If you’re considering selling your orthodontic practice, it’s important to thoughtfully prepare and plan for the process. Before listing your practice for sale, consult with your accountant to understand the tax implications, obtain a comprehensive practice evaluation, maintain the value of your practice, and plan for your eventual exit. By taking these steps, you can ensure a successful transition and maximize the value of your practice. In this article, we’ll explore each of these factors in more detail to help you navigate the process with confidence.
This is the first step when preparing to sell your practice. It’s important to find out if you can afford to sell before you list your orthodontic office for sale. You might feel like you are ready in some capacity to sell your practice, but after sitting with a financial advisor, you could discover that you are financially unable to do so. Dental school loans or other financial factors may still require that you work for another few years.
This is another important step before you list your orthodontic office for sale. Depending on your company structure, there will be different tax consequences to selling your practice. For instance, if you are a “C” corporation, you will need to address certain issues before the sale. It’s important to figure out how to allocate goodwill between the corporation and yourself.
If you are selling through a broker, you should retain one who can prepare a certified evaluation of your practice. The majority of brokers who offer this service will provide valuations if it does not interfere with their sales commission. You must be skeptical of “FREE” practice valuations. This might not serve your best interests. A certified, formal valuation takes into account everything, including location, equipment, and other items.
Lack of focus can cause the value of your practice to decline. For instance, you can stop training your staff and investing in updated technologies because you know you want to sell soon. You should not do this as it will affect the value of your practice. Your practice should be kept in tip-top shape.
Before you sell your practice, you should plan for your potential exit. If you are selling your practice to a DSO, you should look into whether there are penalties associated with leaving before the earn-out period and other related factors. You should also look into whether they will allow you to stick around after your earn-out period?
These are some things to consider before your list your orthodontic office for sale. If you need help selling your practice, get in touch with us today.
