How often do you think about your dental practice’s value in the San Antonio market? If you are not selling your dental practice, or thinking about selling soon, the answer is probably never. Most dentists are focused on their practice’s day to day operations, or, at most, plans that they will implement in the next few years. Of course, there is nothing wrong with focusing on these things, as a small business owner, you need to take care of them. However, too often we see dentists who are ready to put their practice on the market, but have not done anything to prepare. This lack of planning is reflected in the value of their practice. Read below to learn how you can prepare your practice for sale, even if you don’t plan to make a career move for several years.
Why You Should Start Planning Now
What comes to mind when you think about planning to sell your dental practice? Maybe you think about sprucing up around the office, or getting your practice evaluated by a professional company like Blue & Co. There are necessary steps you need to take immediately before selling a dental practice, but there are other steps you can take throughout your career that will help you increase your value steadily over time. Read this blog post to learn more about setting goals throughout your career to increase the value of your practice.
If you are within seven years of retirement now is the time to start thinking about your ideal transition. Keep in mind the following factors that will affect your transition timeline and when you need to start moving forward with your plans.
Your local market will have a great impact on how long it takes your sale to finalize. Some owners are able to move quickly, like Dr. John Wells, whose testimonial reads,
“Thank you for selling my practice in record time. Do you realize that it only took four months from start to finish? Plus we got our asking price.”
Others take more time, especially if the selling dentist has not carefully considered what they want from the sale before listing their practice. This is one reason it is essential to reach out to experienced dental practice transition specialists before selling a dental practice. Our team of transition experts offers a free, no-obligation consultation to help you determine the best timeline to list your San Antonio dental practice based on local market conditions.
There are a variety of ways to transition out of owning a practice including selling outright, working for a set period of time after the new dentist takes over, and dental associate buy-ins. If you choose a route that involves finding an associate to buy-in and eventually take over, you need to get started well before you intend to retire. Similarly, if you plan to stick around as an employee after the sale is final you need to work that into your timeline. If you aren’t sure what type of transition is right for you, talk to our team to learn more about each kind. There are benefits and compromises to each. Remember, DDSmatch Southwest not only helps dentists who are selling a dental practice in San Antonio, we also match associates with dentists looking to expand or find a future buyer. And, with our Trusted Transition Process™ you can have confidence and clarity about the future.
When you’re within ten years of selling your practice it is time to think carefully about the upgrades you make around the office. Some upgrades, like switching to digital imaging, may be worth the cost in order to attract buyers. Others won’t bring a 1:1 return on investment so close to your sale. When you’re thinking about purchasing new equipment you need to have a sales timeline in place so you can determine whether you are making a cost-effective decision. For a more in-depth look at this decision process visit our dental transition blog.
Beware of Mental Retirement
We’ve all heard the old cliche, “the grass is always greener on the other side.” This saying rings especially true for those looking forward to their next phase of life. You’ve worked hard to build a thriving dental practice, and now you are looking forward to relaxing in retirement. It can be easy to get into the retirement mindset before selling a dental practice. Maybe that means reducing your hours, or taking a few extra days of vacation every year. Perhaps you instruct your staff to keep your workload light and slow down your marketing toward new patients. After all your years of hard work you deserve to reap the benefits of a well-run dental practice.
However, there is danger when you enter “mental retirement.” Reducing your hours and seeing fewer patients will have an effect on your practice’s value when it is time to sell. Remember, the value of your practice has a lot to do with its productivity in the final few years. Just because you have built a practice with strong goodwill in the community does not mean you can leave things on autopilot.
In addition, as the owner of a dental practice you set the tone for your staff. If you have one foot out the door that will affect morale, making your office a less than welcoming place to be. Your staff and patients won’t be as excited as you are that you are selling your dental practice. Don’t let your own excitement for the next phase of your life negatively affect the practice you worked so hard to build.
If you find yourself longing for retirement and dreading work each morning it may be a good idea to move up your retirement date. Luckily for dentists in San Antonio, the market has never been better for sellers. San Antonio is one of the fastest growing cities in the United States. Plenty of younger dentists are taking note of this and choosing to plant roots in San Antonio and the surrounding areas. If you own an established practice in San Antonio your value has likely risen significantly in the past few years. To find out whether now is the right time to list your dental practice contact DDSmatch Southwest for a free, no-obligation consultation.
Assets You Should Focus on When Selling a Dental Practice
What exactly goes into determining the value of your dental practice? Whether or not you are planning for a sale in the near future you should know what assets you need to focus on to build a strong practice. Many dentists incorrectly assume the tangible assets, your dental equipment and real estate, will make up a majority of the sale price. However, 75% of your sale price actually comes from active patient records and your “brand.”
18 months prior to getting a practice valuation, your active patient records should be high. It is well worth putting in extra time with each patient to make them feel welcome, and to ensure they return for regular check-ups. This steady patient stream will give your buyer confidence that what they are purchasing will provide reliable income from the beginning.
In addition to these records, your buyer has confidence in the purchase because of the legacy you have established over the years. Your dental practice is a staple in the community, your employees are trustworthy, and you have a reputation for providing outstanding work. That is why, when you are selling a dental practice, you need to focus on establishing your brand and leaving a tangible legacy.
Raise Your San Antonio Practice’s Value with These Tips
Oftentimes dentists ask us, “what else can I do to raise my practice’s value.” When you start thinking about selling your practice you need to make sure you are getting the true value of the work you poured into it. Our Trusted Transition Process™ provides clarity for both buyers and sellers so you can be certain you are on the right path.
However, even if you have followed all of our suggestions above, you may notice your practice’s value is holding steady rather than rising. If this is the case you need to focus on the following factors in order to raise your practice’s value before you sell.
- Patient Fees: When was the last time you raised patient fees? Many dentists are hesitant to raise fees, fearing they will drive patients away. However, patients know it is reasonable for your fees to increase over the years. Make sure you stay competitive in the local market, but don’t keep your fee schedule artificially low.
- Insurance Negotiations: It is good business practice to renegotiate with your contracted insurance companies whenever possible, not just when you are thinking about selling your dental practice. If you don’t, you could be leaving money on the table. If you aren’t sure how to do this contact our office and we will connect you with a dental insurance navigator who can help.
- Overhead: Your practice’s overhead will see ups and downs over the years as you spend on new equipment, employee salaries, and office supplies. After owning a practice for a decade or more you are probably used to these ups and downs, but that doesn’t mean you shouldn’t pay close attention to them. Shop around to make sure you aren’t overpaying for supplies, and make sure you’re keeping a reasonable budget. Too much overhead will lower your practice’s value.
- Marketing: It can be tempting to reduce your marketing budget as you start thinking about selling your San Antonio practice. After all, you won’t be treating the new patients for very long. However, as we explained above, active patient records make up a large portion of your practice’s value. We recommend you maintain your marketing budget even as you consider selling your dental practice.
- Office Updates: Again, as we explained above, when you are considering a transition you need to keep in mind that some office updates won’t bring a 1:1 return on investment. However, first impressions matter and making small cosmetic changes will help your practice sell faster without breaking the bank. If your practice is still sporting lime green wallpaper from 1975, it may be time to give your office a facelift.
Of course, each San Antonio dental practice has unique opportunities for increasing value. Some will be quick and easy to implement, like cosmetic upgrades. Others will take time and planning, like negotiating with insurance companies. No matter what, it is important to start thinking about and planning for your sale early. The more time you give yourself to make changes the smoother your transition will be. To find out how you can raise the value of your dental practice talk to our transition experts.
Selling Your Dental Practice? Don’t Wait Until It’s Too Late
With the current market conditions, dental practice owners in San Antonio are making more than ever on their sales. If you own a dental practice in San Antonio now is the time to contact our dental transition experts. Even if you are several years away from listing you should start thinking about adding value to your practice before it’s too late.
At DDSmatch Southwest our transition experts provide a clear and consistent roadmap called the Trusted Transition Process™. We help dental practice owners discover ways to add value and get the most out of their sale, while maintaining the legacy they worked so hard to build. Here is what you can expect from the process.
- Conceptual Transition Experience
- Strategic Practice Outreach
- Trusted Valuation Analysis
- Clinical Opportunity Blueprint
- DDSMatch Interview Alignment
- Dental Advisory Connection
- Vision Alignment Completion
Selling a dental practice doesn’t have to be a stressful process. With guidance from our team of experts your ideal transition can become a reality. To learn more about the process and find out whether now is the right time to list your San Antonio dental practice contact our team for a free, no-obligation consultation. It all starts with a conversation!