Dentistry is going through a metamorphosis that includes more doctors than ever before being offered buyouts to sell their practices. Many of them are very confused about this decision because it can be difficult to understand appraisals, buyout offers, letters of intent and contracts that contain a lot of legalese.
Additionally, and perhaps most importantly, many of these offers are received by dentists who not are looking to sell their practice, leaving them unprepared to make a decision that could lead to a massive career and life change. Here are some factors to consider if you find yourself in the position of evaluating a transition.
Put aside your ego
When you are first approached with an opportunity to sell a practice at a reasonable or great price, ego tends to kick in. You are proud that someone recognizes the value you have built in your practice. And you should be. Assessing whether to sell your practice and achieve the maximum possible value will happen best when you don’t rely on emotion or ego, but instead focus on facts and figures.
More by Dr. Roger Levin
Never underestimate your hygienist
Trends and challenges that will reshape the dental profession and what you should be doing now
Drive away the fear
Some dentists suffer from FOMO (fear of missing out). They are afraid that if they don’t jump on the first selling opportunity placed in front of them, they will miss a big win later. They keep hearing how DSOs are growing and taking over dentistry. There is the fear of being left behind financially and not being able to compete successfully. In reality, there is no evidence that private practices are harmed by the current rate of expansion of DSOs and large groups. Both models of practice are viable. Don’t let fear or rumors coerce you into making a decision that you weren’t looking for, that you might not like, or that could completely change the trajectory of your career.
Hire an expert to determine if you are financially independent
The decision whether or not to sell a practice is different if you are financially independent than if you are not. Money gives you more choices and options, so determine your true personal financial situation before you start evaluating an offer. You will see the whole process differently if the outcome will not have a serious negative impact on your finances.
Assess the actual offer
Many dentists receive preliminary verbal offers that sound too good to be true, and many of them are. Ask for a written letter of intent that formally states the offer before spending a lot of time and money evaluating whether you want to sell. How much will you receive and on what schedule? How long will you have to stay and work as an employee? Can you be fired without cause? These questions and more should be clarified before you begin your formal assessment. If you like what you see, the next most important step is to hire a competent attorney who will protect you.
Ask yourself (and maybe your loved ones) if you’re ready to become an employee
If you are in your later years, this could be a great opportunity to sell the practice, get your asset value out of the practice, let others manage the practice, and have an easy transition into retirement or retirement. next chapter of your life. If you are younger and not yet financially independent, you will make a different type of career decision. When you sell, you will no longer be the owner, and changes are possible and even probable. You will be working for someone, perhaps for the first time in your life. Make sure you are comfortable with this reality.
Get multiple referrals
It’s a major decision. I’ve seen great offers backed by sincere contracts, and I’ve seen the exact opposite. I get too many phone calls from dentists asking me if they should sell their practice to a DSO or a large group. When they contacted most of them, they only received an informal type of verbal offer, no letter of intent, no contract and little information, especially on the fine print.
I can’t think of a single time I got a call like this where the dentist had spoken to other doctors in the organization to figure out what life would be like after a sale. It’s important to ask for a list of doctors in the organization, which is usually public information, and then randomly choose which ones to call to get a feel for their experiences and how you might fit into that organization. At this point, it’s no different than any employee looking for a job at any company. If you take the wrong job, you might suffer disappointment, unhappiness, and even lower earnings. Take the time to thoroughly research this major life decision.
So should you sell your practice? Maybe. There are several reputable organizations who will be interested in buying a good practice and many private dentists who are also interested in buying a practice. When you receive an offer, stop, breathe and think about my recommendations. With the right preparation and expertise guiding you, you’ll be in a good position to decide what you want for the rest of your career.
Editor’s note: This article originally appeared in the September 2022 print edition of Dental economy magazine. Dentists in North America can take advantage of a free print subscription. Register here.