By Bridget Schwebke, RDH, CPA, Head of Consulting
When a dental practice changes ownership –whether it’s admitting a new partner into the practice or a full transition from a retiring doctor to a new one – the future of the business name naturally becomes an important decision.
Sometimes, a name change is necessary. If Dr. Jones buys Dr. Smith’s practice, Smith Family Dental, this would no longer be an appropriate name. If Cooper-Lee Orthodontics adds a new partner, they may want to add to the name or start fresh without surnames. In other instances, a name change may be desired as part of a full brand update.
Transitioning the name of a business comes with a series of tasks, both significant and minor. It can be daunting, especially when we’re talking about a small business that may not have a marketing or operations team to execute all of the pieces.
If you’re going to be the new owner of an existing practice and a name change is in your future, here are a few considerations to help you ensure you cover all your bases.
Brand Recognition
If brand recognition has historically been crucial in the practice’s patient growth, you’ll need to give serious thought to the desire and the timing of a name change.
Brand recognition can carry a lot of weight in a patient community. It’s a result of patient trust and long-term loyalty, and it illustrates the practice’s credibility in serving its patients.
TAKE NOTE
Because of brand recognition, some buyers have a strong desire to keep the practice name for at least a short period of time. If that’s the case, the transfer of the name will be part of the practice sale and included in the legal documents.
Note that NDP often sees doctors put their personal names as their legal entity and file a DBA, or “doing business as,” for their practice name. To transfer the name, you’ll want to look at how the name is legally set up – whether it’s the entity or DBA – and complete the appropriate paperwork.
Timing the Name Change
While new ownership is an opportunity for growth, it can initially cause unease for the existing staff and patients. For most business operations and practice changes, including a name change, NDP’s recommendation is to spend the first few months focusing on learning more about the practice and keeping things status quo as much as possible.
Once you understand the business and have established a relationship with patients and staff, then you can look to make updates. That way, the changes can be planned for, and the team and patients have the chance to build trust with the new owner.
From a legal perspective, the practice name is addressed in the legal documents before the practice sale closes. If the practice name is the former practitioner’s name, there are limits on how long you may be allowed to use the name. While some states may have some varying timeframes, the standard is that a buyer has the ability to use the doctor’s name for up to 12 months post-close.
This is standard because it takes time to not only update the practice name, but to also fully get new owners transitioned into the practice. For 100% walkaway sales, the seller is likely going to be in the practice for a workback period to make introductions to the patients and referrals and to help hand off the goodwill. This will ultimately help prevent any surprises or alarm when the name change eventually takes place.
Getting Started
Unfortunately, changing the practice name isn’t just about getting a new sign on the building. Every business account, every piece of marketing, everything that the practice touches will need to be updated. It’s administrative-heavy and a significant undertaking.
While there are numerous elements to update, here’s an overview of the big-picture components.
Administrative
- Business Entity or DBA
- Bank Accounts
- Credit card processing
- Payroll
- Practice Management System
- Business-Related Insurances
- Patient Insurance Credentialing
- City, State, Board Credentialing
Marketing
- Logos
- Physical Signage
- Flyers, brochures, etc.
- Business Cards
- Website
- Google Business Profile
- Apple Maps
- Yelp
- Social Media
- Emails
Vendors
- Accountant/Financial Planner
- Supply Company
- Phone & Internet Provider
- IT Provider
- Utilities
The announcement of the new name is another key component and can be the most exciting. Once the elements above have been updated with the name, there needs to be clear, engaging communication to the patients through email, the website, social media and even a personal letter from the doctor to the patients.
While there still may be a few areas to update, this announcement can serve as the finish line of the process and the beginning of a new chapter in the practice.
Support in All Areas
Our dental transition advisors at NDP want to set you up for success and support you through all aspects of becoming a new owner. Contact our team to learn how we can help you achieve your ownership goals.
Bridget Schwebke
RDH, CPA, Head of Consulting
A graduate of Tennessee State University, she holds a Bachelor of Science in Dental Hygiene and a Master of Accounting in Science from Northern Illinois University. Read more about Bridget.