John F. McDonnell
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What if you could sell your practice and office space at the fair market value and stay on after the sale, continuing to enjoy dentistry and earning a fair compensation for two to 10 years or more, depending on your age and exit timetable? Although an outright sale when the selling dentist exits the practice is still the most popular exit strategy, selling and staying on after the sale is becoming a good option for many.
Reasons to sell and stay
When we interview dentists who are preparing their exit strategy, the common theme we hear is they still enjoy performing dentistry and communicating with their patients, but they do not like running the business, dealing with insurance companies, and handling staff issues.
1. They are tired of being a business owner 24/7, 365 days a year.
2. They have the peace of mind of completing their exit strategy while still practicing dentistry.
3. We are finding dentists in their 30s to 50s who have good practices, a large debt service, and high monthly payments to the bank, but due to the high debt they find business very stressful and their earnings are not as high as they would like.
4. Some dentists from ages 50 to 70 do not want to sign another long-term lease that commits them to a space longer than they want it.
5. Owners with a full-time associate realize that they can switch roles with the associate and stay on after the sale.
6. Many baby boomers have set a goal of selling their practices after they reach age 55. This strategy allows them to sell but continue earning income and increase savings to offset losses they had due to the economic downturn.
Who are the buyers?
• Dentists who see the opportunities in dentistry and choose to own multiple practices. They are able to keep the selling dentist and take charge of all of the business aspects of the practice, including responsibility for future practice growth.
• Dentists who are in a dead-end associate employee job who are willing to buy a practice now and wait for it to grow so that they can have their own practices. They may continue to work a part-time job as they grow around the former owner.
How to explore the sell and stay strategy
• Choose a transition organization that specializes in practice transitions and does not have other products and services to sell such as dental equipment, financial planning, and practice management.
• Have your practice valued by a qualified transition specialty organization that is experienced in this area.
• Decide what you want to do and what your timetable is. Plan your transition now including how long you want to stay after the sale.
For the dentist who loves performing dentistry and communicating with his or her patients, who is ready to implement a successful exit strategy, selling the practice and staying is an excellent alternative.
John F. McDonnell is the founder and president of The McNor Group, a dental brokerage and practice-transition firm focusing on the MD, DC, VA, PA, DE, and WV areas, and is the past president of American Dental Sales. He can be reached at [email protected] or (888) 419-5590, ext. 410.
