Considerations in Dental Practice Transitions - Carroll & Company

OBJECTIVEThis presentation will help answer general questions with regard to how dental professionals can prepare their practices for sale to be assured of realizing the best value.

These check points will help you determine whether the time is right to sell, and what steps to take in order to sell your practice in the least amount of time. We look at the different types of transition open to today’s dental professionals, and reasons for moving ahead or holding back.

Our guidelines also help you understand and navigate the complex process of appraising, selling and transitioning your dental practice, as well as the emotional aspects of making such a major life change.

Mike Carroll

Carroll and Company

WHAT SHOULD YOU DO TO PREPARE YOUR PRACTICE FOR SALE?

Determine your personal, professional and financial objectives

Maintain the practice at current levels

Maintain or develop documentation and filing systems providing easy access to important data on the practice

Use competent professional advisors experienced with dental practices

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INFORMATION NECESSARY FOR A SALE

Financials

Reports

Philosophy of practice

Information on community

List of equipment and furnishings

Pictures or video of office

TYPES OF PRACTICE TRANSITIONS

¤Partnership - all types

¤Seller brings in an associate, continues to maintain ownership until some predetermined date then sells to associate

¤Seller sells practice and works for buyer as an employee for some predetermined period of time

¤Seller finds a suitable buyer and leaves the practice

REASONS FOR A TRANSITION

¤ Seller wants to focus his/her attention on other areas and interests in life beyond the practice of Dentistry

¤ Seller wants to spend more time outside of the practice

¤ Seller has more patients than he/she can handle

¤ Seller wants to share management duties or totally give up management responsibilities

¤ Seller wants to taper off his/her workload near time of retirement

¤ Seller is ready for retirement

REASONS AGAINST A TRANSITION

¤ Not enough patients and/or productivity in the practice

¤ Seller is concerned about giving up control

¤ Seller prefers to practice alone

¤ Seller’s facility is not large enough

¤ Practice finances don’t make a transition feasible

¤ Seller is not yet committed to retiring

NEGOTIATIONS

Price and Terms

Assets included

Seller should also provide a schedule of items not included in the sale

To sell or not to sell Accounts Receivable?

Allocation of purchase price

ADVISORS – BUYING AND SELLING

¤ BROKER/TRANSITION SPECIALIST ¤ Acts as a trusted advisor throughout the process ¤ Maintains confidentiality at all stages ¤ Provides professional appraisal of the practice ¤ Informs on current market conditions ¤ Identifies suitable and qualified buyers ¤ Assists buyers in gathering practice information ¤ Discloses whose interest they represent ¤ Negotiates between buying and selling parties ¤ Coordinates efforts of attorneys, accountants, lenders, etc. ¤ Helps to arrange financing ¤ Assists with transition steps ¤ Advises on lifestyle and emotional considerations ¤ Brings about closing in a timely, profitable and professional manner

ADVISORS – LEGAL & FINANCIAL

¤ Attorney

¤ Banker

¤ Financial Planner/CPA

¤ Management Consultant

¤ Insurance Agent