Why You Need an Emergency Exit Plan | Baltimore Dental Brokerage
Dental Practice Sales & Transitions
Planning ahead is always a smart idea, but what if tragedy changes everything? If you were suddenly disabled or died, what would happen to your dental practice? Who could run it, value it, and sell it?
It’s not a topic people enjoy, but it’s necessary to consider the “what ifs” to minimize sudden financial loss in case of death or incapacity. Without an emergency exit plan, a practice may remain unsold for a long period and its value may decrease. The ensuing chaos would leave an undue burden on family, associates, and others who may not have access to accounts and records.
No matter how healthy or young you might be, it is important to create an emergency exit strategy. Here are four tips to consider.
Amend Your Will
A supplement, or codicil, to your will gives key people directions on how to continue operating your practice if you can’t. It allows you to name someone who will succeed you, run the books, and deal with legal issues. This can be an equity partner or a family member.
Create a Letter of Instruction
This document creates a list of immediate steps to take if you pass away or become incapacitated. It should include information about your insurance policies, where key documents are stored, and a list of people who can act on your behalf. These individuals might include your spouse, attorney, accountant, dental broker, transition advisor, and suppliers.
Get a Dental Practice Appraisal
Periodic appraisals will not only help you understand where you could make improvements; it will also serve as an up-to-date valuation if your family is forced to sell.
Get your practice appraised and share the information with your trusted circle. Appraisals should be done about every 18 months or when you add new equipment.
Create an Exit Strategy
When you think about extreme circumstances, you’re likely to take inventory of where your practice is right now. It’s wise to make upgrades and changes sooner rather than later. Consider how you can create the most profitable version of your office, upgrade the physical space and equipment, and ensure your team is optimally trained.
If you’re thinking about an exit strategy, selling your practice or need a dental office valuation, reach out to our brokerage team.