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    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.

     

    It is fairly typical for an associate to work for a few years to develop the trust and goodwill of the owner as well as that of the patients and staff. During this time, on many occasions, the associate may feel as if he or she is working to raise the eventual sale price. If the potential new owner or partner approaches the dentist about working against his or her own interest, the owner may want to consider discounting the purchase price to account for the sweat equity being developed by the associate.

    The owner has been earning income off the associate’s labors while having the value of the practice increase with this relationship. The consideration of a discount or type of preferential financing may be appropriate for the associate, if this discussion occurs. When one considers brokerage fees, the time on the market and the potential for the staff to hear about the transition and fear for their jobs, a discount may be a cheap price to pay for a quick, easy transfer.

    Related article: How to find the most buyers for your practice transition

    How to begin

    Of course, having a well-seasoned and trusted associate is the first step. The conversations with that person should be taking place almost as soon as the associate signs the employment agreement.

    Next come discussions with the dental CPA, assuming that the dentist has retained one. From that point, conversations will occur and the transition to the associate is on its way. It may be a few years or months, but the guidelines are being established as time passes. 

    Bruce Bryen, CPA, CVA
    Bruce Bryen is a certified public accountant with over 40 years of experience and is a part of RKG Tax & Business Services LLP, an ...

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