Practice Launch Spotlight – Dr Husnain Shahid
Owner of Two Low Overhead Dental Practices by Age 25 and the Skill of Negotiation
Husnain is a student of the Practice Launch CE course. I remember being on vacation and seeing a call come through with an urgent, yet excited voice, on the other end from one of my students with some last minute questions. I knew he would have a great story to tell me….
By age 25, he and his younger brother Dr. Rehan Shahid were already the owners of two successful low overhead practices. Employing the principles of the course was essential to the process – but in this dialogue I want to shine a particularly bright spotlight on the excellent demonstration of negotiation which Husnain showcased and shared in our interview together.
The article you are about to read is to serve as a companion to the video you can watch in its entirety above. The interview I completed with Husnain was completed in 2020 and he graduated from dental school in 2019.
My memories of this particular doctor actually go back several years to when he was still a dental student (Baylor). His ambition was apparently from the jump. This was someone who completely reminded me of a younger version of myself. Someone who once given the playbook would stop at nothing to make it a reality for himself. Husnain’s first interaction with me was in a Dental Student Seminar that I held years back. The manner in which this particular student ‘locked in’ to what I was saying was remarkably refreshing.
Spending his time having sit down lunches and meeting up with dentists to gauge their interest in selling was a long and grueling exercise. Oftentimes the practices on the table for sale were overhead monsters with 75% to 80% overhead garnering huge asking prices (~$2,000,000) for little profit. Then this doc decided to do several very impressive things….
Negotiation Tactic #1: The Best Deals are Often Not Listed
He leveraged a DSO. DSO’s do a painstaking amount of research to find good financial opportunities. So one day Doc was approached by a DSO to work for them in a new practice that was ‘coming soon.’ A lightbulb went on in his head….approach the owner of the ‘Coming Soon’ practice the DSO was about to buy — BEFORE the DSO could close the deal! We all know that DSO’s can offer more money to sellers, but this is where the power of negotiation comes in. After all, which old-school minded dentist wouldn’t RATHER sell their practice to a motivated young dentist starting their career versus selling to the corporate engine?
Negotiation Tactic #2: A Great Deal is Always Out There
Doc was eventually able to negotiate down the price of the practice AND the building (3,000 sq feet) to $250,000 for the total package ($125k for practice (just under $500k of yearly revenue) and $125k for building). Beyond that – the 3,000 sq foot building also included multiple revenue generating rental units.
Negotiation Tactic #3: “Let me think about it….”
When in a face to face meeting with a selling doctor, stall tactics can be commonly encountered. Such as “I need to think about it” or “let me talk with my wife.” In a negotiation, you can easily lose the deal here. If Doc let the Old Doc pull this move…he very likely could have lost the deal to the DSO. So instead, when Doc showed up to negotiate with Old Doc — he came prepared with an LOI contract and a check. He took out that check and offered if you sign the LOI RIGHT NOW I will write this deposit check to you here and now. When Old Doc saw that money in hand….he signed on the dotted line.
Negotiation Tactic #4: Never Close the Door
Always keep the door open. Doc’s brother (Rehan) applied for an associate job and got a terrible, terrible employment offer. But…they kept the door open to the relationship. Eventually, that practice went up for sale. Who is one of the first names the sellers had in mind to buy? You guessed it! This is due to keeping the relationship open – even if you don’t see eye to eye on a deal right away.
Negotiation Tactic #5: How Low Can You Go?
Many dental practices have asking prices that are far too high. However, if a practice has ‘been in the family’ for decades and decades there can be an emotional attachment to the practice which results in the seller asking for a higher price – just based on feelings. Not on facts. On practice #2 which Doc and his brother purchased, the final amount they ended up paying for the practice was LESS THAN HALF of the original asking price. The original offer was $200,000. But Doc was bold — he bought the practice for just: $60,000.
When you are negotiating from a position of power and not desperation, you may be surprised at the type of deals which reveal themselves.
Kaizen – Let’s all get a little bit better, every day.
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