You have a thriving practice and you`re not planning to retire for several years. The last thing on your mind is a forced retirement due to a serious latex allergy!
What do you do when you suddenly are confronted with the fact that you must give up a thriving practice - one that you have thoroughly enjoyed and planned to continue in for several more years?
The reason for this forced retirement? A severe allergy to latex! When I first became aware of the problem, I tried all the remedies suggested by the medical experts at the time. Those remedies included different types of gloves, lotions, salves, powders, and medicines, as well as making changes to my schedule to give my hands a chance to heal. But the acquired allergy and reaction to latex became more pronounced.
I didn`t want to retire from practice, and I didn`t make the decision. I was told by medical authorities that, due to the seriousness of my reaction, I had to leave my practice to avoid a greater threat to my health.
There`s a big difference in having a plan for your retirement and choosing when you will retire vs. being faced with the need to leave your practice immediately. Time is a luxury you do not have in the latter situation.
Like most of my colleagues, I was a wet-fingered general dentist for many years. When it became mandatory and a standard of care to wear gloves, I did. But then came the allergic reaction to latex and the realization that I would lose my practice. So, you see, I`ve been there and can write from personal experience.
When you are first told you must stop practicing, you experience a feeling of panic, which soon disappears. Then, when you tell your family that you are going to have to retire due to this allergy, they experience similar feelings. This reaction and its depth and length is directly proportional to how far along you are in your career - i.e., how long you have been in practice, how long you have been married, how many children you have, and what ages they are. For someone with no choice, these considerations open up a multitude of problems, expectations, and anxieties.
Allow a day or two to feel sorry for yourself. You know, "why me" is a real pity party, so make it private. Then, get over it and start planning for this transition. Your fellow dentists, while they will sympathize with you, have their own problems. The colleagues who will feel the effect the most concerning your exodus from practice are those who depend on your referrals.
Basically, and for all practical purposes, you are alone. You shouldn`t feel surprised, disappointed, or hurt that you are alone, because you chose a profession whose practitioners are fiercely independent. What`s more, over 80 percent still are in a solo-practice setting.
What do I do next?
How do you handle it? Does the American Dental Association, state or local dental society have a program that you can tap into? Do they have literature pertaining to this most difficult transitional period that has been forced upon you? Not really.
I inquired and received a packet from the ADA that was of little use. It would be helpful if the ADA did explore this problem, because it is going to increase as more health-care providers are confronted with latex allergies. According to the latest latex-allergy alert, sent out by the Massachusetts Department of Public Health, from 8 percent to 12 percent of health-care workers are sensitive to latex.
How do you sell your practice? Remember, you were told you had to leave. Time, therefore, is not your ally. The first two calls you should make are to your accountant and your lawyer. Who knows more about your practice besides you? Arrange a meeting with them and map out a preliminary plan with plenty of flexibility, because there will be many changes and adjustments.
Establishing a selling price
You will need to determine a selling price for your practice, based on what it`s worth. How do you determine this price? Your accountant can be a big help here. As far as the value of your equipment and furnishings, your dental-supply house should be able to help you with this part of the equation.
Prepare an information packet that includes the following items:
* Fee analysis
* Production report
* Appraisal
* P&L statement (last three years)
* Overhead
* Fee codes and procedures
* Patient demographics
* Payroll
* Equipment inventory
This information packet should answer most questions, but don`t hand it out willy-nilly. Give packets only to those who are seriously interested in buying your practice and who have the financial means to do so. You will find there are a lot of "tire-kickers" out there.
Selling the practice yourself
Should you sell it yourself or go through a broker? Even though time is against you, I would encourage you to go it alone for a while. You started the practice, you staffed it, and you built it from nothing. You owe it to yourself to try to sell it for a good price.
Have the same confidence you had when you first began your practice. Give yourself a chance, and you will find that you do have the capability to sell your practice by working in close conjunction with your lawyer and accountant. Plus, you`ll be able to keep more of your hard-earned money! After all, who deserves it more?
Put ads in the ADA Journal, state and local dental publications. I found the dental register that some schools maintain to be most useful. Many dentists in search of a practice to buy use these registers, and I received a good portion of inquiries about my practice from dentists who used them.
Then, if you are not having success and time is growing short, I would seek the help of someone you feel you can trust and who has knowledge and experience in the field of practice sales. That`s what I ended up doing.
Selecting a broker
I spoke to several brokers and was unimpressed with what many of them could offer me. I had four valuations or appraisals of my practice prepared, and my accountant was within $5,000 of them. Some brokers will produce a 25-page report, and others will prepare a five-page report. Remember, this beautifully-bound report contains the information you supplied with a fancy price tag attached to it. One broker even wanted to interview my family before starting to work
Brokers have a variety of backgrounds - some are attorneys, some are MBAs, and some are retired dentists. I chose a person who originally worked for the dental-supply house that set me up in practice over 30 years ago.
I find that those in the sales division of the dental-supply business have excellent contacts and are up-to-date on what`s happening in the field of practice sales and purchases. The percent you pay the practice broker can be worked out between you and the person you choose. I would not sign a contract or a time clause, but this is an area in which your lawyer and accountant can best advise you.
Pay yourself first!
I also would strongly advise you to get your money up-front. Who wants to wait each month for a check for the next three to five years?
I understand the interest and capital-gains scenario this creates, but you are not a bank, so don`t try to be one.
You don`t need the headaches! Discount and sell your accounts receivable. If you can`t sell your accounts receivable, obtain a signed agreement that money collected from patients and owed to you goes to you first. This is most important, because it can turn into a major source of disagreement between you and the buyer later.
If at all possible, try to find a buyer with a similar philosophy of practice and patient care. Then, introduce the buyer to your colleagues and patients and stay in the practice for a short time to ensure a smooth transition. There is a bit of a debate on how long is too long, so evaluate your departure date carefully.
If you are reading this article and thinking that it doesn`t concern you, think again. What happened to me could happen to you. Check your investments, disability policy, and other important items related to your financial situation. Remember, there`s not much help out there, so make sure you don`t find yourself alone and unprepared.
