Preparing To Sell Your Dental Practice

 
Selling what you have worked your whole life to create is a big task, and at Menlo we do our best to make it as simple and seamless as possible. If you are thinking about putting your practice on the market in the next few years, follow these steps now to prepare for maximum results. 
  • Do not incur any new debt. A practice’s value comes largely from cash flow and patient loyalty, not equipment. There are a few exceptions to this rule, like a digital conversion, but before incurring debt, talk to a dental advisor. At Menlo we are always happy to help answer your questions.10%
  • Do objectively evaluate your staff. Tenure is seen as highly valuable when selling a practice, so continue to take good care of your employees. If you have a spouse or other family members who work there, consider phasing them out in order to have a fully functioning team trained up before your departure. New buyers rarely want family members of the former dentist as employees.20%
  • Do review your last tax return. Clean up all discretionary spending (Costco bills, family cell phone plans, Country Club memberships, home remodels). Most lenders and banks won’t add those expenses back in when determining practice cash flow and lendability. Be sure to report all your collections.30%
  • Do not postpone treatment plans, even implants or Invisalign. This is well meaning but buyers don’t care nearly as much about what is in the treatment plan file as what the collections have been.40%
  • Do not cancel participation in any PPO plans. This can result in decreased new patient flow and can be seen as a negative.50%
  • Do make sure your Dentrix Collections=tax return=bank deposit. Make sure these annual figures are generally reconciled each year. These amounts are not expected to be perfectly reconciled, but they should be in the same range.60%
  • Do consider an office makeover. Just like prepping a home for sale, a fresh coat of paint and new carpet will give your office a fresh and clean feel, which is more attractive to buyers. Wear and tear on an office can be seen as evidence of a carelessly run practice.70%
  • Do clean up your patient accounts and credits. Ballooning A/R can indicate to a buyer that your patients have bad payment habits, your staff isn’t performing, and you don’t have good systems in place.80%
  • Don’t coast to the finish line. The time before the sale of a practice is crucial. Do not take excessive vacations or cut down work days or hours. This will lead to lower collections and reflect poorly on your bottom line. No matter what the reason is, lenders will not ‘pro forma’ your collections.90%
  • Do figure out associate contracts. It is essential to have a legal non-compete and non-solicitation agreement with your associates in place before the practice is put on the market.100%