The first steps begin by recognizing and acknowledging a time frame of transitioning. This may be driven by desire or the need to retire. Often, dentists fear the transition process and view it as the end of their best years. Transitioning out of your dental practice is not the end, it’s the beginning. The ultimate goal is to receive the maximum value for your dental practice sale, so give yourself as much time as possible to properly create a plan.
Dentists transition out of their practice for many reasons. The primary motives are because they either want to retire or they are faced with a heath issue that prevents them from continuing to practice at a desirable production level. Regardless of your reason, once you’ve made the decision, you should begin the planning process at least three to five years before your target date. As you create your exit strategy, it’s important to consult with a team of industry experts. The first call should be to a trusted and experienced dental practice broker who can assist throughout the process of your dental practice sale. You will also need to discuss your plans with your team of advisors which usually includes your dental CPA, attorney, financial advisor, and your family.
The ideal dental transition is as seamless as possible where the dentist receives the maximum value for his or her dental practice sale. The chances of achieving both are enhanced when the process is supported with a solid plan and a reasonable time table. Planning three to five years in advance provides flexibility. Establishing a dental practice sales plan early doesn’t mean you are committed to one option of transitioning. By allowing yourself enough time, you have the flexibility to revise your plan as life circumstances and the market changes.
Now that we’ve covered the importance of establishing a plan three to five years (if possible) prior to your targeted retirement date, the next step in the preparation process is to set a deadline. Give yourself nine months to a year to complete your dental transition plan. Keep in mind that you should be also improving and enhancing the practice during this time frame. It is recommended to begin the transition process while the dental practice is productive, healthy, and most viable. Maintaining production and enhancing the dental practice will improve your chances for a successful dental practice sale. Don’t wait until after the peak value of your practice has declined to begin the transition process.