8 Avoidable Dental Practice Sale Mistakes

Dental ownership demands endless choices from one end of the practice to the other. Dentists make many decisions between crown preps that influence the culture and viability of the business. Mistakes get made along the way, but there’s often time and opportunity to get it right the next time.

An exit plan isn’t so forgiving.

Most dentists only get one chance to get it right. A transition marks a pivot point that dramatically affects the rest of the life journey. Yet we see many unfortunate situations that didn’t need to happen.

There are some cases that you know belong in the hands of the oral surgeon or endodontist. They offer the expertise that provides a predictable outcome. Selling your practice works the same way. A sale involves many moving parts, and it’s not a time to experiment. Designed cohesively, you can enjoy the next phase to the fullest. Done wrong, you could be making unnecessary sacrifices for years.

Armed with knowledge, guidance, and experienced resources, you can sidestep some of the biggest mistakes well-intentioned owners make. You don’t work to build a stellar practice to leave money on the table or tarnish your legacy. There are many more, but here are 8 mistakes to keep in mind as you look ahead:

1. Bringing Unrealistic Expectations

Many dentists overestimate their dental practice value. Good planning includes a valuation, and not just before the sale. An experienced transition specialist can help you estimate practice value without the expense of a formal report. Don’t forget to discuss tax implications with a dental CPA.

2. Selling At The Wrong Time

For many dentists, their practice is the single biggest asset they own, and they’re accustomed to regular cash flow. A thorough analysis begins long before you’re ready to sell. Selling too early can leave income shortfalls, and selling too late may fail to capture maximum value. Transition specialists that understand the process can help you boost your freedom and profits.

3. Relying On Verbal Agreements

Even in the best relationships, assumptions or verbal agreements leave room for problems. Don’t assume anything or make promises that aren’t in writing about the dental practice sale. For example, don’t assume the purchase of real estate in a deal is clear one way or another. This principle doesn’t undermine relationships; it protects them.

4. Making Large Changes During Transition

Improvements to the practice serve as a critical part of a long-term strategy to enhance practice value. But upgrades should be planned as part of an overall strategy that weighs many factors. Full-scale change can disrupt a transition or add unnecessary debt to the equation at the wrong time.

5. Overlooking Essential Communications

In the high-trust, high-touch business of dentistry, relationships deserve special attention during a transition. It may be more complex than you think for everyone involved in the flurry of contracts and agreements. A smart transition plan protects your legacy, your staff, and your patient base with a series of considerate communications.

6. Selling Without A Plan For The Next Phase

Some dentists face a lack of purpose and direction after a sale. Don’t overlook the importance of a plan that includes more than finances. Golf and fishing provide an outlet, but many dentists find stepping away from the center of the dental universe harder than they anticipated.

7. Assuming That Average Works

Dentist retirements have steadily increased since 2013, and COVID’s long-term effects on dental transitions remain unclear. But potential buyers have many practices to choose from in most areas, and they’ll often choose a strong brand or offer a discounted rate for an underperforming practice.

8. Accepting An Unsolicited Offer

If you’re producing above average and haven’t received an unsolicited offer for a dental office sale, it won’t be long before you do. Don’t consider an unsolicited offer even from the best DSO without consulting a practice transition specialist who knows your region. If you accept one, you could leave tens of thousands or more on the table.

Keep Your Eye On The Ball

Unless you’ve built a series of practices or want to move into another market, you’ll probably only make one transition out of the profession. It’s not the time to make mistakes that undermine years of dedicated service and rob one of your most significant assets.

Align yourself with resources that understand the fast-moving markets and everything that goes into selling your practice. In the process, you’ll protect your legacy, maximize the sales price, and boost your retirement funds.

Click HERE to request a free estimate of your practice value and discuss any questions.

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