How to Prepare for a Successful Dental Practice Transition
Preparing in advance for your Dental Practice Transition is one of the best things you can do for your future. Did you know that dental professionals are ranked in five positions on the list of the Top 20 Highest Paying Occupations of 2016, according to the U.S. Bureau of Labor Statistics? The list is based on median annual salaries, meaning that 50% of dentists earn less and 50% earn more.
- #2: Oral & Maxillofacial Surgeons – over $208,000
- #4: Orthodontists – over $208,000
- #11: Dentists, all other specialists — $173,000
- #14: General Dentists — $153,900
- #20: Prosthodontists — $126,050
The Truth Behind Dentists’ Salaries
Making the top 20 list is quite an accomplishment, but the reality of making these top-level salaries is not as impressive as you might think. That’s why thorough planning for a successful dental practice transition is more important than ever.
While the “median annual salary” of a general dentist was reported to be about $154,000, that salary simply isn’t and won’t be enough for most purchasers. Being in higher income occupations brings with it higher educational expenses and massive student loan debt.
The average dental school debt for the graduating class of 2016 was $261,149, not including interest, according to the American Dental Education Association, with 30% of graduates owing more than $300,000.
Add to that reality the fact that dentists face numerous requests to negotiate fees for patients having difficult financial times. Meanwhile dentists are facing their own financial realities and are concerned with how they can best position themselves for a successful dental practice transition when the time comes.
What Can You Do to Make Your Dental Practice Transition Successful?
You need to start now, thoughtfully planning and preparing for your practice transition, whether your transition date is two years from now or a decade away. The transition specialists at Henry Schein PPT offer these general guidelines for getting ready:
0-2 years from Dental Practice Transition
Bring in a transition expert now. Investing in experienced, trustworthy professionals will protect you from potential problems and untold financial hardships of a poorly planned transition.
When your anticipated transition is imminent—2 years or less—a seasoned transition consultant still has time to conduct a detailed examination of your practice, revealing areas for possible improvement. Henry Schein PPT consultants caution that getting “cookie-cutter advice” will not be enough to protect and prepare you for this major life-changing event.
2-5 Years from Dental Practice Transition
Review your fees and raise them wherever possible. You’ll want to be within the 80th percentile of the fees in your market. Look at staff salaries; are they reasonable and do they reflect the individual’s qualifications. Will your team members be supportive of a transition and consider staying on with the new dentist? An experienced staff can be an irresistible selling point for potential buyers.
Look for untapped opportunities to bolster your patient base or procedures, but avoid adding specialty procedures, especially those that need special training or qualifications that may not be easily transitioned.
Avoid major equipment purchases or extensive remodeling projects. Instead look at minor aesthetic upgrades like paint and flooring. If you are considering digitizing your patient records, realistically assess the cost and learning curve for your practice. Conduct a “Coffee Stain Tour” with your staff or bring in a transition specialist to do it. Identify noticeable signs of wear and tear throughout your office(s) that can be fixed inexpensively to make a better first impression with potential buyers.
5-10 Years from Dental Practice Transition
Consider the recommendations in the 2-5 Year Plan. Additionally, you need to plan to reduce specialty procedures and become as mainstream within your practice area as you can by Year 5. Are your practice systems and processes running smoothly? If not, bring in a dental practice management specialist to help. Digitizing and going paperless is a “must-do.” You have time to do it, and it will become an important asset in your dental practice transition.
10+ Years from Dental Practice Transition
Consider everything from the 2-5 and 5-10-year plans. The significant difference is that you now have time for larger expenditures to pay off. Look at replacing major equipment or updating the office appearance. Carefully consider technologies such as Cerec or CAD/CAM. Although the investment may not have the payoff in transition, these new technologies can be a profitable, competitive asset for you while you are practicing.
Positioning for a Profitable Dental Practice Transition
While vast numbers of Baby Boomer dentists are reaching transition age, new dental schools are rising to the demand of preparing a new generation of dentists to fill the growing gap between retirees and graduates. That’s good news. However, some critical facts remain the same:
Future dental practice buyers will need to earn more from their practice than those of the past. The best prepared practices will transition faster and for a higher value. Increasing your practice’s net income is important, but equally important is the way your practice operates and looks.
Contact a Professional at Henry Schein Professional Practice Transitions
Have a question about transitioning your practice? Contact us online and have a Henry Schein PPT expert help take the stress and confusion out of dental practice transitions.
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 dental practice transitions, management, selling and buying dental practices, assessing partnership and associateship opportunities, and performing dental practice appraisals and valuations.