Dental Practice Broker Articles
Consider the Triad (Emotional, Practical, Financial) when Selling a Dental Practice, Part 1
For many doctors, being a dentist is your life’s work. It has been your livelihood, and it has provided a rewarding and satisfying career. When you come to the point when you’re considering selling your dental practice, it can be difficult to set aside the emotional attachment to the joy of the work and be objective about the realities of what is often your most valuable possession.
It’s important to assess the practical and financial components as you embark on a dental practice transition. I have found that this is best done with the help of an NAPB dental practice broker.
There are a number of ways to approach a dental practice transition. Every seller is unique so it’s important to get clear about your objectives. Ask yourself the following practical and financial questions:
- Are you planning to retire when you sell your dental practice or will you continue working in the practice?
- Are there any changes that need to be made as far as staffing to make the practice run more efficiently (and perhaps ensure a higher dental practice valuation/appraisal)?
- What percentage of your overall net worth depends on the dental practice appraisal?
- Have you thought about the tax implications when selling your dental practice?
For most doctors, you’re not thinking about the specifics of a dental practice transition until you are ready to move into the next phase of life. Dental practice transitions are as varied as the dentists who embark on them. Some doctors are ready to sell their dental practice at age sixty and retire entirely, while other dentists are well into their seventies and still seeing patients (albeit perhaps these doctors are working fewer hours per week).
Did you know that 6 out of 10 dental practices are forced to simply close up shop? You’ve spent so much time and energy building up a practice; it seems a shame (and emotionally this is the most difficult scenario for the doctor, their staff, and their patients). When you are ready to sell your practice, I want to help you get clarity about how you can do so and walk away maximizing your emotional, practical, and financial return.
As I mentioned before, sometimes a doctor plans to sell their practice more than once. We always tease my father that it has taken him three “attempts” before he actually retired. Fifteen years ago, practically and financially, it made sense for him to bring in a partner, selling half the dental practice, growing the practice for another ten years, and then selling the entire practice at the end of that decade. In my father’s case, the larger financial payoff came during the second sale, but there was a huge practical and emotional payoff by being in business with another dentist and cultivating their staff and practice style together during that time. He then consulted with practices for a few years before he completely retired.
75% of your dental practice value is measured by intangible metrics. Unlike a vehicle, where a prospective buyer can literally kick the tires, it’s impossible to guarantee that patients will continue to come to your practice. This is where a dental practice broker is your finest partner. Also, unsurprisingly, selling a dental practice can be an emotional experience. From your perspective, the books are in the black, you’re booked up a month in advance; it’s obvious that the practice is flourishing and profitable.
NAPB brokers have handled over 1000 successful dental practice transitions and an NAPB broker is integral when considering a dental practice transition. A reputable dental practice transition consultant can act as a vital translator and important mediator to keep all parties emotionally, practically and financially on track.
Please reach out and talk to a dental practice transition consultant today. We can help you consider your next steps.
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