It’s hard to believe that summer will be over soon. So, what will 2023 have in store for you? For some, it may be creating transition plans for your retirement next year. For others, it may be planning for your associate to become your partner. More practice owners are considering multiple office ownership, so will you be one of those entrepreneurial dentists to take that next step? Practice transition planning has different meanings for each practitioner based on your career stage.
For those dentists over the age of 55, a recent report from the American Dental Association reported that over 6,500 dentists retired in 2021, which was a significant increase of retirees in this age group compared to prior years. Retirements in this age group are also expected to increase over the next few years. So, if several of your colleagues in your area are in your age bracket, gain a competitive edge by placing your practice on the market sooner rather than later. Have your practice valued now to see what you can anticipate receiving for a practice sale.
If you are planning on offering your associate a partnership opportunity next year now is a good time to set the wheels in motion. There are many issues and steps which need to be considered in making a partnership successful. One of the most important steps is determining the tax structure of the buy-in. There are several ways this can be accomplished, so scheduling a meeting with your CPA now to discuss plans and reviewing tax strategies in your buy-in is a must. Next, do you have a buy-in price? Was a practice valuation previously prepared and must it be updated? If your associate has been employed for several years do not be surprised if your future partner demands consideration in a reduced buy-in price especially if they have made a substantial contribution to your practice’s growth.
Additional Practice Purchase(s)
If your plans are to purchase an additional practice or more in 2023, have you established a strategic plan to guide your intended acquisition(s)? Do you still have outstanding debt on your initial practice acquisition loan? If so, do you expect your current lender to provide additional funding? It is important to determine the amount of additional funding they will provide you for any future acquisitions(s). Apart from obtaining additional funding whether it comes from additional bank loans or from private investors, you’ll need to consider assembling a strong management team to develop the proper infrastructure to manage these multiple offices. Practice owners who have done this are eventually rewarded when it is time to sell, with a higher sale price for their well-run and profitable network of practices.
The key takeaway is that whatever stage you are in your career, with your transition planning, it’s time to get your plans in order so you can get a jumpstart on transforming them into reality. That is why you need the help from a Henry Schein Dental Practice Transitions Consultant to help you navigate the tremendous amount of important documentation, information, and considerations that lead to a successful practice transition—our dental consultants are ready to help.