Top 10 issues for dentists looking to sell their practices!

10: The baby-boomer generation has spent its time in the dental market. They would have graduated back during the 70s and 80s and are going to be retiring in droves within the coming years. This means that there will be a ton of dental practices on the market.

9: A good way of increasing value is by upgrading your equipment, but if you’re only a few years away from retirement, then doing this means you’re not going to get an adequate enough return on your initial investment. Your ultimate purchase price isn’t going to be based on your equipment but rather your overall collections. If you’re that close, spend some time on making small cosmetic upgrades and just improving the overall cleanliness instead.

8: If you’re between three and eight years from retirement, go ahead and invest in some of your equipment if it will help you enjoy or extend your career. At the very least, make sure to upgrade your X-rays to digital, as most of your buyers from the newer generation won’t have any experience on an old processor.

7: If you’re around eight to ten years from retiring, feel free to spend some good money on upgrading equipment and leaseholds. It’ll get you some good use and depreciate but will still be worth good money once it comes time to actually retire.

6: Even if you aren’t on the verge of retiring, make sure to speak with an accountant to develop a good exit strategy. There’s never a better time to do that than right now.

5: Tax avoidance is great, and every accountant knows their own tricks, but the more complex the financial side of your business is, the more difficult it is going to be for prospective buyers to get financing to purchase it.

4: Try to keep separate tax returns for separate practices. It may be better in the short term to have everything done up at once, but the reality is that you’re most likely going to be selling each practice on its own, so think for the long-term.

3: Don’t hang it up until you’re really ready to be done. You’re only going to be getting about 150% of your average income, so realize that working an extra year at a relaxed pace is going to bring in more money than selling before you’re really ready. Keep in mind that the baby-boomer bubble is going to bring prices down around 10% in the coming few years.

2: Don’t go it alone. You wouldn’t expect a broker to practice dentistry, so don’t be the dentist that practices brokerage. Get a good broker to help combine the legal, tax, and dental transitions that are going to be needed. Your practice is your legacy, so make sure it’s in the hands of a professional.

1: For price determination, your most recent tax return is the most important factor. Make your last year strong and get those deposits in to increase the sale price as much as possible.