Are you starting to think about winding down your career, but not quite sure how to prepare? There is a lot to think about before your last day, especially if you own a practice. If you have a few years until retirement, start taking steps now to ease the transition when the time comes.
Get your finances in order
Retirement marks a new stage, one in which you begin living on savings rather than income. Your financial planner can help you build a plan that will invest your savings wisely for the long run, and he or she can also help you manage the proceeds from a practice sale. You will need to determine how to maintain health insurance, especially if you retire before Medicare eligibility.
Your practice’s finances also need to be in tip-top shape before sale. A practice with strong collections and less bad debt may fetch a higher price. Buyers also want an updated fee schedule that is competitive with other practices in the area – so now is the time to consider making adjustments. Refer to the ADA Center for Professional Success Survey of Dental Fees for the latest data.
Polish your practice
Selling a practice is a lot like selling a house: curb appeal matters. Many of the changes that will appeal to buyers are cosmetic and make a big impact with relatively low cost. Look around your practice with a critical eye, or bring in a trusted friend. If the practice appears “outdated,” the price may be affected. Could the walls use a fresh coat of paint? Are the furnishings outdated? Maybe the chairs need to be recovered. You may not necessarily need to invest in new equipment.
And look for clutter. Do you have outdated equipment tucked in a store room or empty office, or maybe stacks of old journals? Clear them out.
Think about your ideal retirement transition
How do you want to transition into retirement? Some people gradually reduce their hours as a new partner or associate picks up more hours, which can help keep production (and your practice’s value) high. Others work full time until their very last day. Talk with your family to discuss might be right for you. Identifying your best case scenario will help you plan and find a buyer who shares the same vision.
Some retiring dentists sell to a long-time partner, while others look for a partner a couple years before retirement with the intention of transitioning ownership. Other dentists look for a buyer who will buy the entire practice, whether phased or all at once. Alternatively, some dentists prefer to just close their practices entirely at retirement, requiring a completely different set of actions.
Also begin planning what you will do in retirement. You might want to travel, volunteer for a cause, spend more time with family – you have plenty of options. Planning ahead now can open doors later.
Get the support you need
Even if you think you may be years from retirement, planning ahead will pay off. A sudden injury or illness within your family can quickly change even the best-laid plans. When you are ready to consider bringing someone into your practice, ADA Practice Transitions can help you think about the next steps and find the person who fits the needs of your practice.
When you work with ADA Practice Transitions, you will be assigned a dedicated advisor who can answer questions, offer guidance, and share resources. You will get worksheets, practical guides, and assessments that help you think things through. Your advisor can help you find a dentist who shares your philosophy of care and prepare your practice for sale while easing the transition for your staff and patients.
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