April 6, 2020
How COVID-19 Could Affect Dental Practice Retirement
You’ve worked tirelessly, considered the best transition plan for your dental practice, and are now ready to hang up your proverbial hat. But, with the current state of global affairs, how will this affect your well-laid plans? Here’s how to proceed with your retirement plans in spite of the COVID-19 pandemic.
Up until the outbreak, it was a sellers’ market for dental practices. But now, a slip in demand could cause it to turn into a buyers’ market. However, if the past has set precedence, a shift in the market never materialized during the housing market crash. Alternatively, any subsequent layoffs of associates in a single-owned office could create more potential buyers in the market.
Strong market forces for this potential downturn include not enough dentists being produced, skills gap, student loan leverage, and sellers working longer than assumed, which will all affect the timeline of practices being acquired.
Unlike 2009, the banks have not seized up, and private equity funds are locked into investing money. The cost of practices being acquired would be lowered as a result. Competition and market forces should quickly resume shortly after.
The bottom line is, the longer business operations are interrupted, the higher the chance other market factors coming to a head could affect the value of a practice. What’s more, dentists may choose to stay on longer or look into other transition options, such as joining a dental service organization, to ensure their retirement accounts aren’t affected.
Contact the experts at Professional Transition Strategies to figure out how to keep your retirement on the right track during these uncertain times.