If you are still in good health but are not sure if you are in a good financial position to be able to live comfortably the rest of your life without working, we recommend you speak with your financial planner. They can analyze your situation and see how much more you may need to work. Or, if you can sell your practice, put the money into a retirement account and work at a practice and continue to make an income while harvesting the equity you have in your practice. This is one of our favorite transition strategies. It’s like selling your house, but you get to continue to live in it. Just because you sell your practice does not mean you need to stop working or retire. You can still work clinically if you still enjoy dentistry but don’t enjoy the management or dealing with insurance companies continuing to lower reimbursements.
Another time to consider selling is when your practice is continuing to go down in collections or net income. We have numerous examples of when a doctor could have sold two or three years prior and made another $200,000, $300,000, or even $400,000 more if they would have sold at the height of their practice production. Instead, they watch the production numbers and patients go down year after year after year. Even though the owners knew they were getting tired, referring more work out, or simply seeing fewer patients, they continued to hold onto their practice thinking they can sell it based on what the numbers were at the height of production.
The worst time to sell is when you have to sell, say when you or a family member have failed health, or you suddenly pass away. In this scenario, you or your family are left trying to quickly get the practice sold before all of the patients leave and there’s a skeleton of a practice left to sell. That can be a devastating situation, especially when the funds from the sale of the practice were counted on as a source of future retirement income. At a minimum, you should keep an emergency contact list for your family in your office that includes your attorney, accountant, practice broker, supply company, etc., that can alleviate some of the burdens on your family.
Whether you are 20 years from retirement or 2 years from retirement, you should be always be prepared and have an exit plan. We are always available at no charge for either a phone call or a meeting over a cup of coffee to help you put together that plan.