As a small business owner, planning for retirement includes much more than saving money in a retirement account. For dentists who are reaching the end of their careers and trying to plan well for retirement, knowing the current market trends is vital. It is the first step they should take before deciding when to list their dental office for sale.
ADA Statistics About Retirement
The ADA reports on the average age of dentists, and can offer those reaching retirement age a roadmap to retirement. According to a Dental Workforce Study the average age of United States dentists in 2015 was 50 years old. This number is up from an average of 48 years old in 2005. In addition, the average age of retiring dentists in 2015 was 68 years old, also up from 66 years old in 2005. What do these statistics tell us? While most dentists are waiting a little longer to retire, almost half of all dentists currently practicing will reach retirement age in the next 10 years.
With so many dentists reaching retirement age soon, the market is expected to be flooded in the next five to ten years. If you are one of these dentists you must start planning and strategizing now for your retirement so you don’t put your practice on the market at the wrong time. In fact, your practice is likely worth more today than it will be in 2025 when more doctors decide to list their dental office for sale.
Answering Questions About Retirement
We address some common questions and concerns dentists approaching retirement age have below. However, these questions and answers are helpful to dentists at any stage. Even if you are not reaching retirement age in the next five years it is a good idea to think through these questions and create a retirement plan.
How much is my practice worth?
Finding the true value of your dental practice is a complex process. While you can find plenty of general rules or calculators for finding your practice’s worth, these estimates are largely inaccurate. To find your practice’s true value you need to speak to a dental practice transition specialist. Specialists, like those at ddsmatch Southwest, take into account a wide variety of factors when determining your practice’s worth. Our team works with dental CPAs and business valuation experts with experience in the local Texas and New Mexico market to determine your practice’s value and help you get the most out of your sale.
Is adding an associate a good idea?
Many dentists aren’t ready to put their dental office for sale, but do want to cut back on their hours. Adding an associate can help dentists who desire a slower transition out of their practice. However, it is important to consider whether or not your practice can financially take on an associate. The ddsmatch Southwest transition specialists can help you determine whether or not your practice is prepared to take on an associate, and help you find the right one when you’re ready. Whether you’re adding an associate as a retirement strategy, or simply want to grow your practice, talk to the ddsmatch Southwest transition specialists to get the process started.
Is it a good idea to sell to a DSO?
A Dental Service Organization, or DSO, will manage the non-clinical work in a dental practice. There are several pros and cons to selling to a DSO, and it is a highly personal decision. Owning a dental practice means managing a lot of business decisions in addition to handling the clinical work of dentistry. If you dislike managing the business side of things, selling to a DSO rather than listing your dental office for sale to another private practitioner may be a good option. It can also make your practice more attractive to associates, because these practices often pay more than private practitioners.
However, a DSO’s management will be different and many dentists find it difficult to watch how the practice they built changes under new management. If you’re curious about more pros and cons of selling to a DSO visit this post by a dental and medical law firm.
How can I find a buyer?
If you decide not to sell to a DSO, how do you find the right buyer? For dentists practicing in Texas and New Mexico, ddsmatch Southwest helps match buyers and sellers. The Trusted Transition Process used by the ddsmatch Southwest practice transition specialists will determine how much your practice is worth, as well as your wants and needs as a seller. Then, we find a buyer with the skill set, experience, and personality to take on your practice and continue your legacy. If you’re considering listing your dental office for sale speak to one of the dental practice transition specialists at ddsmatch Southwest for more information about this process.
How do I prepare for retirement?
If your retirement is three to five years away now is the time to start planning. A financial advisor can help you determine whether or not you have enough money set aside to retire with the lifestyle you desire. Read this dental economics post for more information on planning to retire on time. After creating a personal financial plan speak with a dental transition specialist, such as the experts at ddsmatch Southwest. They will help you create a step by step plan to guide you smoothly through the years before retirement.
What if I own real estate?
If you own the real estate your dental office sits on, you should know that the deal you make when you list your dental office for sale does not automatically include that real estate. If you choose to sell both the practice and the real estate at the same time it is not a difficult process, but that could change who your buyer is as the buyer will likely need financing for both transactions. While separate, both transactions can often be closed at the same time, making the process easier for both parties.
What if you don’t want to sell your real estate? Another option is to keep the real estate and start collecting rent. This post reviews the options available in more detail so you can make an informed decision. You should also sit down with your dental CPA and dental attorney to discuss the tax implications, and how owning the real estate will affect your lifestyle and budget.
When should I sell to get maximum value?
There is no straightforward answer to this question, as it must be answered on a case by case basis. The values of dental practices, and local market trends, vary greatly. However, taking into consideration the ADA statistics shared above, listing your dental office for sale before the market floods with retiring doctors will help you get the maximum value. The best course of action is to speak with a dental practice transition specialist with experience in the local market. Your transition specialist will be able to advise you on when to sell your practice for maximum value.
What do I do if my partner won’t buy me out?
Dental practice partnerships have many benefits, but they can also make things more complicated when there is a transition. However, ddsmatch Southwest also helps dentists sell part ownerships. We match dentists wanting to sell a part ownership with buyers who wish to buy into a partnership. To learn more about the process of selling a part ownership, and get your specific questions answered, schedule a consultation with our dental practice transition specialists.
Who can I trust to help with my transition?
After a lengthy career you need a trusted advisor to help you get the most out of your sale, while also protecting your legacy. Before listing your dental office for sale it is important to find a dental practice transition specialist with years of experience in the local market, and a proven track record of successful transitions. In Texas and New Mexico dentists trust the specialists at ddsmatch Southwest. Our team of transition specialists will guide you through the process, so your transition into retirement is as smooth as possible.
Think Ahead Before Listing Your Dental Practice
At ddsmatch Southwest we do much more than simply list your practice when you’re ready to sell. Our Practice Optimizer Experience helps you realize the fair market value of your practice and determine whether or not you are ready to enjoy retirement. The Practice Optimizer Experience prepares you with these services:
- Conceptual Transition Experience: Create goals and strategies that will help you map out your road to transition and retirement.
- Trusted Valuation Analysis: Two valuations, one at the beginning of the process and one when you are ready to list your dental office for sale, give you a clear picture of the value of your practice.
- Dental Insurance Navigator: With our insurance advising partner you will get advice on new insurance plans to consider, plans to discontinue, and more.
- Clinical Opportunity Blueprint: We analyze your practice and provide you with a blueprint for potential additional earnings.
- Critical Metrics Analysis: A customized practice report on critical items is provided, with annual reviews and updates until your transition is complete.
In addition to these services the Practice Optimizer Experience also includes services for overall retirement planning including:
- Ideal Retirement Calculation: In order to establish the best timeline for your retirement we offer a financial review of your investments and future income projections. This can be done either in tandem with your financial advisor, or as a third-party supplement.
- Estate Preparedness Gameplan: We refer our clients to a local attorney with experience in estate planning in order to create or update important legal documents. These documents are essential to protect you, your family, and your practice’s assets and value in the case of an unexpected death or disability.
Listing your dental office for sale takes planning and preparation. If you are considering retirement, or will be retiring in the next five to ten years, now is the time to sit down and consider your options. Carefully planning now will ensure a smoother transition down the road. To learn more and set up a consultation contact the dental practice transition experts at ddsmatch Southwest today.