Regardless of where you are in the selling process, you can never start too early. Consider the following 13 tips to improve your practice now.
1. Get your fees in line. Fees should be evaluated and adjusted annually. Several resources are available to report treatment fees by percentile for a given zip code. Getting your fees in line can add practice value if instituted soon enough.
2. Create an analysis of practice cash-flow. It is critical to understand that the total value of the dental practice will never exceed the ability of the practice to generate a large enough stream of income for both debt service and a reasonable profit to the purchasing dentist.
3. Maintain your production. Sometimes owner/ doctors will start to slow down before actual retirement. This results in an exponential decline in profit and practice value. It is important to maintain the historic growth rate of the practice until the sale closes.
4. Keep new patient numbers up. Purchasers focus on this number and consider it an indication of practice vitality.
5. Get your financial records in order. Typica dental practice profit and loss and income statements fail to give a true practice overhead and profit picture. Ask your accountant to group related expenses together for the purpose of determining true profit. If you own two practices, avoid a co-mingled tax statement.
6. Boost your recall system. Hygiene income may comprise as much as 22 to 25 percent of the total income in a typical general dental practice. This percentage can climb to 30 percent or more in practices aggressively utilizing soft-tissue procedures. Generally, the higher the hygiene percentage the better ... unless the practice is one where the doctor is underproducing.
7. Review the condition of all dental records. In the due diligence process, an acquiring dentist may examine a portion of the dental records. The current practice owner should maintain les with accurate treatment entries, up-to-date patient information, and easily read treatment plans.
8. Clean up clutter and spruce up the decor. First impressions matter. Most prospective purchasers will be looking at multiple practices. Every attempt should be made to make your ofce stand out in the crowd. Continually invest in what it takes to maintain a fresh, updated office appearance.
9. Improve the dental equipment. Purchasers expect to see modern equipment in the dental practice. The practice owner should keep all equipment updated, from both a use and design function.
10. Do not let the lease lapse. If you intend to sell your practice using third-party financing, understand that most lenders require the purchaser to have a lease for at least the length of their mortgage. Speak with a commercial lease broker whenever you renew your lease to help you negotiate the best terms which allow you to transfer the lease without unreasonably locking you in.
11. Examine your dental treatment mix.
12. Emphasize the fee-for-service aspect of your business. Practice owners should try to retain the majority of their practice as fee-for-service and very carefully consider the insurance plans they accept. Make sure these plans may be transferred to another provider following a sale.
13. Consult with your advisors. Practice transition consultants/advisors should be able to identify weaknesses and recommend methods to correct these. This will help you maximize revenues from the transition of your practice. - 15224
1. Get your fees in line. Fees should be evaluated and adjusted annually. Several resources are available to report treatment fees by percentile for a given zip code. Getting your fees in line can add practice value if instituted soon enough.
2. Create an analysis of practice cash-flow. It is critical to understand that the total value of the dental practice will never exceed the ability of the practice to generate a large enough stream of income for both debt service and a reasonable profit to the purchasing dentist.
3. Maintain your production. Sometimes owner/ doctors will start to slow down before actual retirement. This results in an exponential decline in profit and practice value. It is important to maintain the historic growth rate of the practice until the sale closes.
4. Keep new patient numbers up. Purchasers focus on this number and consider it an indication of practice vitality.
5. Get your financial records in order. Typica dental practice profit and loss and income statements fail to give a true practice overhead and profit picture. Ask your accountant to group related expenses together for the purpose of determining true profit. If you own two practices, avoid a co-mingled tax statement.
6. Boost your recall system. Hygiene income may comprise as much as 22 to 25 percent of the total income in a typical general dental practice. This percentage can climb to 30 percent or more in practices aggressively utilizing soft-tissue procedures. Generally, the higher the hygiene percentage the better ... unless the practice is one where the doctor is underproducing.
7. Review the condition of all dental records. In the due diligence process, an acquiring dentist may examine a portion of the dental records. The current practice owner should maintain les with accurate treatment entries, up-to-date patient information, and easily read treatment plans.
8. Clean up clutter and spruce up the decor. First impressions matter. Most prospective purchasers will be looking at multiple practices. Every attempt should be made to make your ofce stand out in the crowd. Continually invest in what it takes to maintain a fresh, updated office appearance.
9. Improve the dental equipment. Purchasers expect to see modern equipment in the dental practice. The practice owner should keep all equipment updated, from both a use and design function.
10. Do not let the lease lapse. If you intend to sell your practice using third-party financing, understand that most lenders require the purchaser to have a lease for at least the length of their mortgage. Speak with a commercial lease broker whenever you renew your lease to help you negotiate the best terms which allow you to transfer the lease without unreasonably locking you in.
11. Examine your dental treatment mix.
12. Emphasize the fee-for-service aspect of your business. Practice owners should try to retain the majority of their practice as fee-for-service and very carefully consider the insurance plans they accept. Make sure these plans may be transferred to another provider following a sale.
13. Consult with your advisors. Practice transition consultants/advisors should be able to identify weaknesses and recommend methods to correct these. This will help you maximize revenues from the transition of your practice. - 15224
About the Author:
WB&A is a Dentist and Tax Attorney/Accountant with years of Texas dental practice transitions experience. Backed by in-depth experience, knowledge and credibility essential to making your practice transition seamless and successful. Dental Practice For Sale Dallas and Dental Practice For Sale East Texas
