You’ve spent decades building your practice into a successful business. You’ve invested blood, sweat, and tears and more significant financial investment into this business. If you’re looking toward retirement, you think it’s time for a return on your investment and sell your practice. Isn’t it time to reap the rewards of your efforts?
Not so fast.
Don’t be in a hurry to sell your practice. If you don’t utilize wisdom and caution, selling may not provide the return on investment you’d hoped for. Utilizing a practice advisor will help you identify potential sellers, provide an accurate appraisal of what your practice is worth and guide you through the entire process so that you can concentrate on the transition process.
Dentists think they may be ready to sell their practices, but if they don’t take advantage of professional guidance, they can easily overlook details that make a huge difference in their selling price. Have you covered all your bases?
Following is a helpful quiz to help determine if you are truly ready to sell your practice.
Simply examine the following and select what you believe is the best option. An explanation follows that will give the correct answer.
A) I HAVE CREATED A FINANCIAL PLAN IN ADDITION TO MY PRACTICE INCOME TO SUPPLEMENT MY RETIREMENT.
B) MOST OF MY ASSETS ARE LINKED TO MY DENTAL PRACTICE.
Many dentists think that they can easily sell their practice and retire from the profits. However, historically, practice owners discretionary income from their practice is roughly 38 percent. This means dentists should not center their entire retirement on their practices. If you answered A, you’re moving in the right direction.
A) MANY OF MY FRIENDS AND FAMILY MEMBERS ARE EMPLOYED BY MY PRACTICE.
B) I HAVE A POLICY OF NEVER HIRING FAMILY OR FRIENDS.
While there’s certainly nothing wrong with hiring friends or family, realize that it could be a deterrent to potential buyers, who will worry that your employees will remain loyal to you and have difficulty during the transition. Speaking with a practice advisor can help you navigate these human resource issues.
A) MY OFFICE IS IN COMPLIANCE WITH ALL FEDERAL REGULATIONS AND OSHA REQUIREMENTS.
B) THERE ARE A FEW THINGS THAT NEED TO BE TWEAKED HERE AND THERE TO BRING THE BUILDING UP TO STANDARDS.
It should be obvious that any failure to have all compliance documents in order would be a red flag for a potential buyer. Likewise, any building issues that could put you in danger of an OSHA violation will scare potential buyers. State and federal governments can levy extensive fines for noncompliance, so it’s best to be sure things are in order before selling. It’s also vital that all compliance documents are easy to locate.
A) I HAVE A STRONG ONLINE PRESENCE AND AN UP-TO-DATE WEBPAGE.
B) THE PERSON BUYING MY PRACTICE WILL LIKELY WANT TO USE HIS OWN BRANDING, SO I’M NOT PUTTING AS MUCH EFFORT INTO MY WEBSITE.
Having a strong online presence demonstrates a strong marketing initiative and can make your practice much more appealing for potential buyers.
A) I HAVE AN EMPLOYEE MANUAL FOR ALL MY EMPLOYEES TO READ.
B) I DO NOT HAVE AN ACTUAL MANUAL, BUT MY EMPLOYEES KNOW WHAT IS EXPECTED OF THEM.
It is important to have an employee manual, even if the dentist buying your practice wants to implement different policies. The issue is professionalism, and having an actual manual projects a polished image that is more enticing to the potential buyer.
Not only can a practice advisor help you with appraisals and selling your practice, but he can also utilize solid business methodologies to help you during the transition. Click here for more information on how a practice advisor can help you.