Most often, when a dentist inquires about appraising or selling a practice, the inquiry looks like this:
“I want to appraise my practice. How much do you charge?”
Or this:
“What are your fees for selling a practice?”
These honest and reasonable questions assume that the dentist asking knows everything there is to know and just needs one transactional lever to be pulled. But that’s rarely the case.
Unfortunately, outstanding results don’t originate from hard work. They might be the outcome of hard work, but that’s not the origin. Outstanding results originate from asking the right questions. Asking the right questions removes assumptions. Assumptions can be a major cause of disappointing results in a practice sale. With the right questions answered, vision and direction then dictate where the hard work and efficiency can yield results. There are no secrets in a practice sale. It’s all on the table. Skeletons in the closet, known or unknown, get found.
There are many currents in the proverbial river of selling. If you’re considering a practice sale, here are five questions I’d encourage you to be able to answer with clarity and conviction before you jump in that river:
- Is the corporate structure of your dentistry professional corporation set up in a way that maximizes net proceeds upon sale and minimizes the amount you’ll be wiring to Parliament Hill?
- Has your financial advisory team evaluated your anticipated net result of sale proceeds to show you how this will be invested in your portfolio and long term investment plan?
- Have you been honest with yourself and asked yourself what makes you want to sell, what makes you want to sell now, and what freedom needs to be achieved that makes selling the right decision? Is it freedom from management? Is it freedom from financial demand? Is it freedom of your time?
- Has a professional appraiser or advisor evaluated the opportunity in your practice today that might support you in attaining more freedom as an owner and/or in maximizing practice value before you list?
- What do you know about your lease, the clauses within it, its long term potential, and transferability? (The answer to this needs to be “Everything”.)
If you are
- 3 to 7 years away from the consideration of a practice sale, and
- Succession planning is a strategic priority (not a side project), and
- You want someone that can quarterback your succession plan (not just consult or advise around it, but to fully see it through),
then I’d love to connect with you to learn about your vision, where there is complexity in that vision and how we might be able to make the future you want the future you get.
And by the way, Succession by my definition is not “retirement.” Succession is defined by three elements: Preparation, leverage, and freedom.
If retirement is your goal, then your succession needs to prepare you to achieve the leverage and freedom required for this to be realized. If retirement isn’t the goal, then selling your practice needs to provide the leverage and freedom to do whatever’s next in your career.
Sean
P.S. Here are two other ways we support practice owners in their succession planning.
Valuations – Our valuations typically realize a return on investment within the same month it is completed (and certainly within three months).
Succession Compass – Our new tech tool that has already helped practice owners with the organizational structure, materials, and capability to list their practice and sell it themselves.
