How to transition your practice to an associate
Selling your practice can be hard, but having someone you trust can make the whole transition process easier.
If there is a qualified associate working for the selling dentist, plans can be made to have that associate acquire the practice in a timely, cost effective transition. The associate will have clinical skills as well as administrative experience, so there will most likely be a smooth transition.
It is also likely that there will be a retention of the infrastructure and less patient turn over. The practice will normally continue with an approach similar to selling a dentist’s business. This way, the transition will be easier than if the seller had taken the alternate route of going through a practice broker or some other avenue.
The transition time will be much shorter, since the seller need only look into his or her own practice for the right person. Sometimes a transition with a practice broker can take months or even a year, based on the seller’s parameters and search for the buyer.
There are practice brokers who can and will assist the seller and associate in formatting the guidelines needed to complete the transaction, as well as explaining what must be accomplished with paper work. This assistance is offered for a fee. Make sure the practice broker has this experience, before you retain one for this important event! This can be helpful if the selling dentist does not have an experienced dental CPA in an advisory capacity.
How much does it cost?
How many times does a dentist’s advisor discuss the need for support for his or her own protection against illness, death or disability? Is the conversation about a partnership or acquisition status?
Besides that negative approach, it is also a smart way to the eventual exit strategy for the experienced dentist. Who better to acquire the practice than a professional who already knows the patients and staff?
With this type of transition, the cost to sell should be much cheaper for the seller and buyer. There is no commission to pay, fewer advisory fees for legal services, and typically only the dental CPA and practice evaluator to spend time with discussing the transaction. An evaluation of the practice should be completed so the buyer and seller don’t look at each other to determine the value of the dental practice and wonder if their assessment is correct. A dental evaluator is a must for an arms-length valuation and use in assisting the buyer with financing. This is similar to buying a house and getting an appraisal to help you determine the value, as well as to provide assistance with financing.
Up next: How and when to start the transition process