Ideally, every dentist who owns their own practice will eventually retire and list their practice for sale. The hard work dentists put in over the course of their careers should be rewarded when they sell a dental practice. Too often, however, dentists don’t plan well or set specific goals for their career. When it comes time to retire, these dentists scramble to get their practice running smoothly in order to get the full value when they sell. One of the keys to a successful dental practice transition is setting goals early. Learn our best tips for setting goals so you can plan and prioritize your future.
When to Start Setting Goals
As a young dentist, fresh out of school you probably didn’t think much about retirement. At most, you set up a retirement savings plan and contributed part of your income to it every year. There is nothing wrong with focusing on building your practice at this point, throwing your energy into growing your practice is a good career choice. However, every decision you make, even early on in your career, will have repercussions later on when you decide to sell a dental practice.
The American Dental Association reports the average age for dentists at retirement is 68, much higher than the average retirement age of the general U.S. population. While this fact suggests dentists love what they do and decide to work longer than those in other professions, it may also indicate something else. Many dentists nearing retirement age aren’t financially ready to retire and maintain their current lifestyle.
Too often dentists assume the proceeds from the sale of their practice will carry them through their retirement years, without actually knowing how much money they will need. They end up making the difficult choice between reducing their lifestyle to match a lower income, or working longer than they really want to. Dentists who start to plan at least ten years ahead of their desired retirement date are able to retire on their own terms. Individuals who plan even further in advance are setting themselves, their practices, and their families up for success.
Even if you do not plan to sell a dental practice in the near future there are goals you can set for yourself that will make a difference down the line. That is why we recommend dentists at every age sit down and think about the trajectory of their career such as whether they want to own a dental practice with multiple locations, if they want to be part of a group practice, and what age they would like to retire at. Knowing what you want out of your career can help you make a roadmap for the next five, ten, or fifteen years and more.
Setting Goals Early in Your Career
If you are still a long way from retirement, your energies are likely spent on building your practice and learning how to be a successful small business owner. Believe it or not, this actually plays a large role in how successful your future practice transition will be. When it comes time to sell a dental practice, your buyer will want to know the practice is running smoothly, patients are happy with their care, and employees are competent and loyal. More than anything though, your buyer will want to know they are buying a practice with a long standing record of goodwill in the community.
In Austin and the surrounding areas there is a lot of competition for general dentists. According to Texas Health and Human Services there were 584 general dentists practicing in Travis County in 2020. Early on in your career you need to think about what will make your practice stand out in the marketplace, and how you can become an essential part of the community. The better established you are the more value you build.
Early in your career is also the best time to form relationships with other professionals who can help your business. You’re a dentist, and as such you don’t need to be an expert in tax law or real estate. Hire experienced professionals like a dental-specific CPA who can guide you through important business decisions. Learn about running a small business by signing up for continuing education. Educate yourself on how to find great employees and empower them to do well. Set yourself up for success by recognizing you don’t know everything, but you can learn.
Write Down Career Goals, Sell a Dental Practice at The Right Time
Early on in your career your timeline can be flexible. For example, at 35 you may decide you will retire at 65, but when that time comes, you may decide you want to keep working another three years. The purpose of goal setting isn’t to be rigid, it is to give yourself time to do things right so you can retire on your own terms. Once you determine what your overall career goals are you should make specific goals for the next five years, ten years, and so on. Ultimately, each goal should build off the last one in order to build your practice and retire when you want.
What do we mean when we say you should make specific goals? We are talking about physically writing (or typing) your goals out so you can refer back to them periodically. Take out a notebook and pen, or open up your computer and list the goals you want to accomplish in the next five years. Do you want to open a new practice location? Hire more hygienists? Increase your production by 10% every year? Sell a dental practice in Austin and relocate? When you finish your five year goals, start writing your ten year goals, then continue on until you get to the year you want to retire.
One thing to remember when you are creating your roadmap is to make sure each step makes sense in relation to the others. For example, five years before you plan to retire is not the best time to buy a new dental practice. By the time you are five-to-ten years away from retirement you should be thinking about getting your current practice ready to sell.
In addition, each goal needs to be realistically achievable with the resources you have available.
You may set the goal of adding additional services, but if you don’t have the training to offer these services the goal becomes achievable. If you want to meet the goal of offering additional services you need to set out a time and place to get the training you need. If you take the time to list out all the goals you have for your career, you can plan to sell your practice on your own terms.
Refer to Your Goals Often as You Plan to Sell a Dental Practice
When you have your career goals mapped out keep the list in a safe place and refer back to it yearly. Look at your next milestone and make a plan to meet it. For example, if your goal is to hire an associate, you need to make sure your practice is producing at a high enough level to take on an additional dentist. If you take steps now to increase production your practice will be ready to take on an associate by the time you planned to bring one on.
Each time you refer back to your goals you should make sure you are still on track for your ultimate goal, selling your practice when the time comes. If you are unsure whether your roadmap is realistic and achievable talk to our transition experts. We can help you determine the right time to take specific steps such as reducing your hours or remodeling your office.
Reevaluating Before You Sell a Dental Practice
Again, the aim with setting specific goals is not to be rigid. That is why we recommend looking at your list of goals regularly. Maybe when you were fresh out of dental school you imagined owning a dental practice with multiple locations in Austin, but ten years down the road you decide you would rather slow things down and focus only on one location. There is nothing wrong with changing your mind, as long as you are the one in control.
Reevaluating is also important to make sure you are on track for both short term and long term goals. Your goals are like dominoes, which is why you cannot focus solely on your next milestone when you take out your list of goals. You may find you need to adjust your current actions in order to meet your 20 year goals. In the example above, when you decide you want to focus on owning one location instead of multiple locations, that will have a great impact on what you do with your time and energy. In this case you need to adjust your long-term goals to match your change in direction.
Prioritizing Retirement Goals
What if you are less than five years away from your desired retirement date and you have not planned ahead to sell a dental practice? While it is never too early to start planning, it is also never too late. The first step you should take when retirement is on the horizon is to contact the dental transition experts at DDSmatch Southwest. We have created the Practice Optimizer Experience to help dentists plan and prioritize for their retirement. Our goal is to take the stress and worry out of planning for retirement by guiding you through every step and helping you build value in your practice. Here is what we do for our clients:
- Conceptual Transition Experience: Our experts will sit down with you to discuss your desires for the transition and how you want to live after retirement.
- Trusted Valuation Analysis: Our partners at Blue & Co. perform two analyses. One at the beginning of your journey to give you an idea what your practice is worth now, and one to provide your buyer before you sell a dental practice.
- Ideal Retirement Calculation: What plans do you have for life after retirement? Our partners at HK Financial Services review your investments as part of your Retirement Check-Up in order to ensure you have enough set aside.
- Estate Preparedness Gameplan: Retirement is about more than traveling and playing golf. Our team will refer you to an estate planning attorney to help you set up important legal documents to protect your assets.
- Dental Insurance Navigator: Renegotiating your insurance plans can add value to your practice. Shelley DeGroff at Integrative Dental Solutions will help you review your plans for maximum profit.
- Clinical Opportunity Blueprint: Are there areas in your practice that could boost your growth? This analysis shows opportunities you can take advantage of to increase your practice’s value.
- Critical Metrics Analysis: This periodic report shows how your practice is performing over time. It will help you determine how to improve production and value.
- The Trusted Transition Process™: When you are ready to sell a dental practice in Austin our Trusted Transition Process™ provides a clear and consistent roadmap. We are committed to transparency at each step so you can sell and move on with your retirement.
With the DDSmatch Southwest transition team on your side you will have expert help to decide things like whether to renegotiate insurance plans, what areas of your practice to invest in, and whether or not to take on an associate. The Practice Optimizer Experience ensures no detail is overlooked so you can retire with confidence.
But don’t take our word for it, see what clients like Ryan S. have to say.
“Tremendous experience! Working with DDSmatch was so easy and they went above and beyond to help us through the entire process. Truly personalized service, super responsive and detailed. I would highly recommend them to anyone buying or selling a practice!”
When you’re ready to talk to an expert about your dental practice transition, call DDSmatch Southwest. Our team is ready to help you plan and prioritize for your future. Set up a consultation today by calling 855-546-0044.