Best Time To Sell A Dental Practice: 5 Questions To Ask Yourself
Thinking about selling your practice can be overwhelming. We realize that every situation is unique, and we are here to walk you through it. Professional Transition Strategies can help you navigate through this process because we have been there and we know the components needed for a smooth transition. Regardless of what stage you’re at in selling your practice, here are some good questions to consider.
Should I sell my practice or not?
Every doctor that owns a practice should eventually plan to sell. With proper planning and assistance many will get paid well for their life’s work. Others will miss opportunities because of fear or misinformation, and net only a fraction of the worth of the practice. Waiting until you absolutely need to sell your practice because of financial reasons or life events can put you in a rush, which typically doesn’t result in the best value for your practice. Consider selling your practice before you need to, so that you don’t walk away from a valuable asset.
As doctors grow older, their needs and circumstances will change. Change can be stimulated by disability, divorce or IRS judgments, or just being burned out. As said above, you should try to think of selling your practice as a carefully planned event, and not resort to an emergency or need-to-sell decision. If a personal crisis dictates the sale, the sale becomes more difficult with greater risk of lost revenue. For best results, plan early so that you can control the outcome.
It’s not always obvious when the perfect time to sell your practice is. However, there are some key indicators that show it may be time to think about selling. Here are a few to consider:
- Has your practice gross flattened out or started to decline?
- Is your body in the office, but your mind is on the golf course or traveling?
- Do you want to cut back due to stress or fatigue?
- Is your body starting to feel the effects of practicing?
- Are you tired of managing and motivating your staff?
- Do you want to take quality time off without worrying about overhead?
- Are you thinking about broadening your interests outside of medicine or dentistry?
- Do you want to convert the equity in your practice to an interest bearing investment, and still maintain control of the practice and your future?
- Are you tired of uncommitted associates that take advantage of you?
If any of these apply to you, it may be time to think about selling your practice. The earlier and more controlled the sale is, typically, the better the result is.
None of us can be sure we have a few more years to practice at our current level. It is important to sell before your practice declines in net income, patients or revenue as that is a red flag to buyers and financial institutions, and could negatively affect the selling price of your practice. Selling out of necessity takes you out of the driver’s seat. The best time to sell is when things are going well. No one wants to buy a practice that is on the decline.
The first step in preparing to sell your practice would be to have a comprehensive practice appraisal conducted to determine ways to make your practice more profitable and valuable. This ensures that you are investing the time and effort so that your practice is in the best financial and operational shape possible before you begin the process of selling. Most likely, you have invested a lot of time, money, and effort into your practice. You want to make sure it’s in the best shape it can be before selling it so that you will get paid well for your life’s work.
Regardless of where you are at in the process of selling your practice, we are here to help. You can learn more about us and the process on our website or reach out to us at any time.