Common Concerns When Selling A Dental Practice
The process of selling or merging a dental practice is an intricate process. It includes not only the financial and physical challenges but emotional ones as well. At Professional Transition Strategies, we can help you navigate through this process, starting with addressing your concerns. Here are some common concerns when selling a dental practice and information that may help mitigate them.
What’s going to happen?
Fear of the unknown is by far the most common concern that doctors have when considering selling their practice. There are many moving pieces to consider, including the cost of the practice, the future well-being of staff and patients, the time it will take to sell the practice, and whether or not selling is the best choice.
The thought of retiring can be unsettling as well, especially if a retirement plan has not yet been established.
At Professional Transition Strategies, we guide you through the entire transition process, from appraising your practice to the final paperwork. We can help you navigate through this process because we have been there and we know the components needed for a smooth transition. We realize that every situation is unique; and we will help you decipher which option is best for you.
What about the future of my staff and patients?
The future well-being of staff and patients is a concern that many doctors have when transitioning their practice. Many doctors develop long-term relationships with their staff, and want to make sure everyone is taken care of. In the same way, you also want to make sure that future patients are receiving the same level of patient care that you provided.
Though we can not guarantee that staff will remain employed by the future buyer, we do instruct all buyers not to change anything in the practice for at least six months. This gives the employees a chance to “win” their jobs or look for employment elsewhere. We understand that the future of your staff is important to you, and we do our best to help manage this transition.
Will I meet my financial goals?
Though this is not high on the list of concerns, meeting financial goals is always an important consideration for anyone selling a practice. Many owners have invested many years of their career in their practice, and making sure they are receiving the right monetary value for it, is important. At the same time, setting yourself up for the future is an important consideration as well. We do our best to make sure that you reach your financial goals when selling your practice.
What is the Timeline?
Many owners struggle with the idea of selling their practice because they don’t know how to begin the process, or what that process even looks like.
We’ve developed a valuation calculator, available on our website, that’s a quick and easy way for owners to estimate the value of their practice. This tool, combined with the information on our site, is a great place to start if you are considering selling your practice and don’t know where to begin.
The unestablished timeline of selling a practice can also be unsettling. Many times, doctors think that the day they list the practice they will sell it, which is why many owners are hesitant to begin the process. On the flip side, some owners need to sell their practice quickly, and the length of time it can take to find the perfect buyer, as well as go through the closing documents, can be stressful.
Although every practice transition is different, for a practice in a major metro area, the average time it takes to sell is typically about 6-12 months. It may take as long as 3 years in smaller rural communities. Specialty practices may take longer or shorter depending on the practice and location.
Should I really sell right now?
As doctors grow older, their needs and circumstances will change. Their capabilities and stamina also change as their biological clocks wind down. Change can be stimulated by disability, divorce or IRS judgments, or just being burned out. You should try to set the sale of your practice as a carefully planned event. If a personal crisis dictates the sale, the sale becomes more difficult with greater risk of lost revenue.
It is also 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.
For best results, plan early so that you can control the outcome. The longer you wait, the opportunity to plan and direct the course of the sale diminishes.