How often do you think about what your San Antonio dental practice is worth? Most dentists only consider the value of their practice when they buy it and when they sell it. In between these milestones they focus on providing care for their patients and supporting their employees. As a small business owner it is vital to focus on the day to day aspects of running a business, but too often dentists realize too late they could have been taking steps throughout their career to build value. Only when retirement is on the horizon and they start to think about selling a dental practice do they realize they should’ve started planning earlier. Fortunately, the dental transition experts at DDSmatch Southwest are here to help you prepare and prioritize for your future, even if you’re not planning to sell your practice anytime soon. Read below to learn our best tips for planning for your future.
Changing With Your Community
Most dentists stay in one office space for their entire career. Moving locations is expensive and not usually worth it unless there are extenuating circumstances. That means you will spend 30+ years in one neighborhood and community, watching it grow and change with time. The challenge now becomes adapting to your community’s demands.
For example, if you started your practice in a San Antonio neighborhood with young families, you built your practice around serving those families. You bought equipment and designed your marketing to meet the needs of that demographic. Now, 30 years later your neighborhood has changed and you find yourself serving an older population. If you don’t change your practice’s operations to reflect this, you will lose business. Selling a dental practice becomes much more difficult when you are not in tune with your community. Your buyer will have to come in and adapt quickly if they want to keep their new practice afloat, and most buyers aren’t willing to do that. At the very least, your practice will lose value because your buyer sees how much work and money they will have to pour into the practice immediately.
Adapting to your community isn’t difficult, time consuming, or expensive if done properly and over time. In fact, you are probably already doing this in some small ways. But it is worth paying attention to your patient’s needs. Instead of repeatedly referring patients to an outside office, consider buying the equipment, or getting the training you need to serve your patients in-house. Not only will you add value through increased production and collections, you will see better patient retention. Small, incremental changes like this will help you increase your practice’s value in the long run.
Tangible and Intangible Assets When Selling a Dental Practice
You have probably heard of the two types of assets that make up your San Antonio practice’s value. Tangible assets, like the equipment you use every day, and intangible assets, like the goodwill you have in your community. Both of these asset types need to be strong for a successful business, and eventually a successful sale.
When you have practiced dentistry for 30 years or more you can get used to things being a certain way, whether it is your cracking dental chairs or the clunky software you use to bill patients and insurance companies. These tangible assets will be passed to the next owner, and many times is not worth updating right before listing the practice. However, throughout your career, you should keep an eye on these assets. Is the carpet in your office worn and stained? Are your employees waiting several minutes for their computers to start up in the morning? Keeping your equipment up to date will make a difference when you are selling a dental practice in San Antonio.
The unique business practices you have cultivated over your career are what make your practice “yours.” Often they are the reason patients keep returning. The goodwill and trustworthiness you have with your community and staff members are intangible assets that add to the value of your practice. These factors are not things you can add to your practice at the end of your career, like updating your x-ray machine. A solid patient base doesn’t just spring up overnight, it is developed and fostered over a long time. Long-term, knowledgeable employees are also a sign of a well-run, high-value, practice. If you don’t have these intangible assets your buyer will have to build them after the transition, at which point it might make more sense for them to simply start up a practice from scratch. Start building up your intangible assets as soon as you start practicing dentistry so you can get the most out of your practice when you sell.
Write Your Handbook Before Selling a Dental Practice
One of the intangible assets your practice holds is its policies and procedures, some written and others unwritten. For example, maybe your front desk staff collects insurance co-pays and deductibles at the time of service rather than billing the patient for them later. This ensures cash flow and protects from patients falling into collections. While you may not have a written policy outlining this task, your staff and patients have come to understand it is the way your office works.
Take some time to think and talk to your staff about these unwritten office policies, there are probably more of them than you think. From billing policies to how you remind patients about their appointments, these rote tasks are worth taking note of. Write down these “unofficial” policies so every new employee, and your eventual buyer, will know how to operate your practice and maintain its unique environment. With a solid handbook in place your employees and buyer will have confidence moving forward after you retire.
Beware the Technology Trap Before Selling a Dental Practice
One of the traps many dentists fall into as they prepare to retire and sell their practices is investing in depreciating assets too close to their sale. It is easy to put a dollar amount on technology, such as your billing software or other equipment, and think you have added that exact amount to the value of your practice. However, these assets depreciate, so even if you spend $20,000 on the latest technology you may not see your practice’s value increase by $20,000. If you are within five years of retirement, large purchases typically will not result in a 1:1 return on investment.
Of course, there are always exceptions to this rule. For example, if you have not switched to digital imaging technology you should consider upgrading before you list your practice. Most newer dentists are not trained on older systems, which makes your practice less marketable. This is one example why it is essential to work with experienced dental transition specialists like DDSmatch Southwest. Our experts will help you determine whether a certain investment is worthwhile right before selling a dental practice in San Antonio.
Along with overvaluing certain tangible assets, dentists tend to undervalue intangible assets. They pour time, money, and energy into building up their tangible assets, but ignore what makes their practice unique. Pay attention to your employees and patients needs, and recognize the role intangible assets take in making your practice successful.
Find Your Niche In San Antonio
Every dental practice has something special that makes it unique. When you pay attention to your employees needs, adapt to your changing patient base, and build your tangible and intangible assets, you will learn what makes your practice work well. In other words, you will find your niche in the San Antonio market.
Why is it important to know this? When it comes time to sell your practice the right buyer will be one who fits into this niche, continuing your legacy. At DDSmatch Southwest we work hard to match the right buyer with the right seller. This is because, just like our clients, we care about what happens after you finish selling a dental practice. Our transition experts will help you identify the aspects that make your practice run smoothly, and find a buyer who is looking for a practice like yours.
Don’t Wait Until It’s Too Late: Utilize the Practice Optimizer Experience
The earlier you start thinking about building value in your practice and creating a legacy, the smoother your transition will be. That is why we created the Practice Optimizer Experience. If you are within 10 years of retirement you need to start taking steps to prepare your practice and prioritize your future. Our transition experts will help you take care of every detail leading up to your sale, so you can retire on your own terms. Here is what to expect from the Practice Optimizer Experience:
- Conceptual Transition Experience: Our experts will help you visualize your ideal transition and give you realistic expectations about selling a dental practice in San Antonio. This step leads to concrete strategies that will carry you forward through the end of your transition time.
- Trusted Valuation Analysis: In order to get the most out of your practice you need to know what it is worth now. We arrange for a trusted third party valuation before you start the process to give you insight now, and another before you sell to give your buyer confidence.
- Ideal Retirement Calculation: How much do you need to make on your sale to retire with the lifestyle you envision? We make sure you are prepared by reviewing all of your investments, giving you a full picture of where you stand.
- Estate Preparedness Gameplan: What will happen to your estate when you are gone? Getting legal documents in place will give you and your loved ones added peace of mind as you move forward toward retirement.
- Dental Insurance Navigator: Negotiating with insurance companies is a vital part of running a successful dental practice. Oftentimes, our clients find they can increase revenue before selling a dental practice through negotiation with their current accepted plans.
- Clinical Opportunity Blueprint: Whether you know about it or not, your San Antonio dental practice has untapped potential. Using Dr. Charles Blair’s “Practice Booster Clinical Treatment Analyzer,” we identify areas of growth you can utilize to build value.
- Critical Metrics Analysis: Your dental practice is not static, especially while you are working hard to build value and prepare it for a sale. We send regular reports on your practice to ensure you are on the right track to meet your goals.
- The Trusted Transition Process: When you’re ready to start your dental practice transition our experts are ready to help with a clear roadmap to success. We value transparency and clear communication, so you’re never in the dark about what is happening.
Selling your practice without the Practice Optimizer Experience isn’t impossible, but we have found that dentists who work with our system are more confident about their transition into retirement. The Practice Optimizer Experience not only ensures you are getting what your practice is truly worth when you sell, it prepares you for every aspect of retirement. You can have more confidence selling a dental practice when you are certain your patients, employees, finances, family, and the legacy you worked so hard to build, will be taken care of after you leave.
Contact DDSmatch Southwest Today
Whether you implement the above suggestions early in your career, or right before you retire, you deserve to reap the benefits of the years of work you poured into your practice. Don’t leave money on the table simply because you don’t understand the process. Our transition team is made up of professionals with extensive experience in the San Antonio market. When you’re ready to start thinking about your future practice transition contact our office for a free, no-obligation consultation.
Remember, the earlier you start thinking about retirement, the more successful your transition will be. We will help you prioritize and prepare for your future so you can retire with confidence. To contact our office today simply call 855-546-0044 visit our contact page.