Avoiding the Pitfalls of Dental Practice Transitions – Part Four

Selling your dental practice is a complex business event with many emotional and economic issues coming into play. The truth is that hopefully you are only going to do this once – so you better do it right in order to get maximum value. Probably the hardest part is to make the actual decision to sell. But once you are ready, it is essential to conceptualize a detailed plan of action, and that plan may extend for 18 to 24 months.

Don’t start telling patients that you are thinking about retiring. You don’t want to give any patient a reason to leave prematurely. If asked, your answer should be “I love what I do and have no plans at the moment to stop.”

Don’t discuss your retirement plans with staff. There is no way to control what comes out of their mouths, and they could unwittingly be undermining you.

Don’t slow down. Keep to the same weekly work schedule. You should be able to suck it up and work hard knowing that the end is in sight. The value of a practice is time weighted using collections from the past three years. The performance data from the current year is weighted three times more than what happened two years ago. So if you slow down and work less, you are going to be severely penalized. Value is based on the present and not on a glorious history.

Give the office a facelift. Paint, paper, carpet, ceiling tiles – maybe some new reception room furniture. This is relatively inexpensive. You certainly don’t want your practice to look tired and dated when you go to sell.

A big factor in valuation is the size of the patient base. How many patients do you have will be one of the first questions asked. My definition of an active patient is someone who has a scheduled appointment. So make a concerted effort to re-activate every patient that has been seen in the past 24 months and get them an appointment for continuing care. In every practice that I have ever coached, there is a large practice “within your practice” with whom you have lost contact. It is a lot of work –  but will be time well spent.

Don’t go crazy with updating software and technology in anticipation of a sale. These are expensive purchases, and since you will need to sell your practice debt free, you will not have enough time of recoup the value. And there is no guarantee that the buyer would be happy with your choices. Instead of a positive, it could turn out to be a negative.

If you adhere to these suggestions, I am comfortable – especially in this current seller favored environment – you will get maximum value for your practice.