Don’t Wait Until You Hit Your Breaking Point to Sell Your Practice
We often have dentists ask us when should they sell their practice? This of course varies for everyone, but if you are able to, then the best time to sell is when you are financially ready and are still physically capable to practice while still enjoy working and managing your practice.
Why would you sell your practice when you are enjoying it you ask? The answer is so that you don’t regret it. We see dentists each year who wait to list their practice for sale until the very moment they are ready to retire and then the next few months are horrible for them. The sale of your practice is not instantaneous, even for the best practices. Once you make the decision to sell, it will be at best, a few months before you complete the sale. You may need to make some minor updates to your office to make it more attractive (painting, cleaning, etc.), you need to interview and hire a reputable broker like Practice Impact to handle the sale for you, there needs to be a valuation of the practice so you can determine a Fair Market Value listing price, you need to meet with your CPA to ensure that you can indeed afford to sell and retire – all that is before the practice can be shown to prospective buyers! Once you do have a buyer, an offer and signed Letter of Intent you still have to allow the buyer time to get through the financing process with banks which takes a few weeks, and allow both your attorney and the buyer’s attorney to draft, review and agree upon the purchase agreements. There will also need to be time for the buyer to negotiate a lease with your landlord or if they are purchasing the real estate, there needs to be an appraisal of the property, surveys completed and an additional purchase agreement for the building. Needless to say, this is not a quick process and takes much longer than a home sale.
During this time, you have to keep going to work, keep up your production and collections, keep a staff in place and not let on to your staff and patients that you just want to be done with all of them! If you wait until you are emotionally or physically finished being a practice owner, this is painful and a nearly impossible task. Imagine having to go to work day after day, dealing with staff calling off, patients cancelling at the last minute, your back hurting and spending all day wondering if today is the day that you will find a buyer for the practice. Doesn’t sound like fun, does it? And as we mentioned before, the sale process is not quick so this could last for several months or longer. During this time if you begin to resent your practice, it will reflect negatively on your office and will make the sale process even longer. By the time you do finally get to your Closing Day, it won’t be a joyous occasion and you won’t be able to celebrate your retirement or give the new doctor the welcome he or she deserves. You will just be ready to sign the papers and run!
Now, imagine that you make the decision to sell your practice while you are still happy there. You can get all of these necessary pre-listing task completed, you can take your time and not feel overwhelmed during the process. You will go to work each day feeling like you have prepared yourself for the eventual sale and know that you have the luxury of time to find the right buyer. And when you do sell the practice, you may even have the desire to keep working part-time, either for the buyer of your practice or at another office. Many of the pressures of selling your practice will be alleviated if you don’t feel the rush to sell yours right now.
Obviously not everyone has the luxury to sell this way. The urge to retire or physical need to retire may come before you plan for it, but for those who are able to prepare for a sale, the process is much better. If you want to prepare for a sale of your practice call Practice Impact today to discuss your options.