Are you planning on moving your practice to a larger location? Perhaps you’re ready to retire and enjoy the fruits of your long career? In either case, you’re probably ready to sell your dental practice in Massachusetts. Like anyone, you want to get the best price you possibly can to make your transition easier. What will make your practice valuable to buyers, and what can you do to maximize that value? Here are 4 simple tips you should consider when trying to sell your dental practice.
1. Maintain a strong practice
It’s very tempting for many doctors to relax when they know they will be moving or retiring. This is a big mistake, because when banks appraise the value of a practice, they often scrutinize the last 1-3 years the most. If they see a drop in revenue, even if it’s a very successful practice, this will impact their appraisal. The key is to always run your practice like you just opened it: work hard to get new patients, keep your hours flexible, and maintain your current insurance plans.
2. Understand what creates value
What actually dictates the price of your practice? The actual facility and state of the equipment is important, of course, but the most valuable asset is a very active and growing patient base. Make no mistake, this is the number one factor that will dictate your practice’s value. It the main reason people will want to buy your practice or not.
Another factor that ties into this is your profit margin. How much is your overhead versus what your practice gets? This, along with demographics, marketability, and prevalence of PPO plans will all be on the short list of what buyers and appraisers look at when evaluating your practice.
3. Develop a transition plan with your buyer
It’s important to create a plan that will demonstrate the value of your practice after it has been purchased. A plan that shows future financial projections (revenue, cash flow, debt) will have a big impact on how much financing your buyer can get.
Also consider if you or any of your associates will stay with the practice once it has been purchased, and work out the exact details of what that means (such as their compensation versus production level).
4. Work with a specialist
Your number one goal in this whole process is to get the best possible price you can for your practice, but it may be difficult for you to know what that actually may be. How can you be certain that you aren’t leaving any money on the table?
The best way to do this is to work with someone who has experience with this exact type of situation. A specialist will have the particular knowledge of selling a dental practice and why it is unique to any other kind of transaction. They’ll have both the sales training and dental knowledge so that no bit of value is lost. They’ll also be educated on your local market, and can help maximize the unique factors in your area that can make a big difference in the price.
Here at WorkWell Management, we have been helping dental professionals successfully run and sell their businesses for years. Our transition professionals have the credentials, the training, and the experience to help you during this time. It’s the particular set of skills you need right now, and we’re the only place you can get them all.
If you’re looking to sell your dental office in Massachusetts, it can seem like a whole other job at times. We’re able to help you and relieve you of some of the burden. Right now, you should just be worried about making your practice as valuable as you can, and we’ll be the ones to take care of the rest.
If you have any other questions about how to maximize the value of your practice, or how else we can help you, please give us a call today.