Are you ready to retire?
We all dream of living out our golden years as the captain of our own ship – free from the stress and frustration of managing a successful dental practice, and finally able to pursue our other passions. After decades of toil and service to the medical community, you deserve it.
Unfortunately, most dentists are woefully unprepared for the realities of navigating their retirement transition – and it is easy to understand why. For the last couple of decades you have been preoccupied running your own business, while also providing essential health care services to patients who have practically grown into your closest friends and family. No one wants to think of the day that – for better or worse – it all comes to an end.
If you are like most healthcare professionals, you probably never even considered the idea of retirement until that one day you leaned over the dental chair and heard a few telling “pops” coming from your spine.
But, that’s okay!
If you are reading this article you are already on your way to executing a successful retirement transition as a dentist. You have proven that you have the will to gracefully “bow-out” of providing dental services – all you need now is for someone to help show you the way.
What is the right age to retire from your dental practice?
Most people fail to understand how physically demanding it is to be a dentist. The constant bending over, sitting down, standing up, cleaning, polishing, drilling – it takes a toll after 30 or 40 years!
Don’t forget to factor-in the stress of being in business for yourself in a field that can often be rather thankless. I mean, how many more articles must you read where people confess to being more afraid of the dentist chair than the grave?
The harsh reality of the dental field is that you cannot do it forever, even if you want to. Your body and/or mind simply won’t allow it. So, what is the right age to retire?
Most people want to be retired by their early-to-mid 60’s, and it’s no different in dentistry. However, the desire to retire is much less important than having the ability to follow through with it. That is why it is of the utmost importance to begin planning your exit strategy in your 40’s and 50’s.
Every day after your 60th birthday is practically a count-down until your back begins to falter, your knees become stiff, and the dreaded arthritis causes your skilled hands to swell and shake.
You neither have to burn out, nor fade away. By planning your exit strategy now, you can rest easy knowing that you can step away from your practice – still seemingly at the top of your game without having to deal with the inevitable ravages of time (at least not publicly).
How to handle your dental transition
Fortunately there are many options available for dentists on the verge of retirement. It doesn’t matter if you own and operate your own practice, work with a group of partners/associates, or are a member of a corporate group.
Of course, everything relies on your ability to plan ahead – so here are some quick thoughts about your options …
Sole Practice Owner
As the owner of a sole practice, you have the most “elbow room” to manoeuvre in regards to your retirement transition.
The most (financially) beneficial arrangement favoured by most dentists is a flat out sale of their practice to a corporate group – a transaction with which we are very familiar.However, another route might be for you to take on an associate dentist. After spending some time mentoring the new associate dentist, and training them on how to care for your patients, they should be able to buy you out of your own practice. Yet, this method does require a considerable amount of time and effort if you do not choose your associate wisely. For more information on choosing an associate – with retirement as your final goal – contact Samera Business Advisors.
Transitioning management of your dental practice from you to your partners can be a mutually beneficial option for larger practices.
Through an equity buy-in, buy-out, contract you can arrange the “sale” of your practice, decades before you even need to. This saves you from dealing with a lot of stress and frustration further down the road. It should be noted though that transactions between people who have known / worked with each other for years can sometimes get complicated. If you wish to preserve the relationship you once had with your partners – and still get the best money for your practice – we highly recommend contacting a qualified Dental Practice Broker like Samera Business Advisors.
If you are already a member of a corporate dental group, your transition should be fairly straightforward. Meaning – it should already be more or less spelled out within the terms of your contract with the organization.
Yet, sometimes it is difficult to negotiate the final offer on your share of the practice. We here at Samera Business Advisors can help to mediate the transition, ensuring that you are paid what you are worth.
Letting your partners and employees know about your retirement
Informing your staff – or partners – about your imminent departure from the business is the most uncomfortable aspect of selling your dental practice. These people may have been with you since the beginning of your career. They have watched your skills develop and your business grow – and they have reaped the rewards along the way. Telling them that you will no longer be around to help or give advice could be a terrifying concept for them. Therefore, there is no easy way to go about it.
We recommend that you approach the subject with compassion and tact. Choose the right time to let people know about your retirement – do not do it when office stress is already high. Let them know what your plan is, and your timeframe. Take the time to talk with them privately about what their options are moving forward.
If you are concerned about how your staff will take the news, there are ways that you can make them feel involved in the process. For instance, there are some transactions where you can include terms that require the future-buyer of your practice to develop the original staff. Of course that is not always the case, and if you want terms such as those included in the sale of your dental practice, you should consult with a qualified Dental Practice Broker like Samera Business Advisors.
Letting your patients know about your retirement
Similar to informing your staff/partners, telling your patients about your retirement can be incredibly stressful.
We recommend sending a personalized letter to your current patients – thanking them for their years of support and friendship. In the letter, you should comfort them by explaining what your transition means for them.
- Do they need to find a new dentist?
- Will a new dentist be provided for them?
- Can you give them a referral to another qualified dentist in the area?
These are just some of the questions that will immediately come to their minds, so make sure to answer them in as much detail as possible – before they have to ask.
However, do not inform your patients of your transition until after it is fully planned, with a buyer already secured and an exit strategy in place. You do not want them to feel as though you are leaving them “high and dry” with no support for their healthcare needs.
Putting your dental practice up for sale
Although the specifics of your individual dental practice sale will be unique, there are a few “tried and true” things that every dentist should do when preparing to sell their practice to fuel their retirement goals.
The main objectives for preparing the sale of your dental practice is to build as much value as you can, and ensuring a smooth transition from you to the new owner.
Build your practices value
Many dentists think that the only way to build the value of their practice is by having as many active patients as possible. While that is certainly a big element to making your office look appealing to another buyer – it is not the only consideration.
You must take into account the kind of work that will be required by the new owner. Do you have fewer patients, but perform higher-value cosmetic treatments which prop-up your sales figures? That could be an interesting selling-point for “concierge style” dentists who prefer quality over sheer patient-volume.
You must understand what makes YOUR business model appealing, and then bolster that marketing perspective. In order to do this, we recommend receiving an in depth practice valuation, so you can understand more about your own business … What works, why it works, and who would be interested in taking the reins of a practice such as yours.
Build an active patient list
It practically goes without saying that – when preparing to sell your practice – you should be actively building your book of business. No one wants to buy a dental practice to just sit on their hands all day, hoping that a patient will eventually come in for a routine cleaning.
Try to fill in as many gaps in your daily appointment schedule as possible and keep it consistent. Make the potential buyer of your practice feel as though they are buying a “turn-key” business.
The goal is to make them feel confident that the day they sign the purchase agreement, they will have a steady source of income.
Streamline your Accounting
When a buyer expresses interest in your practice, you should be able to show them exactly where all of the money is coming from, and going. Every pound must be accounted for, and irregularities must be minimized at every opportunity.
Although “cleaning up your accounting” is important for the buyer, it is absolutely crucial for whatever lender is providing the buyer with their funds. If your books are not in order, the lender may put a stop to the sale – even if the buyer is still 100% on board.
Choose Samera for Retirement and Transition Planning
You have so much to look forward to as a retired dentist. It is our goal to help you to achieve your financial goals, while safely managing your legacy (your practice). If you are even entertaining the thought of retirement, contact a representative of Samera Business Advisors by contacting us or booking a free consultation.
Further Information on Starting a Dental Practice
We’ve been helping the UK’s dentists start their own practices for nearly 20 years and we know exactly what it takes to make your practice a success! For all the advice, support and expertise you’ll ever need, contact us today to find out more about starting a dental practice with Samera.