Selling a Dental Practice
Custom Dental Practice Exit Strategies So You Enjoy Life after Dentistry
Any Dental Practice Transition Decision whether it be Buying a Dental Practice or Selling a Dental Practice is one of the most important events that will happen in your professional career as a Dentist. Transitioning your dental practice that you worked so hard for your entire life will be one of the largest business decisions a dentist will have to go through. Making a mistake in the dental practice transition process can have long-lasting effects on any or all of the parties of a dental practice transition. It is much more effective and in fact, cost efficient to engage a dental industry professional that deals with these types of transactions on a daily basis and knows all the “ins and outs” of the dental business. Our 40 years of Dental Accounting and Dental Practice Transitions experience has allowed us to develop a proven system that guarantees the sale of your dental practice. We still are amazed at how stress free and easy some of the dental practice sales seem. This wasn’t always the case as in the past the majority of dental practices sales had hurdles or road bumps to get around. Our dental practice exit strategies are custom built based on our analysis of your dental practice and the sellers personal desires / wishes allowing you to enjoy life after dentistry.
Selling a dental practice is a long drawn out sales process with the average dental practice sales process taking over 6 months to complete from start to finish. Even if a full price offer is received that the dental practice seller accepts from a dental practice buyer on the first dental practice showing or the first day the practice hits the market, the dental practice sales process usually takes 60 – 90 days to complete. The dental practice sale definitely could take longer depending on the time of year, as we recommend the buyer be fully credentialed before they step foot in the practice. We represent the seller side in the majority of our transactions so we will not allow our dental practice seller clients to allow a dental practice buyer to use their EIN / TIN for insurance billing after the sale.
There are different reasons for dentists to consider selling, the most common of which is retirement. Other reasons a dentist may decide to retire may be relocation, disability, specialization, or for other personal reasons. Whatever the reason, the first step is to be sure that you have made the decision to sell your dental practice for the right reasons and are comfortable with that decision. Often, dentists list their practice for sale and when a ready, willing, and able buyer comes along they realize they are not ready to sell and that they would miss the dentistry, patients, etc.
Retirement planning is critical when making the decision to retire from your dental practice. The amount of money that will be received from the sale of the dental practice is not going to meet your retirement needs. So the first step in making the retirement decision is to have a Financial Planner prepare a financial plan that provides the information of what the financial needs and projections are for your specific lifestyle. Schiff Wealth Advisors can accommodate you with this service and it is included with listing your practice.
Once you are comfortable with your retirement planning, you should optimize the dental practice so that it sells for the highest value. The largest contributor to increased value is increasing the net income. This means improving systems, lowering overhead, and not allowing the dental practice gross income to decline.
We find that buyers of dental practices today are looking for High-Tech offices but one big mistake that sellers of dental practices make is excessive capital expenditures right before they list the dental practice for sale. This is not to say that cosmetic improvements should not be done. Things like Carpet, Paint, and Furniture can make a significant difference in the sale-ability of a dental practice. The most important asset of a dental practice sale is the goodwill, patients, staff, and the functionality of the practice.
Please be careful of trying to save money on the commissions and selling your practice without a qualified dental broker as the you as the seller can lose thousands of dollars in Legal, Accounting and Advertising fees and most important your time, and not even sell the practice.
Please make sure you engage an experienced dental broker that is educated in the dental field and has the ability to accurately determine the “economics” of your business. An experienced dental broker has knowledge from previous transactions and has established relationships and resources you will need to complete the transition.
A dental broker has resources with dental financing, equipment specialists as well as commercial real estate lease specialists, just to name a few. A dental broker will help you obtain the market value of your practice, advertise and market your practice, keep the transaction confidential and save you time and aggravation. A dental broker will handle all correspondence to include, emails, phone calls, and the showings that can take place after business hours.
By using a dental qualified broker like Schiff Dental Brokerage, you will be assured that you only pay a commission fee when the transaction is complete. A dentist should engage a dental broker to sell their practice just like I would hire a dentist to do a root canal. I wouldn’t just look in the mirror and try the root canal on my own part! In effect, “stick to” what you do best!
A dental practice is truly worth what a buyer is willing to pay for it. We are currently in a Sellers Market as there are hundreds of buyers out there but not enough listings. The majority of our recent sales ended up in a bidding war between multiple buyers therefore our recent sales prices are record setting. Our last sale sold for 100% of annual collections!!! Contact Us to Find out the details.
If you are thinking about the sale of your dental practice contact Eric Schiff with Schiff Dental Brokerage today to find out how you can get top dollar for your practice. Many of our sellers stay on long term as well if the practice is large enough to support multiple dentists. Please fill out the confidential consultation request form below. All inquiries are held in the strictest of confidence!!!