How to smoothly transition from dental practice owner to seller
After years of developing and leading a successful dental operation, the time has come to embark on a new journey.
Reinventing and reimagining your career goals is an exciting undertaking. And as an experienced dental professional who’s succeeded at a high level, you anticipate that your next act will be just as good, if not better. Before moving on, however, you’ll have to manage an important turning point and find the right buyer for your practice.
If you’re wondering how to go about the selling process as smoothly as possible, below are some of the steps that you should be clear eyed about. From legal and financial considerations, a transaction of this size can be complex. With a little organization and planning, you can navigate this process with precision and maximize your return on investment.
Lay legal and financial groundwork
The first important step is to follow legal and financial protocols. Since owning a dental office represents a large asset, it’s important to have a firm grasp of all pertinent legal and financial rules. Professional legal and accounting support creates the guardrails that facilitate a smooth and successful transaction.
Your partners will certify that contract and financial particulars are correct and fair. An attorney with deep experience in mergers and acquisitions will help you as you negotiate a fair market price for your business.
Sometimes, dental professionals have an interest in resuming practice on retainer after the sell. If this is your goal, your team will assist you in maneuvering through the contract details for employment.
Equipment will also be a big piece of the puzzle. Will equipment be part of the sale? Is it leased? Are you including other assets? No detail is too small and each one factors in your discussions and negotiation.
Understanding the valuation is another key component to successfully complete a complex sale. With the help of your accounting team, you will gain clarity on how much your business is worth and how much profit you will enjoy.
These financial details will also support your leverage. As a successful business, you will be able to provide financial support that shows your accomplishments and strong profit margins over a long period of time.
Finally, the financial team can also tell you about the tax implications of the sale, which you must account for to see the complete picture.
Show complete transparency
Successful dental practices prioritize honesty and transparency. During this transition, it’s vital to hold onto those values more strongly than before. People you’ve developed unbreakable working relationships with count on you to be forthcoming when the stakes are high.
Keep your staff in the loop from the beginning and inform them of your intentions and how you plan to support their transition.
Think about what would happen if your team was unaware of a pending sale. Having the rug tugged from underneath them without notice can be devastating on multiple levels. Full transparency helps them prepare and stay on your side until the end.
Your transparency can also lead them to build a bridge with the incoming owner. At the very least, your willingness to be open and clear eases the transition for everyone involved.
As you get closer to the sale, it’ll be important to inform patients too. Be sure to thank them for their support over the years and also tell them about timing and what to expect once the transition is complete. Failure to do so can cause headaches for the incoming ownership group and staff. But timing must be precise. A premature announcement can cause a range of complications, especially if there’s a big delay in the sale or if the sale is called off entirely.
Get affairs in order
Soon after you attract viable buyers, your attention will turn to tidying up. Showcasing your dental office increases its desirability. In addition, all the financial details and reporting should be well organized and in tip-top shape.
From the moment any potential buyer walks into your office, they should be impressed with how tidy, organized and clean everything is. The same must be true about internal processes, like scheduling of patients and staff. Clean and streamlined systems raises the buyer’s level of confidence that it’s the right deal to make.
Now is also the time to balance out outstanding insurance claims and billing. The last thing you want is to have a financial sheet with extensive and aging outstanding balances. Getting up to date avoids the stress of trying to rush through it in the latter stages of the sale.
If necessary, assign your team to work on aging reports. As the team clears out the queue, the numbers will look better by the day. Take time to evaluate collection percentages and production. These analytics can provide support to any potential buyer that your business is high performing.
From practice management consulting, continuing education support and practice acquisitions and marketing services, our team at Adams Dental Consulting is here to help you realize your vision and help develop your pathways to success.
Whether you plan to sell your business or expand it, Adams Dental Consulting will gain a deep understanding of how to best support your entire team’s goals through a customized and comprehensive strategy plan that moves your business forward.