Your anticipated practice sale is one of the largest transactions of your practice life. Along with your home, these are big indicators for you. This is your baby and you want this sale to go well.
When the stock market and real estate were doing well in 2005, many 50 year-old dentists felt they would quit soon and play the stock market. When 2008 recession came, those dentists shifted their retirement plans and acknowledged, instead, the steady business of their dental practice. They stayed the course and didn’t sell.
Ten years later, they are now dipping their toes again, seeing if the time is right to sell. They are seeking a memorable sale. What are the factors creating an awesome sale? What would make it the best ever?
Price is the obvious answer. In a sale, you need to show three years of tax returns as in many areas, sale price can be as much as 18 months to two years of net. How long has this practice been netting $750K?
Question for the Doctor? If you are not getting $750K and practices in your area are selling for 18 months to two years net, what monies do you need to completely retire? Three tax returns of $750K net would mean a sale of $1.5M. If your net is more in the $450K range, your practice sale would be $900K. This is a difference of $600K for the price of your practice. Is that OK?
Perhaps you are not ready financially to retire? Are you needing the $1.5M to retire comfortably? Blatchford Solutions Coaching can help you in your business systems, schedules and sales to have a net of $750K or more in the 36 month time frame.
Emotions play a huge factor in making a retirement decision. Perhaps, you are not emotionally ready to give up a steady income and still feel needed and wanted in the community. Is your 70 year old body the new 50? One of the beauties of dentistry is you are in control. You can choose the right time for you.
For some dentists, it isn’t so much the money upon the sale, but more the continued learning, camaraderie of others and appreciation from your dental families. There is no mandatory retirement age for dentists. Blatchford has long advocated for, “Retire As You Go,” meaning choosing your favorite treatments, working your favorite days and with your favorite team members for as long as you desire.
Warning: What doesn’t work is for a dentist who wants to retire but must continue doing dentistry. A young associate is hired who believes the selling dentist will sell him this practice eventually. No appraisal is done before the associate starts and no end date is ever
established for the seller to leave.
We see this heartbreak often enough, it gives the word associate, a poor reputation. Questions the young Doctor should have asked the accommodating older Doctor are: “how many patients are you currently turning away?” If the obvious answer is, “none,” then ask, “How much of your net income are you willing to give up so I can practice here with you?”
At Blatchford Solutions, we believe every private practice sale should be a win-win for seller and buyer. With open communication and a commitment to excellence, we believe the seller can maximize the value of the practice and the buyer can continue to accelerate the return for the valuable asset.
To read real stories of transition disasters and how you can avoid them, purchase our Blatchford book, No Nonsense Transitions on www.blatchfordtransitions.com