As a dental practice owner, you’ve probably thought about establishing an exit strategy. You may have taken steps to get started. But uncertainty about things like potential tax law changes and capital gains impacts can complicate the planning process, making it hard to know which path to take.
It may seem counterintuitive, but today’s uncertain tax climate actually creates the perfect opportunity to put transition plans in motion. A good support partner like Heartland Dental can show you how acting now could put you ahead of potential negative tax implications and ensure you keep more of what you’ve spent a lifetime building.
As you think about planning your exit, here are a few simple but important things to keep in mind.
TIP #1: KNOW YOUR VALUE
Before selling or transitioning your practice, you need to know what your practice is worth – and understand how to maximize its value. Start by identifying and documenting your assets. Consider everything it takes to keep the lights on and everything it takes to maintain and grow the business. These elements set the foundation of your dollars and cents.
When it comes to maximizing your value, that’s where help comes in. The first place to start is talking to your tax advisors and legal counsel. In addition, a DSO partner like Heartland Dental can provide experienced affiliation guidance through the process. We analyze several hundred offices a year for potential affiliations and can help you maximize your overall value to create an optimal exit strategy.
TIP #2: UNDERSTAND YOUR OPTIONS
Selling your practice outright isn’t the only option. In fact, it may not be the best option, if you aren’t ready to stop working altogether. It’s important to explore alternatives, so you know all of your available options:
- Take on a partner: Forming a partnership can allow you to share some of the workload without giving up ownership or control of your practice. On the other hand, partnerships can mean losing some autonomy and could make transitions and sales difficult in the future.
- Share office space: Sharing space with another dentist can give you time to transition. You could transfer patients to the newer practice over time, and gradually reduce your workload until you retire. However, this option could also end up impacting your autonomy.
- Become an affiliate of a dental support organization (DSO): Affiliating with a DSO such as Heartland Dental can provide operational support for better work/life balance and create a level of income stability for you and your team as you move toward retirement. Consider that this option typically means committing to keep working for at least 2 years.
All of these options have their unique advantages and challenges. It’s important to research your options, and even talk through them with a transition specialist at Heartland Dental to help you determine which direction is best for you.
TIP #3: EMBRACE THE EMOTIONS
One aspect of transition planning that doesn’t get much attention is the emotional side of it. For many dental practice owners, the purpose of building a practice goes beyond simply running a business for yourself or practicing what you love. Along the way, you’ve created an experience that, for many, has become a “home away from home.”
Employees have become adopted family members. Patients have become friends. People have come to count on you to be there whenever they need you. Even customers who only come in for their 6-month cleanings expect to see you and interact with you. All of these people are an integral part of what you have built – and they can carry your legacy into the future when set up to do so.
That’s why it’s important to consider an affiliation with a DSO like Heartland Dental. We keep the team onboard throughout the transition, which benefits your entire team while maintaining the goodwill that’s been established with your patients.
TIP #4: BE TRANSPARENT WITH TIMING
It can take a long time to sell or transition your practice. Once you make your decision, it’s important to set clear expectations with your team, your customers, and your community about the timing of impending changes and what those changes mean to your team and to your patients.
Clear, timely communication will ensure that your team and your customers are aware of (and not surprised by) your decision. It will also make sure everyone knows that your strategy includes a plan to keep the business moving forward and keep everyone involved, even when you are no longer at the helm.
TIP #5: PARTNER, WITH PURPOSE
It’s OK to feel uncertain – transitioning your practice is a big decision with layers of complexity. But it’s a decision you don’t have to make alone. Understanding your own motivation, and realizing the benefits of good timing, will ensure that you find the transition option that’s really right for you – and for your legacy.
You don’t have to go through it alone. Find a partner who can help alleviate the burdens of planning. Whether you're looking to remain active or take a step back in your dental office, Heartland Dental’s support model can offer a personalized transition strategy that allows you to maintain your legacy and enjoy autonomy over your practice. You’ll get the support you need to handle day-to-day complexities, and operational support to unlock the value of your practice.
Ready to explore your options?
Give us a call at (866) 929-0040 or request an office assessment today.
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