Upgrade the Office Space

When patients come to your office, the atmosphere should be welcoming and receptive, but it is equally important to showcase your professionalism to a potential buyer. While it may not be necessary to buy new equipment, maintenance and repairs should be performed. It is also wise to declutter the office, replace worn furniture, and clean up the facility.

Maintain Production

The number of patients your practice serves is the key data point for buyers because steady production is a leading indicator of your practice’s viability. In the contemporary marketplace, attracting new patients requires having a state-of-the-art website and asking existing patients to complete online reviews.

If you plan on selling your dental practice, it is crucial to maintain your production levels. By slowing down or referring patients to other providers, you will likely see lower profits and a decline in the value of your dental practice.

Adjust Fees

Generally, a dental practice’s fees should be evaluated and adjusted on an annual basis based on the market value in your region. If you have not adjusted your fees for more than 1 year, do so before you market your practice.

Business Management

When selling a dental practice, you will likely be asked to provide prospective buyers with financial information, including:

• Financial statements
• Accounts receivable reports
• Production reports

In short, you must be able to show that your practice is well managed and profitable.

Consult with a Professional Team

Given the various factors involved in selling a dental practice, it is wise to work with an experienced professionals who can:

• Value your practice realistically (accountant or broker)
• Promote the sale of your practice (broker)
• Work to locate a buyer
• Negotiate transaction terms (accountant, attorney and/or broker)
• Prepare or review legal documents (e.g. letter of intent, confidentiality agreement, purchase agreement, noncompete agreement) (attorney)
• Assist with tax planning (accountant)

Ultimately, your the team that you have should work for you and answer any questions that you may have. Having an attorney experienced with dental sales will be important.

The Takeaway

Selling a dental practice requires careful consideration and it is essential to be prepared. By taking the above-mentioned steps and working with an experienced dental attorney, your chances of a smooth and successful transition increase.

The post Preparing To Sell Your Dental Practice appeared first on The LaMaster Law Firm, PLLC..

There’s a good chance that if you work with animals as a veterinarian, that you enjoy what you do. Animals are unconditionally loving, they don’t talk back, and won’t ask you for money. But what happens when you get to a point where you are ready to sell your veterinary practice? It can be difficult to know where to start. Here are some important steps and options for selling your veterinary practice.

Make the Decision to Sell the Practice

Hands down, the most difficult decision that you must make of all the decisions you will need to face, is the decision as to whether or not you want to sell your practice in the first place. Regardless of whether you are at that point yet or not, there will come a time when you are ready to sell, making planning one of your most important tools.

The reasons most practitioners give for leaving their practice are:

• Change in Career due to the frustrations that come along with managing a practice (43%)

• Retirement (33%)

• Personal Reasons (24%)

Another important aspect of planning the sale of your veterinary practice is the focus on both short- and long-term goals. It is important to know what you would like to do next, and whether or not you have adequate finances to comfortably support yourself going forward.

Decide to Whom You Would Like to Sell the Practice

Today, practice value is based upon profitability. You should be sure to evaluate your practice every 3-5 years. This can also help to regularly identify areas of the practice that require more attention.

Short of the decision to sell the practice in the first place, the decision as to whom you should sell it to is most difficult. It is such a difficult decision to make because you have many options:

1. Close the Practice for Good

Though usually a non-issue for larger veterinary offices, small and/or poor offices sometimes have no value and it makes the most sense financially to “call it a day” and simply close down the practice.

2. Stay the Course

If you are not yet ready to sell, and you continue to conduct the regular activities of your practice, it may be in your best interest to invest in the maintenance and improvement of the facility so that when you are ready to sell, the property will be in good shape. This may include everything from making sure that the paint on the walls is not chipped, to replacing old and outdated equipment. It may also make it a nicer environment to work in for the duration that you remain there.

3. Sell Your Share to Partners

If you are looking to get out of the business, selling your share to your partner(s) may prove to be a smart decision. However, if you began at the same or similar time as your partner(s), there is a good possibility that they may not be interested because they too are looking to get out of the business.

4. Merge

For smaller veterinary practices, this is often a really smart decision. Not only can it save money and improve profitability, it can also improve the quality of practice life by maximizing equipment and staff.

5. Sell to Corporate

Again, this is a very viable option for smaller practices. However, often times a corporation will want the owner of the practice to stay on for another year or two. Many owners have a difficult time relinquishing power and becoming someone else’s employee/

6. Sell to an Associate

If your partner(s) are working within the same or similar time frame as you, and are also looking to soon bow out, a good alternative may be to sell the practice to an internal associate. Since both parties know one another, the risk to the seller is low and the benefit to the buyer is high.

7. Sell to Someone Who is Not a Doctor of Veterinary Medicine

Though this may not be a first thought for many, sometimes it may be the right situation to sell the practice to someone else besides a Doctor of Veterinary Medicine. However, while some states allow for this, others do not. Dependent upon your state’s statute, if you are interested in selling to a qualified entrepreneur, it would be smart to first speak with an attorney.

8. Sell on the Open Market

By far the most common method for selling a small practice, if you wish to sell on the open market, you can work with brokers who can help you to not only locate buyers, but can also help with the other aspects of the sale (finances, contracts/negotiations, etc.)

Decide Whether You Would Like to Sell or Hold the Real Estate

What some may not realize is that the business’s real estate does not automatically come with the purchase of a practice. Owners are able to decide whether they would like to sell the property along with the business, or if they would rather retain it. Though owners are usually advised to hold onto the property and sell the practice first, there are various reasons to choose either method:

1. Rental Income

If an owner decides to hold on to the real estate, for the time being, he or she can rent it out to someone else. Alternately, if someone is looking to make extra money on real estate, there are likely better options for return than a specialized facility, since the market for veterinary offices would be much smaller.

2. A Growing Investment

Though real estate generally appreciates over time, for more specialized facilities it does so at a much slower rate. This is why it may be beneficial to sell the property along with the business. By using a 1031 Exchange, the property can be sold and taxes can be deferred if the seller reinvests his or her gains back into real estate (so long as there is no gain or loss with the transaction). Because this can get a bit technical, it is best to consult with an accountant and/or tax attorney to ensure that you have a proper understanding and proceed properly.

3. More Attractive to Buyers

A benefit of selling only the practice first, is that it often makes the sale much more affordable for the buyer. However, the seller runs the risk that if the buyer defaults, the real estate may become more difficult to sell, as it is such a specialized property and will likely need to be sold for the same business purpose (a veterinary office). Additionally, buyers usually want to purchase both the practice and the property together at the same time. Selling both together may expand what has become a smaller market of potential buyers.

Remember that because there are so many options, it may be best to speak with an attorney in order to make the best decision for you and your practice. More information and understanding breeds better planning and will have a great impact on your experience. To learn more about the sale of your practice, call the LaMaster Law Firm at 269-760-1499 today!

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