Options for Selling Your Dental Practice
You have many options when it comes to selling your practice, and Menlo can help you decide which one is right for you. Call us today at 480-290-7720 for a no cost, no obligation consultation.
Sell and Walk Away
Selling and walking away is the most common dental transaction on the market today. This option is a short-term transition that usually lasts only a few months. All the money is received upfront at the time of closing, giving the selling dentist a clean break from the practice. This type of sale works best for dentists who are ready for full retirement and like to minimize risk. This sale would not work for dentists who want to phase out gradually or continue to work part-time.
An associate buy-in used to be the most common transaction type but has been replaced in recent years. In this option, the dentist hires an associate with plans to turn the practice over to the associate after an agreed upon amount of time. The transition of ownership is gradual with all money received in future years. This option does come with risk since dentists rarely sign a formal agreement, leaving the associate free to go a different direction at any time. This type of sale works well for dentists who are especially attached to their patients, office or community and want to cut back on hours but retain control of the practice until retirement.
Sell and Work Back
In this option, the dentist sells the practice in full, receiving all money at closing, and continues to work for an agreed upon salary and number of hours. The dentist slowly phases out of the practice instead of having a clean break. This type of sale works best for dentists who are attached to their patients, love the clinical aspect of dentistry, or are not ready for full retirement but would like to scale back. Working back enables dentists to continue to provide patient care without worrying about management, financial or non-clinical responsibilities. This option does not work well for someone who wants to remain in control, as all business decisions will be made by the new owner.
Group or DSO Sell
This option is newer and works well for some dentists. In this type of transaction, the dentist sells to a group or a dental service organization (DSO).
A large percentage of the sale price is paid upfront with the rest paid out at a later date in cash or stock options. A group or DSO sale requires the dentist to stay in a clinical role for an agreed upon amount of time (typically two to five years). This option works great for dentists who want to scale back hours or ease into partial retirement before fully exiting the industry. Those who are tired of the business side of dentistry can also benefit from this type of sale. Some dentists, especially those with larger practices, may find this option to be the most lucrative. Dentists who want to remain in control, who want a quick exit or who need all their money up front should choose other options. Generally speaking, buyers in this category are looking for practices that collect a minimum of $800,000 per year and are willing to stay on as a key provider for several years.