10. The baby-boomer bubble of those who graduated in the 1970s and 1980s. They have been hanging on, and they will eventually retire and increase the supply of dental practices on the market. Will their practice be an asset worth selling if they leave immediately without 2-5 years transitioning?
9. If you are 8 to 10 years away from retiring, it might be a good idea to spend your money on new equipment and new leasehold improvements. Use it, enjoy it, and depreciate it! Your practice will still look good for the 8 to 10 years you have left.
8. If you have three to eight years left before you retire, it still might be a good investment to upgrade the equipment in the office if it extends your career and enjoyment of your surroundings. This is also the perfect time to consider selling to a corporate entity while you and your practice are at their peak. You will maximise your sale price and still be able to run your business as your own in some cases
7. If you have three or fewer years, you will not get the return on your investment from upgrading your equipment or leaseholds. The purchase price is based mostly on your collections, not your equipment. However, common-sense cosmetic upgrades and cleanliness are worth the small effort and expense.
6. No matter how old you are, you should speak with your accountant and get a financial advisor to help plan your exit strategy. It really is never too early to put some thought into this, even if you think you’re still young and invincible. Also, choose a specialist dental practice broker for a fair evaluation on your practice worth.
5. The “trickier” your financials are, the more difficult it may be to get a good price for your practice. Every accountant has a different level of aggressiveness on tax avoidance. The cleaner the tax return, the easier it is for the buyer to get financing for a practice and a clear understanding of your practice’ worth.
4. If you have more than one practice, try to keep separate tax returns. While there may be some cost savings in filing one return, the trouble and cost to split the financials later will probably cost more than the extra return. Plan for the usual occurrence that you will probably sell one practice at a time.
3. The best time to sell in the current climate is now, if you are looking at retiring in 4-10 years time. As reasoned above, there are attractive multiples on offer from the bigger companies who are dramatically evolving the dental industry landscape
2. Do not try to sell your most cherished asset on your own. You would never sell or buy a house without a real estate agent, and dental practice transitions are much more complicated than selling a house. A good broker is the glue that binds together the tax, legal, and dental transitional issues. Just as experience in dentistry is critical to becoming a great practitioner, experience in transitions helps buyers and sellers avoid the many possible pitfalls.
1. Your most current tax return is EVERYTHING! The last return is the main instrument to determine the price. There is always a narrative to explain some variations, but lenders really look at the most current numbers. Conclusion – we are in unprecedented times for selling dental practices if the time is right for you. Don’t miss out, secure the maximum price for your most treasured asset.