Anyone who pours their heart and soul into a business over an entire career, building lifelong relationships with those they serve, mastering a skill that can change peoples’ lives, has a hard time facing the thought of ending it for good. The notion of losing a “second family” or “my baby” in any context can be heart-wrenching when it comes time to sell a dental practice.
Thankfully, the team at PMA Practice Transitions has helped numerous dentists transition their practices and get ready for this next adventure in their life. Through these experiences in dental practice sales, our team is able to answer your questions as it relates to selling a dental practice.
Here are the most common questions our team is asked:
Am I financially ready to retire?
This is the most important question to ask yourself, and likely what primarily dictates one’s readiness for retirement.
It seems that most dentists fall into one of two situations:
- Those who have been more conservative and diligent with their income and have enough savings or investments to live a long and happy life within their means, or
- Those who have lived a life of grandeur that may or may not exceed their savings and/or retirement income.
Money can obviously be a major driver for how and when you sell your practice. That’s why ideally, we like to engage dentists three to five years ahead of retirement, so that together we can start planning for the most profitable exit possible.
What is my dental practice worth?
There are key factors when it comes to determining the value of a dental practice. Don’t be misguided, there are far too many intangibles that play into a practice’s value that a simple percentage of gross collections or production equation can’t adequately account for. Here are a few examples of other intangibles that need to be reviewed:
- Gross Income / Collections
- Net Income / Profitability
- Accepted Insurance Plans
- Accounts Receivables
- Management of Expenses
- Curb Appeal & Aesthetics
- COVID Rebound
- Practice Location
- Location Demographics
- Lease Terms (if applicable)
- Staffing & Salaries
- Dental Equipment
- Dental Technology
- Services Rendered In-House vs. Referred Out
- Transition Time Frame
And the list goes on. To ensure your dental practice has the correct value and there are no surprises, a practice appraisal should be performed three to five years before you are wanting to sell. This will ensure you are getting all the right facts and figures before you sell.
What will I do once I am retired?
Dentists are used to providing a high-quality service that can dramatically impact peoples’ lives and overall well-being. Most dentists sincerely enjoy being of service to others, as that is a primary reason they became doctors in the first place.
But what is life like after that?
When you retire you free up so much of your time by not having to run your business and practicing dentistry.
Retiring dentists don’t want to become stagnant or complacent. They would much rather contribute to society, have hobbies and passions that drive them, enjoy time with family, travel, etc.
Having strong interests outside of the office will help you realize that there is more to life than practicing dentistry. And in many cases, you can still be involved in the dental industry whether it’s working part-time, working for a charitable cause, in the educational sector, etc.
The ADA published an informative article about the multitude of careers closely related to dentistry.
- Dental Support Organizations
- Dental Clinical or Business Consulting
- Dental Product Companies
- Dental Insurance Companies
- Research and Development
- Federal Services such as Military and VA
- Federal Public Health Services
- Additional Education
You have such an amazing skill set in dental medicine and are well-equipped to put your years of knowledge and experience to great use. Even something like being a mentor to a younger dentist(s) will allow you to still contribute to the field you love so dearly.
How do I find the best successor for my dental practice?
There are a few ways to find a suitable successor to your dental practice. However, there is a catch: How do you do so without having your patients or staff find out?
Think about what would happen if your staff found out you were selling and word got out. Would your staff start thinking they may not have a job in the coming months? What happens to the value and saleability of your dental practice if many of your staff members (or patients) leave?
Transition consultants offer a confidentiality buffer between you and a potential successor, preventing your staff and patients from knowing about the potential sale until it’s been solidified and contracts signed.
Once contracts are signed, the team at PMA will work with you to help introduce the staff and patients to the new dentist for a seamless transition and to maintain the value.
Should I continue working in my practice after it has sold?
Some dentists want to hang up the drill immediately after closing and some prefer to stay on board for a couple of months. There is no right answer, it’s all about what you and the acquiring dentist want, and as long as there is a meeting of the minds, any timeline is possible. Just make sure everything is detailed in the contract so that both parties know what the plan is.
How do I properly say goodbye to my patients?
There are a few ways to properly hand off your dental practice and say a final goodbye to the people you’ve served for so many years…generations even.
The best way to get started is to send a letter and email to your entire patient base, thanking them for their years of loyalty and introducing them to the new dentist. This will help your patients get to know the new dentist and feel more comfortable about the transition.
Other ideas include hosting an open house to celebrate the retiring dentist and introduce the new owner. Or, go all out and throw a huge party for yourself and invite all of your friends, family, and patients!
At what age should I retire?
The beauty of retirement is that it happens on your schedule. Please note, you don’t want to wait until it’s too late and you are forced into it either. That is why we recommend you start planning at least three to five years out, so you can be mentally, physically, and financially prepared to thoroughly enjoy the golden years of your life.
We Are Here To Help!
Are there additional questions you have about selling your practice? Or maybe you are ready to sell and want our team to get the process started. We are happy to help, contact us today! Our dental transition experts are ready to answer any questions you may have or to get the process started to sell your dental practice.