1
Talk to a financial professional
Ideally , by now you have built a relationship with a financial planner or wealth consultant . They can help you think through your optimal retirement timeline and ensure that you ’ ll have the money you need to live the lifestyle you want . Together , you can consider all your expenses ( children ’ s / grandchildren ’ s educations , housing , healthcare ), desires ( travel , relocation , vacation home ), and other factors , such as tax timing and Medicare eligibility .
There is a reason this is number one on the list ! You want to be financially set when you decide to sell so you can take the time to focus on finding the right person to continue your legacy , not the right price tag .
MUST-DOS TO PREPARE YOUR PRACTICE FOR SALE
Dr . Suzanne Ebert , ADAPT VP Dental Practice & Relationship Management
( This piece was originally published in the ADA Practice Transitions ’ ADAPT blog and is printed with permission .)
Whether retirement is imminent or still just a dream , if you are a practice owner , it ’ s time to begin thinking about how you ’ ll eventually transition your practice . After all , sometimes life happens and you must accelerate your plans — which is much easier if you have thought about your desires in the first place !
Ultimately , your practice is worth what someone will pay for it and , most often , what a bank will underwrite a loan for . You know how great your practice is , but how do you get other dentists to see and understand how fabulous it really is ? In many cases , the best place to begin is by looking at your practice through a buyer ’ s eyes . You want to identify , and then highlight , what might inspire them to make an offer .
Keep in mind that all buyers want the same thing : a financially sound practice where they can do the type of dentistry that excites them and keeps them engaged . No matter where you are in your timeline , you can start taking some steps to prepare yourself and your practice to shine for an eventual sale .
2
Realize that buyers want results , not “ potential ”
I ’ ve spoken to many owners who were surprised to get a practice valuation that was less than they had hoped for . In many cases , these owners had scaled back their hours over previous years , resulting in lower collections . Even though the sellers could show fantastic numbers from five years ago , buyers ( and financiers ) were focused solely on recent performance . After all , banks make their decisions based on current numbers and trends . They will not loan money based on the hope that patients will return to the practice .
It ’ s absolutely fine to consider easing your way into retirement . However , realize that it will most likely result in a lower sale price . That could be well worth it to you if it means more time with your family and you are not counting on a high sale price for your financial health as you transition into retirement . Make sure you understand the trade-offs .
If you want to scale back without affecting the practice ’ s bottom line , think about bringing in an associate to keep up production — ideally one who ’ s interested in buying you out when the time is right . Of course , you need to have the patients and space for them to be successful . You can also consider selling now , while your numbers are at their peak , then look for ways to continue practicing . You could negotiate to stay on as a part-time associate , work in a community clinic , teach — explore your options !
26 JULY / AUGUST 2022 | PENNSYLVANIA DENTAL JOURNAL