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Should You Stay Or Should You Go?

Considerations For Dental Professionals Considering Office Relocation

Dental Office Relocation - Dental Practice Advisors

Is it time to move your dental practice to a larger space? Here are a few things to consider before you make the move.

Is your dental practice getting too big for its current location? Then an office move may be in order. But of course these things take time. It’s never easy for a business to just up and move at a moment’s notice. There are a ton of logistical considerations to address even before you start loading the moving truck. This is why you should consider the long-term potential of your chosen location.

  • Does the office get good traffic?
  • Is it easy to find?
  • Will your staff and patients be safe?

Once you are sure the space meets these essential characteristics, you can then assess the property’s other qualities.

Read Also: Office Relocation Made Easy – And Affordable

Choose The Right Office Location

Healthcare professionals need their office space to accommodate unique structural needs while providing a comforting atmosphere to patients. Not every location will be up to the challenge. A real estate broker who specializes in helping healthcare professionals can eliminate inadequate properties immediately – meaning you won’t have to waste your time walking through countless buildings that, for one reason or another, are unable to accommodate your practice. Instead, you will be free to serve your patients and manage your existing office responsibilities.

Finally, unless you are moving to a space that was already being used as a dentist office, you are likely going to have to pay for the space to be converted to fit your needs. Be sure to carefully consider the cost associated with remodeling a particular location and whether or not the move actually makes sense once the dust settles. Look to your financial advisor for help. Only after considering your practice’s financial stability, can you finally determine if relocating your dental practice is the right decision at this point in your career.

Reasons to stay put

If all of these considerations seem daunting or after crunching the numbers you and your team conclude that it’s not necessarily in your best interest to relocate your office at this time, you can still put your relationship with your real estate broker to good use.

Think about it, the last thing the owner of the property you are currently using wants is to have to go out and find a new tenant. From hiring their own real estate broker to market the property, negotiating terms of the new agreement and allowing any new tenant the time they need to build out the space, if you moved your practice elsewhere, they would likely be taking a pretty large financial hit. If you time it out right (about a year in advance), your real estate broker can help you negotiate a better deal on your lease. And the best part is that working with a real estate broker shouldn’t cost you a dime.

Assemble Your Team

Want to make your move as easy and stress-free as possible, assemble your team of professional advisors early to make sure you are armed and ready to make an offer if an opportunity presents itself. In addition to the usual players, your CPA, banker, lawyer, a real estate professional, etc. Contact the Bright Dental team at Rea & Associates and find out what you dental advisory team should look like and how each member should be able to help you grow your practice.

By Ryan Dumermuth, CPA, CFP (Mentor office)

Need help growing your dental practice?
These articles could give you some great ideas:

Revenue Growth Does Not Equal Practice Growth

Your Practice’s Free Valuation Could Come At A Hefty Price

Do You Need A Dental CPA When Buying A Dental Practice?

Revenue Growth Does Not Equal Practice Growth

Dental Practice Growth - Dental CPA

Instead of looking for more patients to cover the difference, give yourself permission to starting thinking about your practice from a much smaller scale. Get rid of the extra baggage that’s holding you down. Revenue doesn’t mean a whole lot unless you have the cash to back it up. To that point, it may be time to stop accepting patients who aren’t prompt when it’s time to pay their bills. Instead, be more selective when choosing which patients you will see.

We know a lot of dental professionals who like to spend their free time enjoying the outdoors when they are not seeing patients, which is why it may be helpful to bring some of the lessons you learn on the trail into the office. Take the growth of your dental practice, for example. It’s easy to get trapped into believing that you have to take on more patients to be more successful. But, if you’re not careful, more patients can actually hinder your growth in the long run.

Stay Out Of The Rocks

Have you ever been white water rafting? When the water is high, you glide effortlessly through the river, expertly navigating the bends and slicing through the current – it’s exhilarating. Flash forward a few months later, after the water level has dropped, and it’s a completely different story. Where it was once smooth sailing, you are now confronted with a scattering of rocks, boulders, logs and branches. Your ability to progress through the course takes a hit.

Your revenue is like the water level in this example. When it’s high, it hides a lot; but when it’s low, problems begin to reveal themselves. Unfortunately, some dental professionals believe that the best way to fix their problems is to add more revenue. What they don’t realize is that this tactic is simply masking the real problem.

If you want really want a financially healthy practice, you can’t rely on revenue growth to solve your problems.

Healthy dental practices are ones that are able to generate healthy cash flow. One way to do this is to tighten up your billing strategy. Oftentimes, business owners will only focus on their monthly revenue and forget to consider how long it actually takes for the money to roll in. Even though your practice’s revenue looks great for the month of July, it could be September (or later) before you actually get paid. In the meantime, you are stuck playing the waiting game.

Instead of looking for more patients to cover the difference, give yourself permission to starting thinking about your practice from a much smaller scale. Get rid of the extra baggage that’s holding you down. Revenue doesn’t mean a whole lot unless you have the cash to back it up. To that point, it may be time to stop accepting patients who aren’t prompt when it’s time to pay their bills. Instead, be more selective when choosing which patients you will see.

What’s Holding You Back?

It can be a lot of work to identify what’s holding you back and sometimes you need to look at your practice from a different perspective, some dental professionals find great success simply asking for help from an outsider. There is no one-size-fits all solution. The best way to take control of your business is to work with a trusted advisor.

A great place to start is by listening to Episode 10: The Revenue Sin from Unsuitable on Rea Radio to learn more about business health and what you can do to strengthen your cash flow. When you are done, you are welcome to click here for additional resources.

Do you have a question you would like us to address on Unsuitable? Send it to podcast@reacpa.com and let us know what issues are challenging your business. We could feature your question on an upcoming episode of Unsuitable or in a blog post.

You can also email your Bright Dental CPA for assistance or to learn more about how you can increase your dental practice revenue.

By Brad Martyn, Founder & CEO, FocusCFO

Looking for more ways to improve your business? Check out these articles:

Put Together An Amazing Dental Advisory Team

What To Expect From Your Career In Dentistry

Buying An Established Dental Practice? Master The Changeover

Succession Planning: A Must for Dental Owners

Dental Practice Valuations - Dental CPA

Is your dental practice ready for your retirement? Start your succession planning process now.

If you own your own dental practice you will eventually be faced with succession planning issues, so it’s just good sense to develop a plan now instead of waiting until the last minute when so much could go wrong. With a little help, you can craft a thorough plan that not only takes your wishes into consideration, but also the wishes of your family members.

Success Planning Options For Your Dental Practice

When considering your options, there are really only four alternatives from which to choose. You can:

 

  1. Transfer the business to the next generation of dental professionals in your family.
  2. Sell your practice to members of your management team.
  3. Form an employee stock ownership plan, or ESOP.
  4. Sell your practice to an unrelated party or liquidate your assets.

Since these options each have numerous, complex issues, they need to be carefully analyzed to determine the best course of action.

 Read Also: What is My Dental Practice Worth? 

It’s How You Start That Matters

Unless you are in the midst of a personal or professional crisis, you probably have no sense of urgency to begin your succession plan, which makes it easy to avoid starting the process altogether – the thought of facing difficult tax and legal obligations isn’t much of a motivator either. But succession planning doesn’t have to be that difficult, especially if you know where to start and what questions to ask.

In order to achieve your desired exit plan you need to prioritize the succession planning process well before your desired time to leave your practice. Work on answering important questions such as:

  • What am I going to do with myself after I leave my dental practice?
  • How much money do I need from my practice to retire?
  • How will my decision about an exit impact my family?
  • How can I be sure the practice will survive without me?

People and situations are different and complex – and there is no such thing as one right answer. Similarly, there is no such thing as a one-size-fits-all program that will guarantee that you will be able to exit on your desired terms. The good news is that if you take time to think about (and answer) the questions above you are well on your way in the process of determining your ideal succession.

Next Steps

Dental practice owners who fully understand their succession options, set a course of action to implement the plan and seek assistance to ensure the plan is being implemented as desired have the best chance of seeing optimal results.

So, are you ready?

Email the Bright Dental CPAs at Rea & Associates to find out how our business valuation experts can help you grow and better manage your dental practice.

 

By Tim McDaniel, CPA/ABV, ASA, CBA (Dublin office)

Check out the links below to learn more about the benefits of a Know & Grow Valuation.

Do You Have A Realistic Value Of Your Business?

What To Expect From Your Career In Dentistry

Your Practice’s Free Valuation Could Come At A Hefty Price

Dental Practice Valuations

It has become a popular business model for some companies to contact prospective or existing business clients to offer them a free business valuation report. But what the sales rep won’t tell you is just how expensive these free services can be. In the end, you are just throwing your hard-earned money down the drain.

Owning a dental practice is just as mentally taxing as maintaining any other economically viable business. It’s no wonder you often daydream about innovative ways to cut office expenses and jot down ideas to generate revenue on napkins over dinner. At some point you will come to terms with the fact that, in addition to helping people, your ultimate business goal is to increase your practice’s overall value while making sure you can save enough for your own retirement.

What would you do if someone approached you about conducting a free business valuation on your dental practice? The easy answer is to say “yes,” right? After all, you are probably well aware of how important a business valuation is to the success of your practice – not to mention your own financial future. So, naturally, it doesn’t make sense to turn down this free offer … or does it?

Read Also: What To Expect From Your Career In Dentistry

Is ‘Free’ Worth It?

It has become a popular business model for some companies to contact prospective or existing business clients to offer them a free business valuation report. But what the sales rep won’t tell you is just how expensive these free services can be.

I recently met with an insurance representative who mentioned that he provides clients with free business valuations. This particular company had CPAs and valuation professionals on staff and would prepare these valuations with just the answers they collected from a five-minute questionnaire and three years’ worth of their financial data. Within a few days, their client would (supposedly) have a clear picture of what their business was worth.

After hearing about their method, I had even more questions. After all, having conducted thousands of business valuations myself, I knew something didn’t quite add up. So I asked to have a look at the valuation report this company typically presented to their clients and, within minutes of reviewing the document, the company’s motive became crystal clear.

Not only was this sales rep giving clients inaccurate information, he was grooming them to purchase more insurance than they actually needed. A transaction that would have resulted in you paying much more than you could have anticipated. On the other hand, when you work with a business valuation expert your practice actually stands to make significant gains.

When you hire a business valuation expert, you are hiring a professional who will take the time and energy to really get to know you, your dental practice and its prospects for the future.

Not Free, But Priceless

Email the Bright Dental Team to find out how our business valuation experts can help you grow and better manage your dental practice. The benefits of a Know & Grow Valuation include general business planning, succession planning and financial planning, buy-sell agreement values, exit planning strategies, and more.

By Tim McDaniel, CPA/ABV, ASA, CBA (Dublin office)

 

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Why You Need A CPA When Selling a Dental Practice?

Dental Practice SalesLooking to sell your dental practice? Have you talked to your dental CPA about it? There may be some things you are unaware of when selling or some things you haven’t thought about that need done before your practice is sold.

What to Consider When Selling Your Dental Practice

  • Is the buyer qualified? It is important to verify that any buyers are qualified before talking to them about purchasing your dental practice. The buyer may not have been approved by the bank or they could be waiting for approval.
  • Is your equipment up-to-date? If you are selling now or in five years, you may want to consider purchasing new equipment. If your equipment is outdated, it might make your dental practice less attractive for buying.
  • Start cleaning and getting your practice ready to be purchased. Have old files lying around? What about old equipment hiding in a storage room? Get rid of things that are no longer needed and organize things that are so they can be easily found.
  • Be realistic about the price of your dental practice. If you are unsure about the true price of your dental practice, contact your dental CPA. They can help you figure it out and make sure you are getting the best value for your practice.
  • Help with the transition process. After you sell your practice, stick around for a few months. Help the new owner get adjusted. Introduce them to your referrals, partners, patients and staff. Get everyone comfortable with the new owner. It will make the transition smoother and keep everyone happy.

Contact Our Dental Practice Professionals

Selling your dental practice is a big decision and can take a lot of work. Make sure to consult with your dental CPA early so they can help you with getting ready.  Whether you are looking to sell now or within a few years, contact Rea & Associates. Our team of bright dental CPAs can work with you to determine the value of your dental practice and help you get it ready for selling.

Related Articles:

Why Do You Need A Dental CPA When Buying a Dental Practice?

Ten Tips for Growing Your Dental Practice

What To Consider When Purchasing A Dental Practice

Rea & Associates, Inc. | Bright Dental CPAs | 7201 Center St, Mentor, Ohio 44060-4858
phone + 440-266-0077