If you are at a point in your career as a dentist where you think you are ready to slow down or even retire in the next few years, you should start preparing to sell your dental practice. Getting started can feel daunting, but it doesn’t have to. It’s important to understand your options, research, and identify the right partners to prepare your business for a smooth transition. The right partner will help you understand how to get your finances in order before selling your dental practice and will help you understand your transition options.
There are several different transition options. Your transition options are influenced by the size, location, and overhead of your business. Dental facility ownership and/or lease arrangements also affect your transition options. The first transition option is selling your practice “turn-key” and retiring completely. Another option is to hire an associate and set a date for the associate to purchase the practice in the future. You can also sell now, then be an employee of the buyer. The last option (for larger practices) is to divide your business and sell just a portion of your practice. A broker can work with you to guide you to the transition option that best fits your practice and future plans.
Before you consider your transition options, it is important to have a solid understanding of the financial state of your practice including an accurate practice valuation. If your practice is valued too low, you’ll miss out on money you may need for your retirement and if your practice is valued too high, your listing can languish on the market for years. To get an accurate valuation, work with an experienced dental practice broker to help you accurately value your practice. A proper valuation will involve answering questions about your practice and providing practice income tax information and other records to calculate the right price for your practice.
Once you’ve decided that a practice transition is in your future, get in touch with a dental practice broker to understand your options, determine the value of your practice, and prepare your practice to get the highest return.