Preparing Your Dental Practice for Transition: 12 First Steps
For owner-doctors to be assured of realizing the best value from the sale or transition of their dental practice, there are many crucial items to bear in mind. This can be confusing because dentists typically receive input from many different quarters: professional advisors, family, friends and colleagues. Some of the advice is flat-out contradictory. The hard part is funneling all the information into a way forward that fits with your own thoughts and plans.
How does an owner-doctor know when the time is right for them to sell? What steps should you take in order to achieve the result you want?
At Carroll & Company we have analyzed thousands of transitions.From this data set, we have created guidelines to help dentists understand and navigate the complex process of appraising, selling and transitioning their practice.
Here are our suggestions for a 'Twelve Step' approach:
1) Determine your personal, professional and financial objectives. Are you really ready to retire or does it make more sense to reduce your working hours? Is your retirement plan adequately funded? Is your spouse on board?
2) Discuss your thoughts with your family and professional advisors before making any irrevocable decisions.
3) Get your important data and filing systems in order.
4) Make sure your patient records are up to date. Weed out and archive inactive patient files (usually those who have not been in the practice for over two years).
5) Make sure that your legal and accounting advisors are experienced with dental practice transitions. The dental transition market is unique. By selecting a professional with a history of serving dental clients, you will save yourself time and costs.
6) If your dental office is rented, ensure you have a current copy of the lease for your office, and know how much time is left on the lease.
7) Keep the office tidy and declutter. You don't need to invest in cosmetic upgrades, but removing unnecessary items helps prospective buyers get a sense of the space.
8) The practice needs to be professionally appraised to determine the value and sales price. There is no simple formula for appraisals, as there are many variables that feed into the ultimate evaluation.
9) Don't give unscheduled salary raises to your staff. This is something a future buyer will want to do as part of building their relationship with the staff.
10) Staff need to be considered as part of this decision-making process. When you have made up your mind on the transition, tell them sooner rather than later.
11) You need to know the tax ramifications on the sale of the practice. To avoid nasty surprises, consult your tax professional before you pull the trigger.
12) Who is your ideal buyer? Don't just look for another you. The most important thing is to ensure that you share the same philosophy of patient care and that they have the personal and professional skills to make a success of the transition.
At Carroll and Company we have guided thousands of owner doctors through the process of transition. Contact us at email@example.com for a confidential consultation about your future plans.
Carroll and Company