Things to do and consider!
At some point, you may feel like it’s time to get out of the game, so to speak. Whether because of your age, your health, family considerations or whatever your reasons are, there are some steps you should take prior to undertaking the sale of your practice.
First and foremost though is for you to make sure that this is indeed the right decision for you. A bad case of overwork or burnout could leave you feeling like quitting but in reality, you might be able to fix those issues by expanding and adding associates, rather than closing. Once your ‘issue’ begins to resolve, you might find yourself getting energized and re-discovering why you went into dentistry in the first place. So be sure that selling your dental practice is in fact the right thing for you.
Assuming that you have made the decision once and for all, there are some other things to consider:
Get a valuation done
Most of us assume that whatever it is we have to sell is worth far more than it actually is. We don’t take into account things like the overall economic climate, competition, or the current status of equipment. All we think about is the work that went into building the practice. It’s a very personal reaction to what is actually a numbers decision. So it’s best to get an independent valuation of the practice to see what it’s actually worth.
Like a house being staged before it is put on the market, there are things you should consider fixing / updating or reviewing before getting the valuation done:
- Make sure that the care and customer service your office is providing to your current patients is the best it can be—the idea being that you will get most value from a business that is operating at its peak, rather than in a downward slump. A lot of what you are selling is ‘goodwill’: a roster of patients that are happy with you and the service you provide. If that falls off, so will the practice’s value.
- Fix and update your office—everything should get a spruce: front office, reception, treatment rooms, equipment, etc. If it looks rundown, you won’t get top dollar. It’s not necessary to buy a lot of new equipment, but make sure you are as up to date as you can be.
- Do staff evaluations—a buyer might very well be interested in keeping the staff but will want an up to date evaluation on each member of your team. Make sure that their HR information including contracts and termination notice options are clear, in the event that a new owner might not want to keep them on.
- Make sure your A/R is up to date—a lot of outstanding or past due accounts won’t look good on paper. By the same token, don’t get rid of your financing or other insurance programs in advance of the sale, as you could prematurely lose some patients.
- Check into your lease—if you don’t own your space, check into the transferability of the lease.
- Partners and associates—if your practice has either, review the contracts. You need to be clear as to whether or not partners / associates have been given a first right of refusal option for buying you out, or if you are free to move forward. Even if the latter is true, it’s important to be sure that you aren’t contravening any terms of the contract by selling, which could end up costing you a lot in the long run.
- Keep quiet—spreading the word of your intent to sell could send both staff and patients elsewhere before you’ve even begun the process of finding a buyer, which won’t look good on the bottom line.
Consider hiring Dental Management Advisors to assist in the transition
All of the human resources issues can easily be handled by someone else, including recruitment and screening of potential buyers who can come in and grow the practice. This is the most practical way to move forward, to ensure that all your i’s are dotted and t’s are crossed.