can be a huge waste of time and money. You should just start a business. At least that way you have a chance to make your money back…”
Well… We indirectly took them up on that offer.
And, although I still may head for an MBA someday, I can unequivocally confirm that opening your own business provides one hell of an education in business, negotiation, risk management, HR, cash-flow analyses, negotiation, legal fees and advice, negotiation,… I also understand that there are a multitude of different types of businesses out there and that processes and regulations differ across markets, but over the coming months and years, I hope to share much of what we’ve learned and are learning, and how it applies to personal finance, leadership, and life in general.
We still have quite a long way to go, but I hope you’ll find some of the coming posts informative, interesting, and helpful – if not entertaining. Oh, and I’d be doing us at Monfredi Family Dental a disservice to not say the following: If you’re in the greater Columbus, Ohio area, plan to visit the greater Columbus area, or are looking for an upcoming vacation spot and may choose the greater Columbus area (awesome zoo, waterparks, and hiking/outdoor activities!!), we’d love for you to give us a call so that Dr. Monica and our staff can provide you with exceptional care with a gentle touch. They really do a phenomenal job, and as the patient testimonials continue coming in, I know you won’t have to take my word for it.
In any case and as always – Thanks for reading! If you want a taste of what practice acquisitions can be like, continue reading below.
The day our practice purchase fell through… for the fourth time:
To put things into perspective, we had already filed ~30 different packets of paperwork with 30 different dental insurance companies, negotiated the terms and price for our practice purchase (twice), had 1 bank tell us they couldn’t make the loan work with their model (due to things I may or may not discuss at a later time), moved onto a second bank, delayed closing 3 months, started talking with dental suppliers, graphic designers, website developers, and had just hired a new dental assistant when I had the following conversation with our new banker who was supposed to be calling with great news about our now possible loan:
Banker: “… (Random small talk, beating around the bush, and other things that all contributed toward my gradual rise in blood pressure while he meandered toward the point). With the current cash-flow model, it doesn’t look like a realistic possibility that we can make this loan work.”
“Wait. What? Why is that, exactly?” – My response
“…There simply isn’t enough revenue coming in to support the debt service, overhead, and other normal expenses.” My defeated, mouth-agape, silence must have been deafening. He continued, “Let me ask you a question.” Still, no response from me so he forged onward in the conversation. “Have you ever considered a start-up (A start-up dental practice is as it sounds. Brand new. No patients, cash-flow, equipment, staff… Nothing. If we thought an acquisition was tough, that sounded like a nightmare)? We’re able to lend more and you could move your practice to any location you’d want to have it…”
I basically quit listening and let him drone on trying to lift my spirits, although he had no idea that the news he had just provided was the death-blow I couldn’t withstand. All the times before that this deal had fallen through didn’t hit me quite like this one. With those, there was still a path forward. Hope. A possibility for the old, “When one door closes, another opens,” nonsense that people tell you when you don’t get what you want. While I am a believer in the, “What is meant to be will be,” philosophy – that doesn’t mean I’m always 100% compliant, at the time.
Up to this point, we had been dealt obstacles and overcame them as they appeared (an abnormally large amount of obstacles according to ALL of the advisors we were working with – accountant, lawyer, bankers, industry professionals, etc.). We learned, adapted, and moved forward. This was the dead-end we so hoped to avoid because we knew what this feeling felt like. We had experienced this feeling after the first practice we attempted to buy earlier in 2016 ended up not working out for us. It was amicable, of course, but that didn’t mean we had to love the outcome (even though it did end up being a blessing, in time).
Back to my conversation with the banker:
When I finally gathered my composure and worked up the nerve to say something other than a profanity-laced tirade, I put the phone back up to my ear and said, “(Banker), I honestly think that if I went home right now and told Monica that a start-up was our only path forward at this point… I would get punched in the face.” He laughed. I wasn’t joking. “I get it and I understand the appeal, but we’ve come so far and have put so much into this practice that we probably won’t be able to start again right now. We may need to take some time and gather our thoughts so that we can come up with a game plan.”
“I understand, Mike. When you’re ready, I’d love to sit down with you and talk options.”
“Thanks, (Banker). I appreciate it. Now I’m going to tell my wife that our dream is back on hold. I guess when the time is right, it’ll work out.” (See, I am an optimist. Can you tell I was already starting to see the positives in the start-up I loathed just 5 minutes ago? Progress.)
My conversation with Monica, on the other hand, wasn’t as optimistic. During my call with the banker I happened to be heading over to her office to get a few things done, and by the time (Banker) broke the news, I was sitting in Monica’s office with the door closed. So, at least I didn’t have to tell her over the phone. We talked about the nuts and bolts of why this wasn’t working out and that perhaps a start-up would be a decent option down the road. We came away from the conversation spent and completely dejected to the fact that 4.5 months of working from 0500 – 2300 on either our day-jobs or the practice were all wasted. We knew there was a tremendous education in there, but it seemed worthless to us at the time. It was 4.5 months of sleepless nights for nothing. It was a waste.
The workday was done and there wasn’t a reason to work after work anymore so we headed to our cars for the drive home. I turned on our throwback hip-hop station (BOOM 106.3) and let DMX yell (I mean rap) my problems away.
The station is censored, but it gets the job done in a pinch. I had the windows down, and as spring weather flowed throw my somewhat-aggressively-speeding car, I almost didn’t notice my phone ringing…
It was The Banker… “What could he possibly want now?” I thought to myself, and as DMX potentially had me worked up enough to say something less than polite, I answered the phone. “Hello, (Banker).” (Much like Seinfeld and Newman, if you get the reference…)
He was pretty worked up and a little out of breath: “Mike! Oh, my God. We made a mistake in the calculation and it threw everything off! I was wrong. This cash-flow model actually works very well!! Please tell me you didn’t talk to your wife yet.”
DMX faded into the background and Jack Johnson seemed to best encapsulate my mood with this new news. “(Banker), I did tell her, and she was crushed, but this news will trump that.”
“Oh, no! I’m terribly sorry, Mike. You didn’t actually get punched in the face, did you?”
“No, (Banker). Yet again, I find myself fortunate to be married to a saint. And no worries, we just went through a 15-minute exercise in what to do when your entire professional world gets thrown into a wood-chipper, and I think we handled ourselves pretty well. Thanks for the dry-run. At least now we’re better prepared.”
He laughed. This time, I joined him.
Thanks for reading!
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