Mike Lovato and Bob Nykaza needed to find a new dental office fast after a May 2015 fire did extensive damage to the one they shared for more than 20 years in southern Colorado Springs.
While they were covered by insurance for the damage, the business interruption part of the coverage only provided them with income to pay their seven-person staff for 90 days so Lovato and Nykaza wanted to be operating in their new office by the time those payments ran out to avoid losing any staff members.
"We were out of town when the fire happened, but I received a few photos of the fire and initially thought we would be able to get back into the office in a week. But after going to the scene and seeing the extent of the damage to our suite, it became clear that extensive repairs would be needed" that would take longer than three months, Nykaza said.
Since Lovato and Nykaza were leasing the space on a month-to-month basis, they decided to look for a new office and contacted Kyle Francis, who was a friend and business consultant to both dentists, to help them find new space quickly. Francis immediately turned to Stanton Kensinger of Olive Real Estate Group to help him find space their practices could share. Francis and Kensinger had done a few real estate transactions together before, but the deal they put together for Lovato and Nykaza would eventually lead them to combine their efforts.
Kensinger came up with five or six options for the two dentists, who visited three before agreeing to lease long-vacant space previous occupied by an orthodontics practice a half-mile west of their previous office that could be quickly renovated to get Lovato and Nykaza back into operation. Other dentists allowed Lovato and Nykaza to see patients in their offices so they didn't lose patients, and they were able to move into their new space five days before their business interruption coverage payments would have stopped, Francis said.
"Absolutely, hands down, the work Kyle and Stanton did was key to the survival of our practices. They just don't teach you how to do this in dental school," Nykaza said. "The new space was like getting a brand-new beautiful car; it was a monster upgrade from the space we had before."
The deal prompted Francis to bring Kensinger into his company, Professional Transition Strategies, that since 2006 has helped about 200 dentists in Colorado and surrounding states buy, sell or start practices, move or stay and expand at their current location and help them with operations, marketing, accounting and other details of practice management.
"In nearly every single transaction I did there was a significant real estate component. My expertise was more in dentistry and the real estate part was difficult to figure out, so I needed an expert to handle that part of the transaction," Francis said. "This is a needed service because there are no practice brokers in Kansas, New Mexico or Wyoming, just two in Utah and seven in Colorado. In a typical transaction, you need to find a buyer and seller that match up, negotiate a contract, determine a price, come up with asset purchase and employment agreements and renegotiate a lease."
The two have completed seven transactions in six months with another 20 in process. Francis expects the company's revenue, about $1 million this year, to double every year for at least the next three years.
Francis plans to operate the company as a social enterprise, giving 10 percent of revenue to Mending Kids International, a Burbank, Calif.-based charity that provides surgeries in 57 countries to correct congenital heart defects, orthopedic abnormalities, severe scoliosis, urological defects, and facial deformities.
"I've always donated 5 percent to 18 percent of revenue to various charities, mostly dental-related," Francis said. "Formalizing this gives us the opportunity to do some good while doing well financially."
Contact Wayne Heilman: 636-0234
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