Focus on Your EBITDA - Interest Rates Falling - with Brannon Moncrief

Bulletproof Dental Practice

The Bulletproof Dental Podcast Episode 357

HOSTS: Dr. Peter Boulden and Dr. Craig Spodak

GUESTS: Brannon Moncrief

DESCRIPTION

In this episode, Craig and Peter welcome guest Brannon Moncrief as they discuss the common misconception that more dental practice locations automatically lead to higher valuations and buyer demand. They emphasize the importance of building intentionally and scaling only when the first location is successful and profitable. They also highlight the significance of EBITDA as the ultimate key performance indicator (KPI) in dental practice operations and provide insights into what private equity buyers look for in terms of EBITDA percentages. The discussion also touches on the issue of fake EBITDA and the misconception that high personal income equates to a valuable business.

TAKEAWAYS

• Building with intentionality and ensuring the success and profitability of each location before scaling is crucial.

• EBITDA is the ultimate KPI in dental practice operations and is significant in valuations and buyer demand.

• Private equity buyers look for EBITDA percentages in the range of 20-25% for healthy margins.

• The macroeconomic climate, including interest rates, influences dental practice valuations.

• The market for dental practice acquisitions has changed, with a shift in the mix of buyers and increased scrutiny on the quality of assets. Building a real business in dentistry requires scalability and the ability to survive without the dentist's direct involvement.

• High personal income does not necessarily equate to a valuable business, as fake EBITDA can inflate profits.

• Consolidation in the dental industry is expected to continue, with private equity playing a significant role.

• Dentists should focus on optimizing their practices and adapting to changes in the industry to stay competitive.

• Understanding the value of your business and planning for the future is crucial for long-term success.

CHAPTERS

00:00 - Introduction and Scaling Misconceptions

06:33 - Building with Intentionality and EBITDA Importance

13:08 - Macroeconomic Climate and Dental Practice Valuations

18:15 - The Future of Dental Practice Acquisitions

23:16 - Building a Real Business in Dentistry

24:48 - The Pitfalls of Fake EBITDA

28:23 - Consolidation in the Dental Industry

36:30 - Adapting and Optimizing for the Future

REFERENCES

Bulletproof Mastermind

Bulletproof Summit 2024

McLerran and Associates