The Newby, The Young Gun, The Rockstar & The Legend…Which One Are You?
By Jon Rutty, Practice Transition Specialist
Have you ever wondered what it will be like to transition your practice? No doubt you have heard stories from mentors or colleagues about the process and perhaps that is the reason you haven’t even thought about it or had the thought “I’ll cross that bridge when I get there.” But here’s a question, what if you’re on the bridge right now and you don’t even know it?
For over a decade I have helped doctors across the nation improve their practices. I have traveled to 41 states and met doctors with all sorts of ambitions, but in my humble opinion, the majority of them fell into one of two buckets.
- The doctors who waited too long to start thinking about their practice transition and who are now desperately trying to make something happen before they get too tired to continue, or worse lose their health; or
- The doctors who have not even begun to think about their practice transition but soon begin to realize, “If I don’t sell when I’m at a high, I may not be able to make the return on my investment like I want to”.
So how do you know when you should start to look. Here are some key factors that assisted my most successful clients in transitioning well.
- They started the process of inviting another provider in before they even thought of a transition. And because they did, they got to find the right person for the job. They weren’t desperate for someone to take over quickly or to fit a specific mold. They had agility because they had time on their side.
- They saved for their retirement early. While many of the doctors I worked with were running out of steam and low on money to support their retirement, the wisest doctors had been saving for years and were working with a professional to assure that they would not be solely dependent on their practice sale to fund their dreams.
- They had a clear vision for what they wanted. Some doctors I know don’t have a vision for their next steps and because of this they wait too long to begin the process of finding a suitable doctor to join them in transitioning. But when you have a vision behind your eyes, you can see how the work you put in now to make the practice desirable to potential buyers will pay off and you operate with clarity and on purpose instead of “one day.”
So where do you stand? Where are you on your transition timeline?
The Newby – I just bought a practice. I’m beginning to dream about my career and will dedicate time to building out my ideal retirement throughout the process.
The Young Gun – I’ve been practicing for 5-10 years now and have a nice sized practice. It may be time to start inviting another doctor in to have flexibility and perhaps find a future business partner.
The Rockstar – I’m at what could be the peak of my career. My use-before date is closer than my born-on date. I have thought a lot about when and how, but I’ve never taken any steps to discover more.
The Legend – I was booming just a few years ago, but I’m seeing some decline in my office and I’m tired of trying to find new ways to market myself. Add to that, a lot of my colleagues are retiring. It’s just a matter of time now.
No matter who you are in this scenario I can tell you that as a business owner, if you don’t seek out a highly skilled transition consultant, then you are either spending too much time trying to figure out what works, or you are likely depending on the experience of staff to help you grow your business. Omni has a long history of helping doctors with successful practice transitions. Newby, don’t wait too long to find one. Young Guns, same to you, but you are likely in a place where you need to start looking for a doctor to join your practice. Rockstars and Legends, it’s past time to talk with someone about your transition. Even if you are still 5-8 years away from taking the plunge, you owe it to yourself to talk with an experienced transition expert to discover the best options for you moving forward.
At Omni, we specialize in helping owners transition their practices into the hands of capable and competent private owners. We can arm you with a practice valuation so that you can see what your next step could be and for those of you reading this newsletter, we are happy to do that absolutely FREE. That’s a cost savings to you of about $3,500. Click the link below for more information on how to begin the process.
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Selling to an Individual Buyer or a Corporate Buyer Takes Time – Start Planning NOW!
By: Steve Kikikis
Retirement—ah, that sounds nice, right? However, the path to retirement requires careful planning, especially when it comes to selling your veterinary practice. While the idea of selling may seem simple, the reality is often far more complex. Selling a veterinary practice isn’t as straightforward as putting up a “For Sale” sign and waiting for buyers to arrive. Whether it’s finding the “right” individual buyer or navigating the complexities of selling to a corporation, veterinarians should start planning the sale of their practice at least three years before their intended retirement date. Omni Practice Group is here to help you determine the best timeline to begin the process.
Challenges with Individual Buyers and Extensive Due Diligence
Selling a veterinary practice to an individual buyer can be a lengthy process, often taking anywhere from three months to three years. One of the biggest challenges is the shortage of qualified buyers in the Pacific Northwest and across the nation. Potential buyers who meet the financial and professional criteria to own a practice are becoming increasingly rare. Many veterinary professionals are opting to remain associates rather than take on the commitment of owning and operating a practice full-time.
At Omni Practice Group, we are committed to addressing this challenge. We actively market your practice to individual buyers through buyer seminars, attendance at industry conferences, outreach to veterinary schools, and leveraging our extensive database of potential buyers. If there’s a doctor considering practice ownership, we ensure they know about your practice.
Once a buyer is identified, the process of due diligence begins. This includes an in-depth evaluation of the practice’s financials, client base, operational procedures, and securing financing, as well as negotiating terms and other critical details. This thorough process ensures that buyers fully understand their investment and can assess the practice’s viability for future success. While vital, due diligence takes time and underscores the need to start planning early.
Corporate Buyers: Balancing Opportunity and Commitment
In recent years, corporate buyers have become significant players in the veterinary practice acquisition landscape, and 2024 is no exception. Selling to a corporate buyer can offer financial security and access to resources, but it also comes with specific requirements.
Corporate buyers typically expect a long-term commitment from the selling veterinarian, often requiring them to remain with the practice for 2-3 years post-sale. This arrangement ensures a smooth transition of ownership, continuity of care for patients, and the successful transfer of knowledge to the new owners. Additionally, the work agreement will outline financial expectations for both the outgoing doctor and their associates.
For veterinarians planning their retirement, this extended post-sale commitment may delay retirement plans by several years, making it even more important to plan the sale of your practice well in advance.
Omni Practice Group: Your Partner in a Complex Process
Selling a veterinary practice is not a typical transaction; it’s a multifaceted process requiring careful consideration, strategic planning, and sufficient time. By starting the sale process at least three years before your planned retirement, Omni Practice Group can help you navigate the complexities of the market with greater ease and confidence. Our expertise ensures that you have the time needed to find the right buyer for your practice and facilitates a smooth transition.
Your Next Steps
Contact Steve Kikikis today to schedule a consultation. Together, we’ll evaluate your practice to determine its value, identify potential buyers, and estimate the timeline needed for an individual sale or corporate transaction. Start planning now to secure the retirement you deserve!
Navigating Retirement: How Dental Practice Brokers Can Support Baby Boomer Dentists in Selling Their Practices
By: Jen Bennett
As the baby boomer generation continues to retire, a significant demographic shift is occurring in the dental profession. Many seasoned dentists are at a pivotal stage in their careers, contemplating the sale of their practices and transitioning toward retirement. This momentous decision can be daunting, but it also presents a unique opportunity for both retiring dentists and new practitioners looking to enter the field. As dental practice brokers, we are here to assist dentists in navigating this important transition, ensuring they receive the support and expertise needed to make the sale process as smooth and rewarding as possible.
Understanding the Landscape
Recent surveys show that a large percentage of dentists plan to retire in the next few years. This raises questions about the future of their practices and the continuity of care for their patients. For many, selling their practice is not just about financial gain—it’s about finding the right successor who can uphold their legacy and provide quality care to their loyal patient base.
The Role of a Dental Practice Broker
As dental practice brokers, our role is to facilitate the sale of dental practices while ensuring that both sellers and buyers achieve their goals. Here’s how Omni Practice Group can help retiring dentists during this crucial transition:
- Valuation Expertise: Accurately pricing a dental practice is critical for a successful sale. We conduct a comprehensive valuation, considering factors like patient demographics, revenue trends, location, and equipment condition. This ensures retiring dentists receive a fair market price that reflects their practice’s true value.
- Marketing Strategy: Once the practice is valued, we develop a tailored marketing strategy to attract potential buyers. This involves creating compelling listings, utilizing industry contacts, and leveraging online platforms to reach a broader audience. Omni’s goal is to showcase the unique aspects of each practice, emphasizing its strengths and potential for growth.
- Confidentiality and Professionalism: Selling a dental practice can be sensitive. We prioritize confidentiality throughout the process, ensuring that the details of the sale remain discreet. This protects the seller’s reputation and maintains patient and staff trust during the transition.
- Negotiation Skills: Negotiating the terms of a sale can be complex. Omni acts as an intermediary between the seller and potential buyers, facilitating discussions and helping to navigate any challenges that arise. Omni’s 20 years of experience in the industry allows us to advocate effectively for the seller’s interests while fostering a fair agreement.
- Transition Support: Throughout the transition process, we are committed to being your trusted partner from start to finish. From step one, of putting together a comprehensive valuation of your practice, to the final step of escrow, our dedicated team ensures that all involved parties remain aligned and on track for a successful transition. We understand that selling your practice is a significant decision, and we take proactive measures to facilitate clear communication and address any concerns that may arise. Our support includes everything from assisting with negotiations and marketing the practice to introducing the new owner to staff. We guide you through every phase of the process, ensuring that the legacy of your practice continues smoothly and effectively. Your success is our priority, and we are here to help you navigate each step with confidence.
The Benefits of Selling with a Broker
For baby boomer dentists considering retirement, partnering with a dental practice broker offers several advantages:
- Time-Saving: Selling a practice is a time-consuming process. By working with a broker, retiring dentists can focus on their patients and practice operations while we handle the intricacies of the sale.
- Market Insights: As experienced brokers, we have a deep understanding of market trends and buyer preferences. This knowledge allows us to position the practice effectively to attract serious buyers.
- Maximized Value: With professional guidance, retiring dentists can ensure they receive the best possible price for their practice. Our expertise in negotiations often results in better financial outcomes for sellers.
Conclusion
As baby boomer dentists approach retirement, the decision to sell their practice is one of the most significant choices they will make. By partnering with a dental practice broker, they can navigate this transition with confidence, ensuring that their legacy continues while achieving their financial goals. With the right support, retiring dentists can embrace the next chapter of their lives, knowing that their practices are in capable hands. If you are a baby boomer dentist contemplating retirement, Omni Practice Group is here to help guide you through this process and ensure a successful sale that honors your years of hard work and dedication to the dental profession.
Read More5 Points to Ponder About a Transition in the New Year
We have been involved in practice transitions since the mid-1990’s. Our company has sold over 500 practices in 12 different states. Doctors have sold their practices for numerous reasons ranging from just being tired of owning and managing a practice to severe health issues forcing them to sell.
In all these years and transactions we have performed, not one doctor has come up to us and said “I wish I wouldn’t have sold my practice so soon”, or “I wish I still could own my practice”. In fact, most doctors whom we talk with months, or even years after selling their practice say “selling was one of the smartest decisions I made, I wish I would have sold much earlier”.
So, how do you know when is a good time to sell? Here are a few things to consider:
- The Current Sales Market – Is it a buyer’s or seller’s market? A buyer’s market is when there are a lot of practices for sale, interest rates are average to high and there is low demand. Currently, as of today, we are in a seller’s market. Interest rates are quite low. The economy is doing well. The demand for practices is high. Doctors and groups looking for practices producing over $1,000,000 per year is very high. That is attributed to the number of corporate buyers in the marketplace. The demand by corporate and other buyers is driving up the price of practices. In a few years, this will change, and prices will drop, possibly significantly. You want to sell your practice in a hot seller’s market versus a buyer’s market. Even if you sell 5 too early, you will make it up in the sales price you are going to receive versus the income you would make as an owner.
- Being Forced to Sell – There are certain things that are inevitable in life. Getting older is one of them. And that includes all the aches, pains and other health issues that go along with it. We have seen doctor after doctor, every year, sell their practice because of back, neck, hand, or eye site issues to name a few. We have also seen more serious health issues that forced a doctor to sell. Cancer in all its’ forms and other diseases can happen when you least expect it. There have been several doctors who every year told me they were ready to sell. Only when they were diagnosed with cancer did they decide to sell. One of them sold their practice and then passed away the next day. We have story after story of doctors who sold their practice expecting to enjoy retirement with their family only to report back that they or their spouse got sick, or worse yet, passed away. Enjoying retirement and life is something we should all have the opportunity to do. Selling when it’s the right time ensures us of this.
- Harvesting the Equity in Your Practice – This is one of our favorite strategies in selling a practice. And, selling in a seller’s market with higher practice values make it even a smarter decision. When you started or bought your practice, you probably took out a loan with the bank. As you have been in practice, you have paid your loan down and have built up your practice. The difference between the potential sales price of your practice and any debt you may have on your practice is called equity. Many doctors may have hundreds of thousands of dollars, if not millions of dollars, in equity. This equity does not do anything for you while you still have the practice. You cannot receive this money unless you harvest the equity. You do this by selling your practice. You put the hundreds of thousands, or million dollars into the bank, invest it, or pay off your house. Whatever you would like to do. You can then work back in the practice you just sold, or work in another practice. Or, you can even go buy a new practice, build it up and harvest even more equity. It’s a beautiful thing.
- And now for Something Completely Different – That was for the Monty Python fans out there. At times we all get tired of doing the same old thing, day in and day out. We are just tired of the monotony, tired of staff, tired of the patients and just ready to do something completely different. We have doctors who are ready to change course completely. We have had doctors sell and tell me they want to be a real estate agent, a barista, or they are going to run a surf shop in Hawaii. If you have reached that point and are tired of the same old routine, life is short, it is time to take action and do something different. You can always come back years later if you decide you have had a long enough break and are ready to return back to practice.
- Annual Production is Decreasing – For fun, go back and take a look at your last five years profit and loss statement or tax returns. Have your annual revenues gone down year after year over the past 5 years? How’s your income? Has it also gone done year after year? We frequently see this as practice owners start to get a bit tired towards the end of their career. They slow down their production, but the overhead stays the same, so their income goes down even faster. They then decide to sell and think that the price should be based on what the practice used to do, before the slide in production. It does not work that way. A practice’s value is what it is doing today, not five years ago when it was double the revenue. Using the Equity Harvesting strategy in number 3 above, would have given these doctors hundreds of thousands of additional dollars.
We are imparting this knowledge to you, not to get you to sell your practice as soon as possible. We are simply giving you some things to think about and passing on to you some wisdom from prior experiences of other doctors. Thinking about these five things in addition to taking action may provide you more time with your family if you sell a few years earlier. It may also give you more money to have a happy retirement.
Look at each one of the five items above and ask yourself if you want to sell your practice when you have to, or when you want to? As always, call us if you would like a free consultation.
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