Perhaps your practice has grown too large to be handled alone. Maybe you’re planning to transfer the asset to a partner. In any case, going through with the sale will mark a significant milestone in your dentistry career. When approached correctly, it should prove to be a lucrative and rewarding transaction for all involved.
Of course, the decision to sell your practice cannot be taken lightly. Your business is a valuable asset that represents part of your income and retirement funds. As such, this liquidity event has major financial implications and requires careful forethought as you navigate the transition process.
With this in mind, here are 5 key steps to take when selling your dental practice.
It can be daunting to deliberate the future of your business, especially when it comes to relinquishing an operation that you spent countless hours building and maintaining. Whether you’re still on the fence or ready to hit the market, use the following questions to make an informed and rational choice:
- Am I ready to waiver control of my practice?
- How am I emotionally connected to the business?
- What are my interests or hobbies outside of work?
- Where will my focus shift after the sale?
By establishing a clear path, you can avoid any anxiety or hesitation that could’ve hampered the transition. Remember that selling your dental practice doesn’t necessarily mean entering retirement. There may be an opportunity to continue earning within your own office, such as switching to an associate role upon acquisition.
Create a Timeline
When do you want to initiate the sale? After settling on an approximate date, work backwards and map out any tasks or concerns that need addressing before you can sell your dental practice. For example, how profitable is your business?
It’s wise to keep an accurate record of recent performance figures. This data can be used to highlight crucial factors for your sale, including the current trajectory of your practice and solutions for increasing its profitability. Aim to prioritize the latter in your plans, as the valuation you’ll get is determined foremost by profit margins.
You can attract prospective buyers with well-managed accounts, up-to-date financials and tight control over operating expenses. Are your marketing efforts paying off? What about staffing costs? Take note of any potential room for improvement as you draw up your timeline.
Assemble Your Team
Having the right expertise at your side can also contribute to the sale price of your dental practice. In fact, the guidance of an advisor with industry-specific knowledge and experience is often vital to securing a good deal. A law firm focused on dental practice sales, for instance, can assist in numerous areas of the transfer, including:
- Access to a network of interested buyers
- Efficient handling of paperwork and legalities
- Protection during the selling process
Click here to explore the full range of benefits and services that specialist attorneys offer for dental practice sales.
It can also be advantageous to partner with professionals in the realm of accounting, brokerage and marketing. Who exactly you should hire depends on your needs. A relevant financial advisor might find ways to optimize your cash flow and ultimately raise the value of your office on the market, for example.
At the end of the day, nobody can sell your dental practice better than you. If a buyer is serious, chances are that they’ll ask to see your premises in person. You should be around to facilitate the tour as it’s the perfect opportunity to highlight your key selling points.
Don’t forget to prepare and make sure you’ll be able to provide any information that may be requested of you. This ranges from accounts and management to property lease and regulatory details. It’s also imperative that both parties sign a non-disclosure agreement in advance. A house that appears to be in order leaves a lasting impression.
Assuming all goes according to plan, you will likely start receiving various offers from different buyers. While it can be tempting to close the deal as soon as an appealing prospect shows up, you need to be diligent and thoroughly review each candidate. There’s always more to an offer than the price.
For instance, an associate might be willing to pay more, but risks struggling to obtain sufficient capital. On the other hand, dental corporations typically offer less and make up for it with quick and smooth deals.
It’s clear that a bit of know-how can go a long way. The time and effort you invest in your dental practice before selling it is sure to pay off.