Ready to Sell? A Dental Practice Transition Checklist
You’re winding down and spending more days focused on family and leisure than the day-to-day functions of your dental practice. It’s a common occurrence for many doctors as they near retirement. However, make sure you’re not retiring before you actually sell your dental practice.
The challenge when you start to “act retired” before retirement is that the state of the business may suffer. Therefore, it’s important to keep up your daily rhythm and pace as you get ready to list your practice. This is critical at any point in the life of a practice, but it’s especially true when you are preparing for a dental practice transition.
Review the following checklist before you sell your dental practice:
- Inspect Income and Expenses: Take a good hard look at the actuals. Are you carrying unnecessary overhead? If so, do yourself (and your future buyer a favor), and trim that fat. Engage in a bit of competitive shopping to make sure you’re paying fair industry prices for expenses like lab work and employee salaries.
- Keep Up the Good Work: As we discussed in the opening, many dentists have a tendency to slow down as they near retirement and get ready to sell their dental practice. This is not the time to do so. It’s vital to keep the practice healthy and profitable because your dental practice appraisal will primarily take into account the last three years of your business. It’d be a shame to slow down and have the dental practice valuation not reflect the years of hard work up unto this point.
- Investigate a New Lease: Doctors make ideal tenants because they typically establish a practice and stay in the building for a decade (or longer). Revisit the terms of your lease and make sure you getting the most for your money. Due to the long-term nature of your business, you may be able to negotiate discounts based on longer terms, a consistent payment history, and the benefit to the building owner of having your practice in the building.
- Decorate: Many dentists cringe when there’s talk of décor and the look-and-feel of the office. Despite what your perception may be, it’s an area where a bit of investment can provide a tremendous payoff. A buyer who walks into a visually-appealing space is likely to consider it worth more than if they walk into an outdated, dark foyer. Again, you’d be amazed what a bit of freshening up can do for your patients, staff, and potential buyers alike. If it’s not your area of expertise, hire a consultant to help you or perhaps negotiate a trade with a dental patient who has experience with interior design.
- Stay High Tech: Current equipment and technology is important when moving towards a dental practice transition. You may be perfectly happy with your X-ray machine from 1976, but a buyer is going to have a very different outlook. At the very least, I recommend that you upgrade to digital radiography. You can write off the investment. I also suspect you will find it much easier to use, and it will improve the value of your practice when you are ready for your dental practice transition.
Selling a dental practice is a significant decision. Consult with an NAPB dental practice broker to ensure that you are well-positioned when you are ready to sell your dental practice.