Posted on Nov 24, 2014
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Posted on Nov 24, 2014
The truth about running a dental practice is that it can at times be very stressful. This causes many dentists to go into retirement before they are ready.
Problems may range from burnout to personal issues – and often once resolved, the dentist may be willing or even eager to get back to work.
However, if you retire, and even sell your practice, too early – you may find that you’ve missed out on thousands of dollars of value.
In order to make sure that it is the right time, and that you are really ready to sell your dental practice, consider these questions below.
Are you financially free?
If you are looking to retire you should make sure you are financially ready to do so.
This means that you are comfortable enough to retire with the lifestyle that you want, regardless of if the sale goes well or not.
You want to be as accurate as possible when planning your future to make sure you don’t later have to settle for a lifestyle that is more frugal than what you’d expected – or that you even need to start working again.
Make sure you hire an expert to help you with the valuation process and to educate you as to other tax consequences. Remember that there are various state and federal regulations you have to meet in preparation for a dental practice transition.
Is the financial climate right?
Most dentists will unrealistically value their practice, and this is expected. If you have been working for years in the business, it’s likely that you will be optimistic about how much it is worth.
This can be more obvious in an economic down market where dentists may try to cling onto old valuations and expectations. The reality, however, is that the value is only determined after the sale.
Regardless of what you believe a practice to be worth you need to hire an expert appraiser and have some interested buyers in order to be sure that you are going to get the kind of value you believe your practice is worth.
Do you have desire to pursue other interests?
Many dentists look to sell their practices and leave dentistry because they’re burnt out – but what they really need is a break, not a retirement.
If you are thinking about leaving dentistry, it is necessary that you have other specific interests in mind that you want to pursue. Otherwise, there is always the likelihood that once you spend some time away you will grow bored, get the itch to start working again and you won’t have the practice to return to.
If you are in a position to sell your dental practice, think of yourself as privileged. However, this is not a move to be taken lightly, so think thoroughly about whether you are really ready to sell your practice, or whether this just a period of stress or burnout, or whether other personal issues are in the way.