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Setting the groundwork for a practice transition beforehand can make the process smoother.
There may be many reasons for a practice transition. One could be in the event of a pending retirement. Another may be for health reasons. Other decisions for this decision range from wanting a current financial gain to divorce proceedings or moving to a different part of the country.
Whatever the explanation for the sale of the dental practice, the preparation for that transfer of ownership is essential to receiving the best price and terms from the buyer. Getting ready and organizing the practice appearance, books and records and the overall presentation necessary for a potential buyer is something that takes time.
Since the dental profession offers one of the highest-paying professional jobs available, a practice transition should be diligently pursued when the time is right for it and the practice should be at its best. Since dental school debt is almost at $300,000 per graduate, those interested in acquiring a dental practice will not waste time looking at poorly appointed or organized practices.
Let’s get ready to sell
There are many points to consider as the years of practice continue to accumulate. If the practice is up for sale now, the hope is that the necessary approaches to the improvement and growth of the practice have occurred so there is no need for a sale at less than what the practice price could have been if the proper steps for enhancing it had taken place. If the opportunity is there to plan from the beginning of the acquisition or startup of the dental practice, the need for sound advisory services is a critical part for long term success and the highest possible sale price when the time is right.
The right advisory services are performed by dental CPAs and dental practice consultants. General type CPAs and business consultants are a mistake and excessive cost in terms of money and the loss of time and expertise that will hurt in terms of practice growth and patient satisfaction. The experienced dental consultant will assist with fee structure, personnel management, technology and other business matters related to dentistry that the general business consultant and CPA will not understand from a lack of experience with dentists.
The dental CPA will assist with the business structure of the practice, cost analysis per line item and review of personnel issues. The need for the proper equipment and whether to buy or lease is a critical approach to the cash flow of the practice. The dental CPA will walk through the actual net costs after the tax ramifications and why it would pay to have an AAA appearance for a cost that may be equal to or less than a lesser appearance.
The attractiveness to the patients and staff of the practice and its out of pocket costs are an area that many dentists fear. The dental CPA should take that queasiness away and assist in the presentation of the least expensive and the highest quality appearance for the office. Word travels quickly on how impressive the office looks. Training the staff properly may seem to be expensive at first but it is cheap over the long haul. The better the staff is trained and the more they understand how to treat patients, the more successful the practice will become.
Offering a competitive salary and fringe benefits that keep highly trained employees at the office stabilizes the flow of patients and office procedures. The dental CPA should be able to tell stories of how a retirement plan kept the best employees employed, even if the take home pay was not excessive from his or her prior experience with other dental clients. The dental practice consultant assists in the management of the office and its procedures to follow. The general business consultant will not understand the professional approach.
Depreciation (wear and tear) and lack of up to date technology and state –of-the-art equipment
As time goes by, the dental practice should make sure that it is a modern, state-of-the-art equipped facility with consistent employee training for contact with patients and other staff. Education should be available to the staff. Dental services should be afforded to them as well without charge, at least after some timeframe of employment. If the staff has unattractive teeth and an unattractive smile, it really makes the dental practice look bad.
Keeping the practice profitable
As much as it may be difficult to pay for the all of the above, these ideas should be thought of as an investment in the future value of the dental practice. The transition will be a much faster and more profitable one if the items listed in this article are followed as much as they can be.