Considering Selling Your Dental Practice? Establishing an Effective Exit Plan is Crucial!
The decision of when and how to exit your dental practice is a significant one that nearly every practice owner will experience during their career. Whether you’re contemplating retirement, seeking a more challenging opportunity, or desiring a break from the dental realm to pursue a different path, careful planning of your exit strategy is imperative for a seamless transition.
Many dentists are grappling with the growing demands for high-quality, cost-effective care, coupled with the administrative and financial challenges of practice ownership. Consequently, there is a notable rise in practice owners exploring their options. The enduring impact of the cost of living and dental recruitment crisis further intensify the strain on practices, making the prospect of selling and reducing responsibilities even more attractive.
The decision to sell your dental practice is often an emotionally challenging one. Building a successful practice entails years of hard work and dedication, making it difficult to part ways with something into which you’ve invested considerable time and effort. Nevertheless, if you’ve determined that selling is the right move for you, there are key considerations when formulating an exit strategy.
Valuing Your Practice Accurately
Having an accurate valuation is essential for a successful sale. Factors such as location, patient base, profitability, equipment and technology, growth projections, and local competition contribute to the complexity of valuations. Henry Schein MediEstates offers a comprehensive valuation service, considering various factors, financial forecasts, and profitability optimisation advice.
Choosing the Optimal Deal Structure
The structure of the sale can vary based on whether you prefer a lump sum immediately or are open to extended payments with appropriate retentions and guarantees in a post-sale agreement. Options include continued involvement post-sale, serving as a mentor or through contractual arrangements as an associate. Alternatively, you might favour a straightforward structure for a clean break from the practice.
Identifying the Right Buyer
The type of buyer your business attracts depends on its size and annual turnover. Smaller practices may attract individual buyers seeking an affordable entry, while larger practices may draw the interest of corporate entities with plans for expansion. Sellers must be aware of the implications associated with each buyer type, sale structure, and post-sale agreement.
Plan Ahead for a Smooth Transition
Depending on the buyer type, ownership transfer can take up to 12 months due to legal complexities. Commencing exit strategy planning before you’re ready to sell can help eliminate unwanted delays.
In conclusion, selling your dental practice is a major decision, but with a well-thought-out strategy, it can pave the way for future success. By developing an exit plan, finding the right buyer, accurately valuing your practice, and understanding legal obligations, you can ensure a smooth transition. The team at Henry Schein MediEstates is ready to discuss your needs and provide expertise to help you decide on the best options for your future.
Why not get in touch today to get a valuation for your dental practice? Contact our team today.
