Sell Your Practice
Selling your dental practice is one of the most important aspects of the career you worked so hard to build. There are many things to consider and prepare for when deciding to sell your practice and it is important to start the process early so that your retirement is seamless and that you are able to maximize your profits. With years of experience and industry knowledge, The Tharaldson Group can help you through every step of the way to ensure that you and are able to sell your practice in a timely matter for an appropriate price. Do not leave this important decision to chance!
- PRACTICE FINANCIALS – It is imperative that your financials for the last three years are organized and up to date. The potential buyer, their accountant and the bank will analyze your tax returns, P&L(s), balance sheet, bank statements, general ledger, etc. It is a good idea to work with an industry specific accountant to make sure that each category on your tax return is in line with industry standards, for example, your dental supplies should be no more than seven percent of your total collections and your lease should be no more than ten percent of your total collections. By keeping detailed records and working with an industry specific accountant, you and potential buyers will be able to easily analyze your practice and feel more comfortable with the purchase of your practice.
- PRACTICE HEALTH – It is important that your practice is healthy and functioning at an optimal level. A practice that is increasing year over year and has a healthy flow of new patients is much easier to sell than a stagnant or declining practice. If you don’t have a strong flow of new patients, consider analyzing and then improving upon your marketing systems. Another way to determine the health of your practice is to look at the net profitability, in other words, what is the percentage of the total collections are you taking home after all expenses have been paid. Your practice should net at least thirty percent of your total collections. If it doesn’t, then consider working with an industry specific accountant to see why that is and how you can improve. The net profitability of your practice is the main way to determine a purchase price and can largely effect your sale price and sale timeline. It is important that the buyers are able to see that your practice is healthy and functioning at an optimal level.
- FIRST IMPRESSION –Your practice should look like a “model practice” that buyers can imagine themselves in and would love to practice in. The waiting room is the most important room in your practice and should be modern, yet warm and inviting. Any items that are out of date should be replaced and the front desk should have granite countertops. It can be a worthwhile investment to hire a professional decorator to make your waiting room look perfect and to go with the flow of the rest of your practice. Also, clean out unnecessary paperwork, clutter, miscellaneous items and keep personal items to a minimum. You only have one chance to make a positive first impression.
- PRACTICE EFFICIENCY –Carefully analyze all of the systems that you have implemented for recall, scheduling, billing, marketing, etc. If there is any room to improve you may want to consider hiring a practice management consultant to improve upon, implement or help to create systems in your practice. Detailed systems will not only help your practice become more organized and efficient, but it will ultimately make the transition easier for the buyer.
- DENTAL AND OFFICE EQUIPMENT –Your practice should have digital x-rays and practice management software at a minimum. The office computers should not be older than five years and the dental equipment should be between ten to fifteen years old and in good condition. Any older equipment may negatively affect the sale price of your practice and turn off potential buyers. Technology is important to a certain extent; it is great if you have it and are using the technology, but having the latest and greatest technology in your practice will not warrant a higher sale price.
- GET ONLINE –It is a good idea to create or improve upon an online presence. If you don’t have a website, then think about creating a simple website so that your patients can find you. You can either hire a professional website designer or easily create your own website by using a template. A website will add to the value of your practice because all the buyers will want a website. A strong online presence will add to the “model practice” and turnkey aspects of your practice.