A profitable practice with a strong patient base is worth a lot more than a ship left adrift. Whether you are actively planning on selling your practice in the near future, or just want to keep your options open for an exit strategy—there are four things you must do to if you want to come out ahead and move on to bigger and better things!
1. Clean House!
When you sell a house, you get everything in working order, make sure there are no leaky pipes, and paint the walls. Your practice is no different.
- Do your best to eliminate any lingering receivable accounts.
- Make sure there are no outstanding process issues that require constant cleaning up.
- Paint the walls, literally. Replace or repair anything that you wouldn’t want to show a prospective buyer today.
- Make sure your systems are self-sustaining, from patient records to supply cabinets.
- Ideally your staff and office culture should be positive functional. If you have problem children, that’s a headache no one wants to deal with. Invest the time to build a sustainable office dynamic before you plan for a transition.
2. Build Momentum!
For a lot of us, knowing you are going to be selling means you are tempted to relax and slow down. It really means you should start building momentum instead. Keeping your appointments booked and your revenues up will make your practice a more appealing sell. No one wants to buy a declining practice.
- Marketing – Keep your marketing plan in full force. Increase your online presence and monitor your reputation marketing. Whatever marketing initiatives you’ve been doing, put the pedal to the metal and get your business at its highest historical point.
- Patient Outreach and Recall – Keep your patient base strong and don’t stop accepting new clients.
- Assess Your Fee Schedule – Many practices do an analysis of their fees to see how they compare to other comparable businesses in the area. If your fees are lower than the average, raising them to market value will be an asset when you sell and increase your revenues. Most happy patients will not see fee increases as a betrayal, despite your fears.
3. Meet with the Right People
- A Qualified Facilitator – A person who has a track record of facilitating successful mergers and acquisitions. This person should be able to represent you with your best interest at the forefront of this consideration. Creating a business strategy plan for you is essential, then negotiations, then contracts/terms. Preparing a practice for pre and post transition success is vital today due to the three buckets that are filling our industry dynamics:
- Private Practice,
- Middle Market Groups
- DSO Corporate Group.
Each will have their unique consideration before making a clear decision.
- A Broker – Find one with experience in dental practices and have them create a certified valuation. This should be a detailed valuation of every attribute of your practice: equipment, patient base, location, and everything else, tangible and intangible.
- Your Accountant and Financial Advisor – These people can help you understand what your current financial situation looks like, what the tax repercussions will be when you sell, and what you can afford to do once you’ve sold the practice.
- A Dental Attorney – If you have an associate, you’ll need an employment contract. If he or she doesn’t want to buy, a restrictive covenant and non-solicitation clause are a must. Your attorney can make sure you’ve covered all your legal bases.
4. Make Yourself Redundant
Take a close look at anything you do other than patient care. If someone else can’t come in and take your place intuitively, you need to work on your processes. Apply this even to your hiring practices. Even though they may not all survive, having all your ducks in a row will make the practice easier to sell and ensure a smoother transition.
The Process of Selling is Professional Growth for the Buyer
Selling your practice profitably is, for many, a lesson in business management. Going through the process of getting your practice ready for a smooth transition will give you the skills needed to go on to bigger things. Approach this process as another step up in your accomplishments as a Dentrepreneur®!
Stay connected for more tips on buying and selling your practice. Contact us for assistance evaluating your due diligence, practice management, practice leadership, clinical aptitude of all providers & your team members’ core strengths, your systems, your culture, your processes, supporting technology, and, most importantly your vision, core values, transfer of patients for goodwill and profitability for your future.
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