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In theory, a business should be worth more alive than dead, so a young dentist looking to start their own practice should be willing to pay more than a PE that

In theory, a business should be worth more alive than dead, so a young dentist looking to start their own practice should be willing to pay more than a PE that plans to break the bones and suck out the marrow. On an individual business scale, that's hit or miss. When entire industries start getting swallowed up? It's because something fundamental is wrong with the industry. For example, Family Dining restaurants (i.e, relatively cheap sit down restaurants where the appeal is more the service than the food like Red Lobster, Chili's, Applebees, etc) are doomed, and have been for a while. Millennials and younger, on average, value table service less than their parents did, preferring fast casual restaurants (restaurants where you order at the counter, but are a step up from fast food) with better food in the same price bracket. This trend is widely known, so there's a shortage of people willing to buy up family dining franchises. But there's a lot of capital tied up in these restaurants. So in swoops PE, to basically bet that they can make more money killing the business than its current owners are able/willing to.

SoftTalker 1y ago
OK but there's a demand for vets and dentists. That hasn't gone away. If the PE model is to acquire all the clinics in an area and then jack up prices, at some point a dentist or vet should say "I can do this at a lower price, still make more money than the PE owners are paying me, and work on my own terms" and hang out a shingle.
- OkayPhysicist 1y ago
  Exactly. All I'm arguing is that when you see PE swooping in, it means something is urgently wrong with the industry. My guess (as I alluded to in my earlier post) is that for private practice medical adjacent stuff like dentists and vets the issue is that the newer generation of people going into the field don't have access to the capital necessary to actually start their own business. These are relatively capital-heavy businesses (medical equipment is $$$$).

SoftTalker 1y ago

OK but there's a demand for vets and dentists. That hasn't gone away. If the PE model is to acquire all the clinics in an area and then jack up prices, at some point a dentist or vet should say "I can do this at a lower price, still make more money than the PE owners are paying me, and work on my own terms" and hang out a shingle.

OkayPhysicist 1y ago
Exactly. All I'm arguing is that when you see PE swooping in, it means something is urgently wrong with the industry. My guess (as I alluded to in my earlier post) is that for private practice medical adjacent stuff like dentists and vets the issue is that the newer generation of people going into the field don't have access to the capital necessary to actually start their own business. These are relatively capital-heavy businesses (medical equipment is $$$$).