May 31, 2017
When Is the Best Time to Sell a Dental Practice?
Thinking about selling your practice can be overwhelming. We at Professional Transition Strategies (PTS) realize every situation is unique, and we are here to walk you through it. We can help you navigate through this process because we have been there and we know the components needed for a smooth transition. Regardless of what stage you’re at in selling your practice, here are some questions to consider.
Should I sell my dental practice?
Every doctor who owns a dental practice should eventually plan to sell. With proper planning and assistance, many will get paid well for their life’s work; others will miss opportunities because of fear or misinformation and net only a fraction of the worth of the practice. Waiting until you absolutely need to sell your practice because of financial reasons or life events can put you in a rush, which typically doesn’t result in the best value for your practice. Consider selling your practice before you need to so you don’t walk away from a valuable asset.
When is the right time to consider selling my dental practice?
As doctors grow older, their needs and circumstances will change. Change can be stimulated by disability, divorce, IRS judgments or just being burned out. As previously stated, you should try to think of selling your practice as a carefully planned event and not resort to an emergency or need-to-sell decision. If a personal crisis dictates the sale, the sale becomes more difficult with a greater risk of lost revenue. For best results, plan early so that you can control the outcome.
What are some key indicators to look at when selling my dental practice?
It’s not always obvious when the perfect time to sell your practice is; however, there are some key indicators that show it may be time to think about selling. Here are a few to consider:
- Has your practice gross flattened out or started to decline?
- Is your body in the office but your mind is on the golf course or traveling?
- Do you want to cut back due to stress or fatigue?
- Is your body starting to feel the effects of practicing?
- Are you tired of managing and motivating your staff?
- Do you want to take quality time off without worrying about overhead?
- Are you thinking about broadening your interests outside of medicine or dentistry?
- Do you want to convert the equity in your practice to an interest-bearing investment and still maintain control of the practice and your future?
- Are you tired of uncommitted associates who take advantage of you?
If any of these apply to you, it may be time to think about selling your practice. The earlier and more controlled the sale is, typically, the better the result is.
Why can’t I wait a few more years to think about selling my dental practice?
None of us can be sure we have a few more years to practice at our current level. It is important to sell before your practice declines in net income, patients or revenue as that is a red flag to buyers and financial institutions and could negatively affect the selling price of your practice. Selling out of necessity takes you out of the driver’s seat. The best time to sell is when things are going well. No one wants to buy a practice that is on the decline.
What should I do to prepare for the sale of my dental practice?
The first step in preparing to sell your dental practice would be to have a comprehensive practice appraisal conducted to determine ways to make your practice more profitable and valuable. This ensures you are investing the time and effort so your practice is in the best financial and operational shape possible before you begin the process of selling. Most likely, you have invested a lot of time, money and effort into your practice. You want to make sure it’s in the best shape it can be before selling it so that you will get paid well for your life’s work.