Options for Selling Your Dental Practice
Today there are a variety of options when it comes to selling your practice, and Menlo can help you decide which one is right for you. Call us today for a no cost, no obligation consultation.
Sell and Walk Away
This is the most common dental transaction on the market today. It is a short term transition that usually only lasts a couple of months. All the money is received upfront at the time of closing, and there is a clean break from the practice. This type of sale works best for the dentist who is ready for full retirement and likes to minimize risk. This sale would not work for a dentist who wants to phase out gradually or continue to work part time.
Associate Buy In
This used to be the most common transaction but has been replaced in recent years. In this option, the dentist hires an associate with plans to turn the practice over to him or her after an agreed upon amount of time. It is a gradual transition of ownership, but all money is received in future years. This option does come with risk since there is rarely a formal agreement, and an associate could choose to leave or go a different direction at any time. However, this type of sale does work well for dentists who are especially attached to their patients, office or community and want to cut back on hours but still have control of the practice until retirement.
Sell and Work Back
In this option, the practice owner sells the practice in full, with all money provided at closing but continues to work for an agreed upon salary and amount of hours, sometimes for years after the transition. The dentist slowly phases out of the practice instead of having a clean break. This works best for dentists who are attached to their patients, who love the clinical side, or who are not ready for full retirement but would like to scale back at the top of their game. It allows dentists to continue to practice without having any management, financial or non-clinical responsibility. This does not work well for someone who wants to remain in control as all the business decisions will be made by the new owner.
Group or DSO Sell
This is a newer option but one that also works well for some dentists. In this type of transaction, the dentist sells to a group or a DSO. A large percentage of the sale price is paid upfront but the rest is paid out at a later date in cash or stock options and always requires the dentist to stay in a clinical role for an agreed upon amount of time, typically 2 to 5 years. This works great for dentists who want to scale back hours or ease into partial retirement before fully exiting the industry or for those who are tired of the business side of dentistry. At times, this can be a more lucrative option, especially for bigger practices. This does not work well for those who like to be in control, who want a quick exit or who need all their money up front. 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.