Dr. Smith ran a reputable practice for 32 years in a growing community. She had built a loyal patient base, a dedicated staff, and a thriving business. But after decades of hard work and focus, she was ready looking ahead to retirement within a couple of years to spend more time exploring other interests.
However, selling her practice was not an easy decision.
Dr. Smith had poured her heart and soul into the business and wanted to ensure it would continue thriving under new ownership. She knew the process would be complex and overwhelming, but she was determined to make the transition smooth. Her local DDSmatch Professional helped her organize the steps for a manageable approach to this monumental change in her life.
If you’re a dentist considering selling your dental practice, there are many keys to a smooth transition. Here are ten things you’ll want to do as you navigate the process:
- Start with your vision for tomorrow: Most dentists feel like Dr. Smith; selling your life’s work comes with mixed emotions. Spend quality time exploring why you’re ready to retire and how you’ll structure your days. Will you volunteer, teach, start another business, or travel? Have you always wanted to write a book? It’s essential to design your life for the next stage with the same intention you poured into your dental practice.
- Get your financial records in order: Ensure that your accounting records are up-to-date and accurate, and organize all financial statements and tax returns for the past 3-5 years. Audit your internal practice analytics and ensure the most common metrics reflect a healthy enterprise. We utilize Dr. Charles Blair’s Clinical Treatment Optimizer to identify procedure mix, growth opportunities, and more in a detailed 70-page report.
- Talk with an experienced Transition Professional: Many dentists think of a dental “broker” as someone who helps find a buyer and set up a contract. At DDSmatch, we support every aspect of the sale process, even if you’re a few years from selling. We can help you navigate the steps and find qualified buyers, but we can also help you sort through options and design the ideal exit strategy.
- Prepare your practice for sale: Make necessary repairs, update your equipment, and ensure your facility is in top condition. A well-maintained practice is more attractive to potential buyers. Be careful with major equipment upgrades, and discuss the potential ROI with your transition team before investing. Cosmetic remedies, like carpet and paint, can help boost a potential buyer’s perception of your facility. But a new CBCT machine a year before the sale may not be the best move. Every practice is different, and we can help you make decisions that boost your practice value.
- Determine your practice’s worth: Get an accurate practice valuation from a professional appraiser experienced in this unique process. We use only Certified Valuation Analysts by Blue & Company to provide the most comprehensive appraisal of your practice. This team includes specialized Certified Public Accountants focusing on medical and dental practices. A detailed valuation creates trust with lenders and buyers and helps you capture the value you deserve.
- Spend time with your financial team: Dentists are accustomed to predictable monthly income, and cash flow often changes after selling the practice. Practice proceeds bring tax consequences, and investments can fluctuate with the economy. Discuss taxes with your CPA, and work with a comprehensive financial planner to design a strategy that produces income and peace of mind. If your sale includes real estate, we work with professionals that have real estate licenses and can help structure this aspect, too.
- Create a detailed marketing plan: Finding the right buyer takes time, but leveraging technology with the human touch can streamline the process. Work with a transition team that utilizes a multi-channel approach to target potential buyers. At DDSmatch, we identify your unique practice profile and share it confidentially with our extensive network of pre-screened candidates. When working with a transition team, ensure they’re actively marketing with the latest techniques.
- Find qualified buyers: Your Transition Professional should understand the unique characteristics of your region and buyer pool. This may include other dentists, dental groups, or private equity firms. Each buyer type brings conditions that influence the structure of your exit. We work closely with our clients to explore all the options and the pros and cons of each.
- Negotiate the terms of the sale: Once you’ve found a potential buyer, you’ll want to negotiate the terms of the sale carefully with sound advice by your side. A deal includes the purchase price and payment terms but may also include how long you stay with the practice, non-compete agreements, and much more. For example, a DSO deal could mean you continue working for another five years. We can help match your goals to the right buyer and overall exit plan.
- Plan for a smooth transition: Work with the buyer to ensure a smooth ownership transition. Consider the complex psychology of everyone in the process, including the staff, patients, and overall community. A thoughtful change includes patient letters, announcements, staff meetings, and an open house. A clear communication plan can minimize disruption, including patient and staff attrition. As a result, you can set the new owner up for success while protecting your legacy and reputation.
Ten Steps and Beyond: We Can Help.
You’ve spent years providing exceptional dentistry, and you understand how much goes into achieving quality results. Selling your dental practice is like placing a composite; it looks easy, but it takes many precise steps to produce the outcome you expect. You know you can’t skip a bonding application or curing a layer without undermining the result.
A dental practice transition relies on well-executed steps and tools, too.
At DDSmatch, we help clients navigate these ten steps and many more. Our Trusted Transition Process is a proven system for guiding one of the most monumental moves in your life. But you don’t have to know exactly when you’ll exit dentistry to start planning; whether you’re six months or six years from a career change, we can help you sort through the options in today’s complex market. Reach out and start the conversation today. We’d love to discuss your dreams and help you design an outcome that fits you.
