Selling A Dental Practice
At some point in your career, you may contemplate selling your practice. Perhaps you may wish to relocate, change careers, reduce your workload, or simply retire. Whatever the reason, you should know that selling your practice is a complex process that unfolds over several months (or years). It is not simply a matter of finding a buyer, coming to terms, and picking up a check. We describe this phase of your career as a “transition” because it’s a word that connotes a sense of both time and change. Transition further highlights the fact that we are dealing with a process, not an event.
Over the years, Legacy Practice Transitions has dedicated ourselves to understanding what really takes place during the dental practice transition, how to make the process better, smoother, and far more profitable for our clients. In fact, our very own name, Legacy, was chosen to represent the Legacy that you have created over the years – with patients, with staff, and with the community. Our vast experiences as dental practice consultants have allowed us to develop and refine a truly superior method of transitioning professional practices.
What Do You Want to Achieve By Selling Your Practice?
There are many reasons why it might be time to sell your dental practice. Regardless of the reason, you want to make sure that your goals are achieved by hiring the right dental transition consulting company. The transition of a dental practice is a more complicated process than meets the eye. Whatever the reason, the process of selling a dental practice requires experience and deep working knowledge of the transition space.
- Maximum Financial Return: To ensure you’re getting the maximum value for your practice, it’s important to have a practice evaluation as soon as possible. With Legacy Practice Transition’s experience in selling dental practices, we help you identify the right buyer, the right time to sell, and the proper evaluation of your dental practice to make sure you get the maximum financial return that you deserve, and in particular, making it tax efficient for you as a seller.
- Transition On Your Timeline: Proper planning is the most important thing you can do to ensure an on-time transition. If you have a retirement date in mind, it’s never too soon to have a conversation regarding the transition plan for your practice. Dependent upon multiple factors, you could begin your “retirement plan” 15+ years before the actual desired date, and almost triple the sales proceeds by waiting to transition on your original planned exit date! Transition to the next phase of life on your timeline.
- Retire Financially Secure: Many dentists hope to retire in their early to mid-sixties like many of their peers but find they cannot retire due to a lack of financial security. A transition strategy should be put into place well before your anticipated retirement date. You can retire with financial confidence, knowing you took the correct steps during your career in preparation for retirement.
- Relocation: When you’re looking to move to another town, city, or state, not only do you need to buy a new dental practice, but you also need to sell your current practice. We can locate an ideal practice for you to purchase in the area you want to move to and find qualified potential buyers for your current practice. You may even be able to defer some taxes in the move.
- Maintain Some Income by Becoming Property Landlord: While retirement sounds appealing, you still might want an income source. You can do this by leasing the property to the new dental practice owner. You get the benefits of the cash flow as well as the equity of the commercial property.
- Selling Your Dental Practice to a Family Member: Many dentists have children who are dentists. While it may seem uncomplicated to simply hand over your practice to a family member, it becomes an issue if you’re depending on the money from the sale of your dental practice for retirement. There are also tax considerations unique to selling to a related party that could come into play. There’s a delicate balance when selling to a family member. An experienced dental practice advisor can assist in facilitating a successful transition to ensure all party’s emotional and financial needs are met and everyone is comfortable moving forward.
- Estate Sale of a Dental Practice: In the event of an untimely death of a dentist, the family of the dentist may be unsure about what to do about the dental practice. It’s important to have an evaluation of the practice done quickly and sell the dental practice right away. Having a plan in place will help eliminate the guesswork about the value of your practice. The Legacy Protection Plan was designed for this scenario and will benefit the family and estate. Upon the death of a dentist, the dental practice value may depreciate by ten percent every week for the first six weeks. After that, there will be very little value left in the practice. Talk to Legacy today about its Legacy Protection Plan, which will help the estate in such a traumatic and difficult time.
- Pre-Sale Transition: Legacy Practice Transitions offers a Pre-Sale Program designed for the dentist who wants to retire, but still needs or wants some clinical income. The buyer and seller work in the practice together for a predetermined number of years. This adds flexibility and financial confidence as you transition into retirement. This program can also be structured as deferred if it best meets the needs of both parties. It allows you to reduce or eliminate managerial responsibility, maintain income, and get the equity out of your practice today. It is also a very viable option for dentists who wish to achieve these benefits without selling to a DSO.
Do You Know What Your Practice is Worth?
There is no empirical formula for anyone to arrive at the exact value of a dental practice. However, the experience of the firm performing the evaluation and the knowledge of the individual assigning the value is important. The value of the dental practice considers tangible assets, intangible assets, demographics, practice history, and financial data. Every consultant at Legacy Practice Transitions understands how all the factors blend with current market trends to ultimately arrive at a fair market value. A professional evaluation from Legacy Practice Transitions is the key to unlocking immediate and future options you may have as a practice owner.
If you’re looking to sell your practice in preparation for retirement or relocation, a consultation with Legacy Practice Transitions will give you the opportunity to find out how much your practice is worth. We will complete a fair market evaluation based on an economic profile of the practice which includes location, facility, equipment, and assets, practice maturity, the experience of staff, total receipts, net profitability, management systems, the composition of patients, referred procedures, and other similar factors. Equally important to the total value of the practice will be allocations of the value for purposes of tax considerations. Remember, it’s not what you sell the practice for, but rather how much you get to keep! The sooner you have a dental practice evaluation completed, the better prepared you are for the future.
Legacy Protection Plan
At Legacy Practice Transitions, we’ve seen many unfortunate circumstances where a dentist becomes injured and can no longer work or passes away unexpectedly. Their family is left scrambling because they do not know how much the dental practice is worth, leaving them vulnerable to predatory offers and may even cause financial ruin.
Whether you’re preparing for the future or the unexpected, talk with Legacy Practice Transitions about our Legacy Protection Plan. For a minimal fee, we perform an evaluation of your practice and then update it annually for no additional charge. Whenever the time comes to sell your dental practice, the cost of the Legacy Protection Plan is deducted from our usual and customary fee for selling your practice.
Many dentists sign up with the Legacy Protection Plan because it prepares them, their families, and the practice for future or unexpected events. Our partners are pleased by how helpful our annual evaluations are at keeping them updated on the current value of their business.
Why It's Important to Have Legacy Practice Transitions Broker the Sale of Your Practice
Transitioning dental practices is more complex than selling real estate or a corporate business. The nuances of this niche industry are foreign to most “brokers”, who treat this as a transaction. Successfully transitioning a dental practice is not a transaction or an event. It’s a lengthy process that can easily get derailed without a comprehensive understanding of the transition space and years of experience to address and overcome obstacles. To effectively “sell” a dental practice, we spend countless hours understanding your needs, future goals, and current opportunity. Legacy is an experienced and dedicated dental consulting company that has been transitioning dental practices across the country for over 30 years.
Our experience has yielded successful results for all parties. Conventional negotiations can cause expensive delays, adversarial relationships, and even result in deals falling apart. Legacy Practice Transitions believes the process should be built on trust and open communication. This allows both the buyer and the seller to achieve their goals.
For the seller, this means that we take the time to understand your objectives and protect you from being compromised. After all, it is the seller that has a lifetime of hard work and effort at stake. For the buyer, this means that we develop a keen awareness of their goals and aspirations, and we do everything in our power to assist them in accomplishing those goals. It also means that we take great care to make sure that the two clients in a transition have compatible goals and objectives. Our goal is an Equitable Transition for both parties.
In preparation for contracts, we’ll discuss a variety of topics, including but not limited to:
Our Experience is Your Advantage
Everything about your career, your practice, and your goals are unique to you. There are no two doctors that have an identical vision for their future. No two dentists have the same financial objectives, managerial concerns, physical status, or retirement timeline. Every transition we handle is custom to you and your needs. There’s no right or wrong decision, there’s only what is best for you.
DSOs have established themselves as a player in the dental landscape. If you’re considering selling your dental practice(s) to a DSO, talk to Legacy Practice Transitions first for a thorough consultation and financial modeling. While initial offers may seem tempting, moving forward without completing due diligence on their initial offer may leave money on the table and fail to achieve your goals. They have an experienced team of professionals working hard on their behalf, and so should you!
Merger and Acquisitions
Merging or acquiring other dental practices may be an exciting and rewarding endeavor. This process can increase profits in a practice by 25-60%, even without you touching the handpiece in some situations. The concept promotes the investment by a dentist in the area you have the most knowledge – dentistry! Additionally, you are preventing a potentially more aggressive dentist from competing in your geographic space. The business and legal process comes with a fair share of issues. Make sure you work with an experienced dental consultant who understands the benefits of a merger, but who can also address challenges that may arise. If done correctly, mergers are a great way to achieve everyone’s goals.
Many older dentists looking to retire or move into a new phase of their career will bring on a younger dentist as an associate. Associateships can benefit both parties by providing a pathway to buying a first dental practice and as a transition strategy toward retirement. Our history of successful practice transitions allows us to recommend the most comprehensive and fair business arrangements between two or more parties. Using creativity and ingenuity, we can create truly unique and beneficial programs for all involved. Like all our services, Legacy Practice Transitions works with all parties to identify potential obstacles and clearly align expectations before contracts are signed.
Partnerships are agreements between two or more dentists. When done correctly, they are mutually beneficial for all owners from a professional, financial, and managerial standpoint. If not done properly, conflicts over ownership, control of the workspace, and business operations may occur. This is an area that particularly requires experienced and knowledgeable advisors to facilitate a potentially complex transaction. For help finding the right partner for your dental practice or to discuss transitioning out of a partnership, contact Legacy Practice Transitions.
Selling Specialty Dental Practices
For specialty dentists preparing to retire or transition to the next phase of their career, finding the ideal buyer to take over your practice is essential. There is a twofold challenge in the specialty space, assuring the buyer is qualified to purchase your practice and equipped with the procedural experience your patients deserve. As well as matching you with a well-suited buying doctor, Legacy Practice Transitions helps you get the most value for your practice.
We gauge many factors including goodwill with patients and your relationship with referring dentists. Some of the dental specialties we can help broker the sale of are:
Contact Legacy Practice Transitions Today For Help Selling Your Dental Practice
As one of the largest dental brokers in the country, you can count on Legacy Practice Transitions for fair and equitable transitions. A well thought out process can allow you the economic and emotional security you deserve. Talk to us today and begin the conversation about transitioning your dental practice. A practice transition is not only about selling a practice – it’s more about Quality of Life issues!