If you ask five dentists when the best time to sell your dental practice is, you’ll likely receive five different answers. Common responses include intuitive retirement, never selling due to a deep love for dentistry, financial security, selling when there’s no immediate need, or when the demands of being a dentist become overwhelming. While these perspectives hold some truth, the decision to sell your practice requires a comprehensive evaluation and a carefully planned exit strategy. Selling a dental practice should not be treated as a hasty sprint but rather the culmination of a successful career.
The Best Time to Sell: A Thriving Practice
In an ideal scenario, the best time to sell your dental practice is when it is thriving and performing exceptionally well. Selling at the peak of your practice’s success allows you to obtain the highest possible price for your efforts. However, it’s important to note that a busy office and a high volume of patients do not always equate to the most profitable dental practice. Key performance indicators (KPIs) serve as important benchmarks for a successful practice. These include clinical production on a daily, weekly, and monthly basis, average production per patient, accounts receivable, collections, new patients, patient retention, patient drop-off rate, overhead, and profitability. Prospective buyers will thoroughly review these KPIs for the previous two or three years. Therefore, a short-term improvement in one or two areas may not compensate for an overall decline in economic indicators.
Maximizing the Value of Your Dental Practice
To maximize the value of your dental practice before selling, it is crucial to have a well-defined transition plan in place and adhere to it. Seek the expertise of your accountant and an unbiased, experienced professional to assess the strengths and weaknesses of your practice. Address areas for improvement and create an action plan to enhance all key performance indicators. Focus on reviewing expenses and reducing overhead, upgrading office equipment and technology, increasing marketing efforts to attract new patients, considering an office makeover if necessary, and conducting an honest staff appraisal to improve staff performance.
Be Patient: Selling Takes Time
Selling a dental practice is not an overnight process; it takes time and patience. Dentists often operate under significant stress but succumbing to desperation and rushing the sale can deter potential buyers. If you find yourself longing for retirement and feeling overwhelmed, remember that buyers can sense desperation. Seek professional help to get your office in top shape, especially if you’re running low on energy. Finishing your career strong and seeking support when needed are wise decisions. Retirement or relocation can be daunting, but with the right assistance, you can navigate the process successfully.
In conclusion, determining the best time to sell your dental practice requires careful evaluation. A thriving practice, supported by strong performance indicators, enhances the likelihood of a successful sale. By creating a comprehensive transition plan, focusing on areas of improvement, and seeking professional guidance, you can maximize the value of your practice. Remember to be patient throughout the process and seek support when needed. Selling your dental practice should be the culmination of a long and fruitful career.