Selling Your Dental Practice? Consider These 4 Options

You’ve put a lot of time and cash into building a successful dental practice, making it hard to navigate the difficult decisions when you are ready to sell. What is the best way to move forward so you can have a seamless transition and optimize your profit from the transaction?

Before you jump to conclusions and sell to the first interested buyer, there are several options you need to consider. Here are a few solutions that might be right for you:

Sell the Practice, Then Walk Away

The most common method for selling a dental practice is to find a buyer, complete the transaction, then move on in a short time period. This method usually only takes a few months from start-to-finish.

When the business sale closes, it means that you will receive all of the cash up-front. The benefit of selling and walking away is that you can have a clean break to move onto your next chapter in life.

This strategy for selling a dental practice is most effective for a dentist who wants to minimize risk and is ready to move into retirement. If you are interested in a gradual transition out of the practice, continue reading to learn about other options.

Sell and Work as an Employee

Just because you have a closing date on the sale of the practice doesn’t mean that you will no longer be involved in the day-to-day business. Through this method of selling a dental practice, you hand over ownership in full and receive the total payment upfront.

After the sale is finished, you continue working an agreed number of hours as an employee of the practice. Some dentists continue in this arrangement for several years until they are ready for retirement.

This method is recommended if you prefer to phase out of the practice. It’s beneficial for dentists who want to continue practicing without the responsibility of management and business ownership.

Associate Buy-In

This method of selling a dental practice is gaining in popularity. Through an associate buy-in, you hire a third-party expert to handle the details of the sale. In this agreement, you will turn over the practice after a pre-determined amount of time, usually with a gradual ownership transition.

An associate buy-in can be risky because, most of the time, it happens without a formal agreement. You will receive the money in the future, which means there is the possibility that an interested associate could choose to go in a different direction.

If you want to maintain control of the practice, continue working part-time hours, and have a plan to phase out until retirement, then an associate buy-in might be the right solution for you.

DSO or Group Sell

The final option to consider is a newer possibility in the dental industry. Instead of selling the practice to a private buyer, the business is bought by a group or Dental Support Organization (DSO). You’ll receive a large amount of the money upfront, with the rest paying out in stock options or cash in the future.

Typically, dentists need to continue working in the practice for 2 – 5 years after the sale. This method is excellent for dentists who want to transition into retirement slowly.

Support When Selling a Dental Practice

If you are ready to sell your dental practice, then our team at JRA is here to help. Contact us to learn more about available services.

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