When Dr. Jones decided to sell his dental practice, he experienced mixed emotions. He’d built relationships with his team and community for nearly 30 years. It marked the end of an era and the close of a chapter in his life dedicated to caring for patients and growing a successful practice. On the other hand, it represented an opportunity to pursue new passions and reconnect with family and friends.
A few years before the sale, he realized the complexity of the process and identified five strategies that would ensure a successful transition for himself, his staff, and his patients. Dr. Jones ultimately attracted a buyer who recognized the quality of his operation and brand. His attention to detail ended in a dental practice sale that added tens of thousands of dollars to his retirement funds.
From planning early to partnering with a professional transition specialist, these five strategies help dentists navigate the complexities of the sale process and set the stage for a successful transition to the next chapter of their lives. Consider the same steps to move towards your smooth exit with new opportunities.
Strategy #1: Start Planning Early
Dr. Jones started planning a few years before the final sale of his practice, and that commitment gave him time to fine-tune his overall approach. This long-term view proved equally important for his practice and personal life. He had time to consider several options, including a DSO deal that would’ve required him to stay with the practice for at least three more years.
Dentists who begin planning early will be better positioned to attract the right buyer and achieve a successful sale that adds to their retirement funds. They’ll also enjoy the process more and experience less stress as they work through the necessary steps. As practice transition specialists, we encourage clients to start the conversation early and continue to reach out with any questions. It’s never too soon to start exploring what’s possible.
Strategy 2: Get Your Financials In Order
Dentists need to clearly understand the current state of the practice and the underlying financial data. This process includes a thorough analysis of profitability, overhead targets, and internal metrics like hygiene production, production per visit, active patients count, and more. By doing so, the dentist can identify any areas that need improvement to increase the practice value.
Plus, well-organized financial records are crucial to attract potential buyers and demonstrate the value of the business. Buyers will want to see detailed financial statements, tax returns, and other financial records. Today’s corporate dental groups and independent buyers evaluate profitability and assess the potential return on investment.
An early start to the planning process allows a dentist to evaluate their personal financial situation, too. Dentists enjoy relatively steady cash flow over their careers, and they must consider many factors when they retire and rely on passive income. A comprehensive financial planner considers many moving parts and can coordinate with trusted CPAs, attorneys, and practice transition specialists. The right plan creates income, but it also delivers peace of mind.
Dr. Jones had made consistent investments over the years but worked with his advisors to design a tax-efficient plan. This strategy included establishing a trust, laddering bond funds, and a new income-producing real estate investment.
Strategy 3: Build And Maintain A Strong Team
Dr. Jones enjoyed working with a high-performance team, and he recognized them as another crucial component for a successful transition. The right people help the practice operate with minimal disruption during and after the sale. Investing in the culture of the practice minimizes staff turnover as you approach a transition. And a strong team reassures buyers as they consider the challenges of assuming practice ownership.
Open and honest communication with the staff, patients, and community is critical in the transition process. Dentists should ensure that staff members are aware of the sale and what it means for their employment, but the timing and tone of communications should be discussed with trusted advisors. At the right time, they should also involve staff in the transition and provide them opportunities to meet with the new owner, ask questions, and voice concerns.
Strategy 4: Market Your Practice Effectively
There are many ways to market a dental practice when it’s ready for listing. A comprehensive marketing plan reaches the target buyer, showcases the practice’s strengths, and attracts potential buyers. Dentists understand internal marketing with patients; it’s essential to attract attention, but it’s also vital to establish a deeper relationship. The same philosophy holds for potential buyers. Prepared sellers ensure that the business’s operational, financial, and branding aspects tell a story that engages interested sellers.
Marketing efforts may include listing on websites that highlight practices for sale, attending industry conferences, or networking with other professionals. We encourage dentists to create a free profile on the DDSmatch website to gain exposure to the market. We only disclose enough information to help a practice sell or attract an associate; more information can be provided after an interested party signs a confidentiality agreement.
Effective marketing is critical to a successful practice sale, but the preparation starts long before the listing. Dentists who choose proven resources and understand the current market are most likely to attract the right buyer and achieve a successful sale.
Strategy 5: Partner With A Practice Transition Specialist
Partnering with a professional transition specialist is the final strategy that Dr. Jones identified. A transition specialist specializes in guiding dentists through the sale process and ensuring a smooth transition for all parties involved. We provide valuable guidance on all aspects of the dental practice sale process, including preparing to list, marketing the practice, identifying potential buyers, and negotiating the deal. We also provide support during the transition period, ensuring patients and staff members are informed and comfortable with any changes.
Working with a transition specialist can also help dentists avoid common pitfalls during the sale process. Mistakes include pricing the practice too low or not understanding the sale of dental practice goodwill. In today’s market, a regional specialist can help a seller capture tens of thousands of dollars that may be left on the table.
Dr. Jones could’ve waited until he was ready to list, but he contacted us early to understand his options. We discussed several corporate dentistry companies and analyzed the details, but he decided to wait for an independent buyer. This measured process helped him navigate toward the outcome that matched his goals.
Putting It All Together For A Successful Dental Practice Sale
Selling a dental practice can be a complex and emotional process, but with careful planning and execution, our clients enjoy a smooth transition to the next chapter of their life. Dr. Jones identified five critical strategies for a successful transition: starting the planning process early, getting financials in order, maintaining a solid team, marketing the practice effectively, and partnering with a professional transition specialist.
By following these strategies, dentists can increase the value of their practice, attract the right buyer, and achieve a successful sale that adds to their retirement funds and legacy. They can also ensure that their patients continue to receive high-quality care and that their staff members are supported throughout the transition process.
At DDSmatch, we love helping owners integrate strategies for a smooth dental practice sale on their terms. It doesn’t matter if you’re six months or five years from an exit; reach out to start the conversation today.