It is amazing how many dentists never take the time to plan for their impending retirement. Theoretically, a robust dental practice should be a thriving asset that, upon the retirement of the founder, should be worth many times what it initially cost to start the business. Unfortunately, this is not how most dental practices conclude. Many dentists thinking about retirement slowly refer out work that they perceive to be tedious, work fewer hours and shorter days, and stop accepting new patients. The result is a dental practice that should be thriving is now withering away and actually worth less than it could be.
It does not have to be this way for dentists who plan ahead. When a suitable buyer is found, years before the practice starts to teeter into a traditional retirement cycle (as described above), a number of inherent benefits are derived for both parties:
• The buyer receives a well maintained, robust practice on an escalating growth trajectory
• The seller receives full market value for his practice (as opposed to what would come with a dying practice)
• Patients in the practice get an opportunity to meet the new owner while still being cared for by the seller
• The seller has an opportunity to educate the new buyer about the strengths and weaknesses of the practice
• The seller can continue to work as little or as much as he or she wants, making time for hobbies and interests
Why run a dental practice — a significant retirement asset — into the ground without a good retirement plan in place? A dentist needs to put a plan in place. Studies show that those who do statistically reap as much as $500,000 more than they would otherwise.
Provided by Frank P. Costabilo, Jr. on behalf of AFTCO Premium Transitions