Dental Economics: How To Sell Your Dental Practice During A Pandemic
As dentists continue to make adjustments to their services and policies due to the ongoing Coronavirus pandemic, some are considering selling their dental practices or retiring altogether. For some of the dentists who fall into this category, the idea of selling their practice or retirement may have been on their minds for a while before the pandemic struck but they had to put those thoughts and plans on hold as the public health and economic crisis unfolded. However, with the way things are at the moment, it might be worth revisiting those plans.
The pandemic is no longer news - it has been here for a while. Dentists in North America and around the world are adapting and making necessary changes to keep their dental practice thriving. The majority of the dental practices that closed during the lockdown have partially reopened and these practices are implementing safety procedures and policies to keep their patients and team members safe. Patients who have been waiting for months to schedule their appointments and revisit their dentists can now safely do so.
Yet, as dentists and patients continue to work towards a version of normalcy, some dentists are looking to move on from their dental practice or dental career. The uncertainty of the times we are in makes such decisions more difficult than usual. These dentists want and deserve to know the state of dental practice sales during the current recession and pandemic. This information could help them make informed decisions about the next phase of their dental practice, dental career and, generally-speaking, life.
In this article, we will discuss common questions dentists have about dental practice sales during the ongoing economic downturn and Coronavirus pandemic. You will also learn about four tips to keep in mind when preparing to sell your dental practice. During a webinar with the Canadian Dental Association, Tier Three Brokerage’s Dr. Bernie Dolansky provided most of the answers to the questions that we address in this article.
What is the current state of dental practice sales?
As you can imagine, the answer to this question is just as complex as it is straightforward. The short answer is dental practice sales are still happening. The long-winded answer is only a few dental practice sales are being closed but several conversations about sales are ongoing.
Banks consider dentists and other health professionals to be low-risk when it comes to credit. As such, they are still open to financing sales and purchasers are still looking to go through with the process. However, many banks and purchasers are waiting for dentists to be completely back to work or their dental practices to fully reopen before closing dental practice sales. This means that although your dental practice could attract a buyer right now, it may take a few months longer than usual for you to sell your dental practice.
What is the interest level for dental practice sales?
The reality is that many dentists are at crossroads. They are looking to sell and/or retire. These dentists are constantly in the ears of buyers and dental support organizations (DSO). Before the pandemic struck, the market for dental practice was doing well. Buyers were interested and sellers were ready. For buyers, this hasn’t changed. DSOs, particularly, are still very interested in buying dental practices of different sizes.
Despite the pandemic, the market for dental practices is expected to remain strong. During the 2008 global recession, the value of dental practices went up due to a decline in supply. There is a real chance that this could be the case during the ongoing pandemic. Buyers are aware of this and they may want to act sooner than later.
How can I protect the value of my dental practice?
The key here is to be proactive and intentional about maintaining the financial health of your dental practice. Think about ways you could reduce your expenses now and in the long term. Consider the impact the recession could have on your personnel and how that could affect your dental practice’s quality of service delivery.
As you think about your expenses and personnel, you should also work on optimizing your workflow as well as your dental practice’s patient acquisition and retention strategies. You may need to make changes to how to interact with patients and market your services. However, you do not have to go through this phase of the process alone. You can contact a Connect the Doc marketing expert to guide and inform you about how our brilliant line of automated tools and services can ensure patients keep booking appointments with your dental practice. This will ultimately positively contribute to the financial health of your dental practice.
Should I list my dental practice for sale now?
You are the best person to answer this question for yourself. Despite the positive projections for the dental industry during this pandemic, these are still uncertain times. Anything could happen. We are all learning more about the state of things as we go. Any lawyer, broker and financial advisor can only give you advice based on the data they have access to. If this data keeps changing, their advice will also keep changing. At the end of the day, you have to decide for yourself.
If you are in a position not to sell at the moment, you could choose to wait until things are much more settled. However, if you are in a position where you have to sell your dental practice or retire as a dentist, you could choose to start the process now and work towards closing a sale when things are back to normal. The choice is yours to make.
How can I prepare to sell my dental practice?
If you have decided to sell your dental practice, the next step is to prepare for your sale. Selling your dental practice can be just as exciting as it is stressful. A lot of considerations need to be made to ensure you carefully handle this process. This part of the article will discuss four tips to keep in mind as you prepare to sell your dental practice.
- Consult family and trusted advisors
Selling your dental practice is a big decision. This is a decision you shouldn’t have to make alone. Take some time to talk to your family and trusted friends/advisors about your decision. In moments like this, you need a support system as you transition into the next phase of your career or life. Your support system is your transition team. They can talk and walk with you as you take this important step.
- Start Planning Early
Given the economic downturn and public health crisis, it could take a while for you to close a sale for your dental practice. As a result, it may be tempting to sit back and wait until things are back to normal before putting plans in motion. The reality is, regardless of the state of our economy, you always need to start planning early when selling a dental practice. From business evaluations to sales negotiations and tax considerations, there is a lot that goes into closing a sale for a dental practice. You have to be proactive about your decision and start taking the right steps towards selling as soon as possible.
- Consult Professionals
As we have established, selling your dental practice means you have to put your practice’s books, inventory and services in order. You will need to consult professionals who can work with you through this process. From marketers - like those at Connect the Doc - to business evaluators, financial advisors and a lawyer, you need to connect with experts who will guide you through every step of the way. The experts you choose to work with must have you and your dental practice’s best interest at heart.
- Be Smart About It
In days like these, you can be sure that some buyers will be looking to take advantage of misinformed sellers. This is why you must be smart about this process. Do not make impulsive or emotional decisions even if you are desperate to sell. Do your research and due diligence. Ask questions. Talk to fellow dentists and dental industry experts in your dental association. These are uncertain times and the information and data we have are constantly changing so be sure to stay updated on changes in the dental industry.
Dentists are faced with several tough choices as they deal with the challenges posed by the recession and pandemic. Amongst many tough decisions they have to make, selling their dental practice is one of the big ones. The good news is there are opportunities to sell and a smart way to go about it. The bad news is, despite positive projections about the dental industry, no one can say when or how things will get back to normal.
If you must sell your dental practice, do yourself a favour and be proactive about it. Seek help when you need it. Connect the Doc helps dentists across North America to stabilize and improve their workflow and revenue using key automated tools and services. Contact us to learn how you can protect and increase the value of your dental practice even in these uncertain times.