{"id":262,"date":"2024-01-06T17:47:22","date_gmt":"2024-01-06T17:47:22","guid":{"rendered":"http:\/\/freedom.local:8888\/?p=262"},"modified":"2024-03-08T20:40:56","modified_gmt":"2024-03-08T20:40:56","slug":"ideal-dental-practice-transition","status":"publish","type":"post","link":"https:\/\/freedomdentalpartners.com\/2024\/01\/ideal-dental-practice-transition\/","title":{"rendered":"Build Wealth With Your Dental Practice Transition"},"content":{"rendered":"\n
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Article Overview<\/h3>\n
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It\u2019s Time to Rethink Your Dental Practice Transition Strategy<\/h5>\n <\/a>\n \n \n \n \n \n <\/g>\n<\/svg>\n
Factors to Consider When Planning Your Dental Practice Transition<\/h5>\n <\/a>\n \n \n \n \n \n <\/g>\n<\/svg>\n
Choosing the Right Transition Partner<\/h5>\n <\/a>\n \n \n \n \n \n <\/g>\n<\/svg>\n
How to Plan Your Transition with Confidence<\/h5>\n <\/a>\n <\/div>\n <\/div>\n\n

Rethink Your Dental Practice Transition Strategy<\/span><\/h2>\n

\"Two<\/p>\n

For many years, the path to build wealth and transition your dental practice looked the same for everyone:<\/span><\/p>\n

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  1. Attend dental school<\/span><\/li>\n
  2. Begin clinical work<\/span><\/li>\n
  3. Buy a practice of your own<\/span><\/li>\n
  4. Sell your practice<\/span><\/li>\n
  5. Retire and play golf or travel<\/span><\/li>\n<\/ol>\n

    This approach worked for a long time because dentistry remained relatively unchanged for decades.<\/span><\/p>\n

    Buying or selling a dental practice has changed quite dramatically thanks to dental <\/strong><\/a><\/span>consolidation<\/a>. <\/b>Which means there’s no longer such a thing as a one size fits all exit plan. Your transition is a personal matter that must incorporate your unique needs and goals. Let\u2019s explore some of the important factors to consider when planning your transition.<\/span><\/p>\n

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    Factors to Consider When Planning Your Dental Practice Transition<\/strong><\/h3>\n

    When most people think about their transition, the first and most important consideration in their minds is money. While it\u2019s true that ensuring you have enough money is an incredibly important concern\u2014after all, how can you enjoy your next phase if you\u2019re struggling to fund it?\u2014there are equally important elements to bear in mind.<\/span><\/p>\n

    A dental practice transition used to be a reactive event that happened at the end of your career without much consideration for lifestyle goals or money beyond having enough to live out the rest of your days. <\/span><\/p>\n

    In today\u2019s economic climate, waiting that long to transition your practice means you\u2019re leaving a considerable amount of money on the table. The best time to transition in order to gain the most benefits is mid-career when you\u2019ve hit a plateau. <\/span><\/p>\n

    That means the time when you\u2019ve noticed your growth has slowed to 3-10% per year. This is the perfect time to have a transition aka, a liquidity event, in order to:<\/strong><\/p>\n

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    1. Eliminate any remaining student loan debt<\/span><\/li>\n
    2. Fill your retirement account with cash<\/span><\/li>\n
    3. Create multiple streams of passive income<\/span><\/li>\n
    4. Partner with others to explore other ventures (if you desire!)<\/span><\/li>\n<\/ol>\n

      In other words, a practice transition isn\u2019t retirement but an opportunity to maximize the value of one of your greatest assets\u2014your practice.<\/span><\/h3>\n

      A successful transition takes time, typically up to 5 years<\/a>. Therefore, there are several career and lifestyle factors that should come into play when you\u2019re putting your unique transition strategy together:<\/span><\/p>\n

      Autonomy –<\/strong> What sort of control would you like to have over your schedule and the procedures you\u2019ll do?<\/span><\/p>\n

      Loved ones –<\/strong> How will you involve your family into your plans? What changes will you make to satisfy their needs?<\/span><\/p>\n

      Succession –<\/strong> \u00a0Do you have at least one skilled, trusted Associate who has the potential to work at least 10 more years ready and willing to continue the work you began in your practice? What sort of incentives will you provide to keep them around?<\/span><\/p>\n

      Ideal Buyer –<\/strong> Who will you sell your dental practice to? You could go with a private buyer if you\u2019re able to find one with enough cash to cover the full value of your practice. But in order to get the most out of the sale, including the fulfillment of your transition strategy, your best option is a DSO (we\u2019ll explore this more later on in this article).<\/span><\/p>\n

      Tax Burden –<\/strong> How will you minimize the taxes you owe at closing so you walk away with the most money?<\/span><\/p>\n

      Wealth Creation –<\/strong> \u00a0How will you redeploy your earnings from the sale to create multiple streams of (passive) income?<\/span><\/p>\n

      This is just the tip of the iceberg. There are other considerations that are personal to you that are just as important. Write them all down, no matter how inconsequential they may seem. By doing this, you\u2019ll have a clearer idea of what sort of Transition Partner you need to make your exit from clinical practice satisfying and successful.<\/span><\/p>\n

      \"One<\/p>\n

      Choosing the Right Transition Partner<\/span><\/h2>\n

      In order to have your best shot at the transition of your dreams, your best option is to sell to a DSO. But not all DSOs are created equal. Let\u2019s take a brief look at how DSOs came to dominate dentistry and how to partner with the right one in order to secure your future.<\/span><\/p>\n

      In the 1990s Corporate DSOs began experimenting with conglomerating the dental industry, buying dental practices for sale. Many of them failed in these early days due to the lack of alignment between the investors and the doctors. The reason for this is the Corporate DSOs by and large cut out the culture of the practices that joined them by failing to keep their best interests at heart. Oftentimes this is still the case with corporate DSOs today:<\/span><\/p>\n