With over 180,000 dental practices, the United States receives revenue of over $130 billion each year. In other words, an average but well-run dental practice can potentially make over $500,000 annually.
Lucrative right? However, people still feel the need to sell their practices. Others have not managed to reach such levels. Or, retirement is here, and you would love to sit and enjoy your sweat. Or, you want to switch careers. For others, it might be an opportunity for business growth.
Irrespective of the reasons, you have decided to sell your practice. Let’s look at some of the things you need to know before you sell your dental practice.
For most dentists, the dental practice is their primary source of income. As you are planning to sell the practice, there are some critical questions that you need to ask yourself, and they are:
If your practice is your primary source of income, then selling will mean that your steady monthly income will be affected. Are you really prepared for this reality?
Even though you are going to pursue other income-generating projects, you should ensure that your pension fund is fully-funded. A healthy fund will cushion you even if the new venture goes under or an emergency arises.
As a dentist, you spent at least eight years in school, and obviously, you have some years of experience. If you haven’t reached retirement age, has your passion run out? If you no longer find joy in dentistry, then selling your practice is a good idea.
But if it is burnout, then a sabbatical can solve the problem. You want to avoid a scenario where you have sold the practice, and your passion is still burning inside you.
Besides the above considerations, the value of your practice is at the heart of this transition. Regardless of your reasons for selling, there is an unchanging fact that you have to consider, business-wise: your selling price should always be higher than the purchase value.
If you also desire to get maximum profit, your best option is to sell it when it has the most value.
There are three different ways in which you can look at the actual value of your practice:
In case you are wondering what steps to follow to sell your practice, keep the following points in mind:
Transitions can be difficult, and without the proper guidance, the whole process can be a nightmare. If you need dental financing or need to sell your practice call AFTCO Southwest today, we can get you what you need.