What are the Essential Elements of Proper Dental Transition Planning?
Many dentists consider selling their current practice and moving it to another location. But transitioning the dental practice can be a stressful and time-consuming process. From performing practice valuation and finding prospective buyers to shifting the practice to a new area, it can be daunting to do all these tasks all alone. It’s when the dental practice transition consultants come to help. These professionals help both sellers and buyers make smooth and profitable transitions. This article explains the essential elements of proper dental transition planning.
Professional dental practice transition consultants use enormous amounts of data during the transition planning process. If the dentists are unsatisfied with their practice’s value, the transition consultants can research differently and provide professional recommendations on boosting the bottom line. The consultants first collect practice data and financials to evaluate elements like cash flow, profit and loss statements, balance sheets, and a comprehensive practice profile.
Selling a practice involves many moving parts, and hiring a transition consultant can help navigate all complexities. These professionals connect with potential buyers and inform them everything about the practice for sales. The consultants ask the potential buyer to sign a non-disclosure agreement to safeguard the confidential nature of the transaction. After signing the contract, they share additional details about the practice, like its location, infrastructure, or facilities.
Moreover, consultants vet the buyer to understand his background, production capabilities, goals, preferences, and requirements. If the buyer seems interested, consultants take him for a practice tour. Both seller and buyer sign the letter of intent if the buyer agrees to proceed. These experts can also provide attorneys or lenders to the buyers.
Supporting the Seller and Buyer
One added value of including experienced dental practice transition consultants in the process is their role in keeping both seller and buyer on track. It might constitute providing exhibits, helping buyers set up credit cards, payroll services, or insurance processing, preparing patient announcement letters for sellers, and more.
Adding an Associate
One popular transition choice that many dentist practice owners make is hiring an associate who eventually buys into the practice as a partner. It is a good option if there are enough patients to support more than one dentist.
If the patient base is insufficient, the practice owner can reduce his schedule to allow the new dentist to attend to his own share of patients and be productive. A partnership must be supported by having a properly designed partnership agreement specifying all the financial and operational terms.
When going through the practice valuation process, dentists must document all their vital business information in a single place and keep it safe. This way, in an emergency when they can no longer work as a dentist, their partners or family members will have the information to prepare a valuation quickly.
Dental practice transitions can take multiple forms. A dentist might consolidate or sell his practice. And another dentist might relocate to another state and establish a new practice. Whatever the transition form is, hiring a professional consultant can help in a smooth practice transition process.