If you ask five dentists when the best time time to sell your dental practice, you’ll likely get five different answers.
Common answers include:
- “When you’re ready, you’ll intuitively know when it’s time to retire.”
- “Never. I love being a dentist. It’s a family operation. They’ll have to pry the drill out of my hand.”
- “When you are financially set for the rest of your life.”
- “The best time to sell is when you don’t need to sell.”
- “When you’re no longer able to keep up with the demands of being a dentist.”
The fact is, most dentists looking to sell their practice are doing so because they’ve reached the age of retirement or they have decided, for one reason or another, to relocate. Choosing the best time to sell involves a comprehensive review of the state of your dental practice and a thoughtful, carefully planned exit strategy. Selling a dental practice is not a short-term sprint to the finish line but, with any luck, the culmination of a long, successful career.
The Best Time to Sell Is When Your Practice Is Thriving
It seems obvious that in a perfect world, the best time to sell is when your practice is robust and thriving. You’ll receive the highest price for your efforts when your practice is firing on all cylinders. A busy office and a high volume of patients looks impressive but does not always translate into the most profitable dental practice. Important key performance indicators of a successful practice include:
- Production on a daily, weekly and monthly basis
- Average production per patient
- Accounts receivable
- New patients, patient drop off rate
As you prepare to put your practice up for sale, it’s important to note that these key performance indicators will be reviewed for the previous three years or more. In other words, a three-month uptick in an important KPI will not overcome an overall downturn in economic indicators.
Five Things You Need to Do to Maximize the Value of Your Dental Practice
Having a transition plan in place and sticking to it is the most important thing you can do to insure the successful sale of your dental practice. Review the merits and weaknesses of your practice with your accountant and an unbiased, experienced professional. Accept the good news with the bad, don’t gloss over the areas that need improvement and create an action plan to increase all the key performance indicators of your practice. Areas to focus on, include:
- Review all expenses and pay strict attention to overhead
- Bring office equipment and technology up to the highest standard possible
- New patients – increase your marketing efforts. Intensify your PR and social media efforts
- Consider an office makeover, especially if it’s been years since your last remodel
- Do an honest staff appraisal and give your office an overall grade for patient relations. If this is an area that needs improvement, take the necessary steps to improve staff morale and patient communication.
It Takes Time to Sell a Dental Practice So Don’t Be in a Hurry
Dentists operate under a lot of tension. Most find ways to deal with the stress of running a busy practice. However, sometimes the pressure can be too much. If you’ve waited a bit too long to implement your exit strategy and you find yourself longing to throw in the towel and retire, remember – buyers can sense desperation. Don’t be shy about hiring experts who can help you get your office into top shape. Especially if you feel you’re running low on energy. Finish strong. If you need assistance, ask for it. Facing retirement or relocation can be overwhelming. Getting the support you need is the wisest thing you can do.
Henry Schein Professional Practice Transitions, Inc. is a national leader in dental practice transitions. A subsidiary of Henry Schein, Inc. they provide expert guidance for selling and buying dental practices, dental practice fees and management, assessing partnership and associateship opportunities, and performing dental practice appraisals and valuations.