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The LaMaster Law Firm Blog

Thursday, November 30, 2017

Preparing Your Dental Practice for a Smooth Transition

There comes a time for those running a dental practice to consider transitioning and ensure that the business is well positioned to attract buyers. Regardless of how profitable your practice has been, it is crucial to maximize its value before the sale. This article is a brief discussion of some important steps to take to prepare your practice before taking it to market. As always, you should always consult with an attorney who has experience providing legal services for dental professionals.

The Office

When a buyer walks through the door, your office should showcase the practice which means it is crucial to tune up the equipment and clean up the facility. It is not necessary purchase new  equipment, but have maintenance and repairs performed on all equipment instead. Also, clean up any clutter around the office and if need be replace worn furniture, paint and freshen up the facility.

Maintain Patient Numbers/Production

Obviously, the most important metric for buyers is the number of patients since this will indicate whether the practice is vital. In the current market, attracting new clients may require setting up a website, implementing a digital marketing plan, and having patients complete online reviews.

Additionally, heading into retirement, avoid the temptation to slow down or take a vacation and maintain your historic production levels. Otherwise your practice may see a marked decline in profit and therefore, its value.

Evaluate Fees

As a general rule, fees should be evaluated and adjusted on an annual basis based on what the market bears in your location. If it has been more than a year, adjust your fees before putting the practice on the market

Management

Selling a practice ultimately requires providing prospective buyers with a lot of financial information including financial statements, accounts receivable, credit balances for the prior three years as well as potential lease issues. In the end it is crucial to demonstrate that your practice is well managed.

The Bottom Line

In the final analysis, it is never too early to plan for selling your dental practice. In fact, you are well advised to start preparing for the sale three to five years before taking it to the market to ensure a smooth and successful transition.





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