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?

How To Use Financial Statements To Analyze The Performance Of A 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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Dentistry: It’s Not All White Coats and Drills

Dental Career - Dental CPA

When was the first time you said to yourself: “When I grow up, I want to be a dentist?” Some people say they knew at an early age while others become inspired to pursue a career in dentistry in college; most, however, are not prepared for the difficulty of owning their own dental practice. The Free e-book, The Business Side of Dentistry: Tips and Tools for Dentists, is a great resource for those who what to know what they should expect.

When did you start thinking about a career in dentistry? Was it that time you spent hours reading scholarly articles about teeth for a research paper in middle school? Was it after you volunteered to help run the registration table during a community dental clinic as a sophomore? Or maybe the thought didn’t cross your mind until you were about to walk down the aisle at graduation and was suddenly faced with the urgency of answering that BIG question: “What do you want to be when you grow up?” Every professional in the field has a unique story about the moment they made the decision to become a dentist, but few will tell you that the reality of their career choice aligned perfectly with their expectations.

It turns out that most dentists don’t know what to expect when it comes to opening and managing their own dental practice.

Download: The Business Side of Dentistry: Tips and Tools for Dentists

You’re a trained, disciplined and compassionate professional who has likely invested an impressive amount of time and resources to get where you are today. From completing your bachelor’s degree and studying for the Dental Admission Test (DAT) to achieving high marks in class and excelling in your clinicals as a dental school student, you’re now ready to go out into the world and make a difference one tooth at a time.

Or are you?

Many dentists dream of starting their own dental practices. And while they may have the experience and expertise to care for their patients, they soon learn that they are ill equipped to manage the responsibilities that come along with being a small business owner. We have spoken with many dental practice owners who have said that while their educational career provided them with the knowledge and experience needed to become exceptional dentists, courses on taxes, financial planning, employee relations, finance, marketing, patient retention, business valuation, and real estate were simply not part of their dental school curriculum.

Do you want to know with whom you should align yourself to get your dental practice off the ground and soaring? Download The Business Side of Dentistry: Tips and Tools for Dentists for powerful insight into the real-world business challenges of dental practice owners. Whether you’re a recent dental school graduate, a seasoned dentist looking to take your career to the next level or a current dental practice owner looking for help maintaining a sustainable business model, this FREE e-book serves as an informative introduction into the business world of dentistry and offers readers a variety of helpful tips and tools to help dental professionals throughout their career.

Download your free copy of The Business Side of Dentistry: Tips and Tools for Dentists to discover what they never taught you in dental school or email Rea & Associates for more information.

By Ryan Dumermuth, CPA, CFP (Mentor office)

 

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