You’ve come to the point in your dental career where retirement is on your mind. It’s never an easy decision to come by because it’s a life-altering decision. After years of hard work, it’s only natural to be attached to the blood, sweat, and tears you’ve spent building your business.
All good things, however, must come to an end. You need an exit strategy that keeps the integrity of your work intact while giving yourself a nice cushion when you place your dental office for sale. Take these steps to ensure you start your exit strategy on the right foot when selling your dental practice.
Identify Your Goals for Retirement
One of the most important things to do before anything is to set realistic and attainable retirement goals. Having perspective about why you want to retire should be your priority. Do you want to retire because you have a hectic schedule, or want more time to travel and indulge in hobbies? Whatever your reasoning for wanting to retire, your desired lifestyle versus your gap in savings will guide you on how much profit you will need from selling a dental practice.
Be careful of relying on putting your dental office for sale strictly for retirement funds because it requires very careful planning. Talk to a colleague who has sold their dental practice and brainstorm goals with a financial advisor or specialist from Aptus Exchange.
Get Your Financials in Order Immediately
When you decide you are serious about retirement, you want to immediately get your financial paperwork in order. You will need to be able to supply a prospective buyer with enough information about your practice to help them determine whether to make an offer or not.
The financial information you will need includes, but is not limited to:
- Fee schedule
- Year-to-date financial report
- Production report
- Appraisal report
- Procedure codes
Figure Out Which Exit Strategy Fits Your Needs
Because of the market, technological advances and the rising cost of education, selling a dental practice is different than it was years ago. Young dentists graduate with near crippling student debt, which can impede their ability to establish or purchase their own practice. You need to be able to find the best strategic buyer for your individual needs.
Identify the Best Exit Strategy for You
Option #1: Attract Millennial Buyers
Millennials tend to focus on having a work-life balance and are more geographically flexible when it comes to their careers. If you want to attract millennial buyers, you need to understand what they want. Younger buyers gravitate toward authenticity, sustainability, and technology. Make sure your practice is up to date with the latest technology and advertise on popular social platforms like Twitter and Facebook.
Option #2: Sell to an Associate or Partner
Selling to a partner or an associate is the more traditional route of selling a dental practice. You will need to put a secure succession plan in place for the future. A partner or associate already connected to your practice will be able to continue the culture and dynamics of your practice.
Option #3: Sell to a Group Practice
You can sell to a Dental Service Organization (DSO) or a Small Group Network (SGN). Selling to either of these groups means you will be selling to a corporate party with the experience of running a dental practice.
Option #4: Structure a Practice Pension Plan
With a practice pension plan, the buyer puts a percentage of a seller’s profits into a retirement plan. The buyer will receive a tax deduction while the seller does not have to pay taxes on the sale up front.
