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Articles

The Professional Advisory

  1. Is it Time to Move?
  2. Staging A Dental Practice
  3. The High Cost of Dying
  4. Deal-Busters
  5. Patients - Attract and Retain
  6. Should I Stay or Should I Go?
  7. Is There a Buyer for Every Practice?
  8. Good, Better, Best - The Market has Spoken
  9. Smooth-Sale-ing
  10. Buying Time
  11. Patients, Patience, Patients
  12. A Real Patient
  13. Why Do a Practice Valuation? I'm not Selling
  14. Irrational Exuberance or The New Normal?
  15. Do dental equipment and dental technology affect a practice value?
  16. Finding and Being a Mentor
  17. Bigger is Better
  18. Daves Top Ten List for Buyers (Vendors should read this too!)
  19. How Well Do You Know Your Practice?
  20. Dave
  21. What will happen to dental practice Values in the next 10 years?
  22. Your Premises Lease is an Important Asset
  23. What are Associates Thinking?
  24. There is Life Outside the GTA
  25. When Is the Right Time to Sell My Dental Practice?
  26. Mergers are a Viable Option
  27. Is Your Associate an Asset or a Liability?
  28. Has your Practice Facility Kept Up With Your Billings?
  29. The 100 per cent of Gross Myth
  30. The Past, The Present and The Future
  31. Caveat Emptor
  32. Overpaid Long Term Staff
  33. Selling your Practice in Stages
  34. A Potential Pitfall of Selling Shares
  35. Value in Your Practice Through Balance
  36. Only Trusted Staff Can Defraud You
  37. To Own or Not to Own Practice Real Estate? That is the Question.
  38. Coping With A Large Patient Base
  39. Successful Dental Practice Transitions
  40. Taking Care of Business
  41. The Investing Dentist Phenomenon
  42. Two areas to focus upon that could negatively impact the value of your practice
  43. Organize your Debt in Order to Sell your Practice
  44. Having a Better Team
  45. How Do I Prepare My Practice For Sale
  46. How Do I Prepare My Practice For Sale? Part 3
  47. How Do I Prepare My Practice For Sale? Part 2
  48. How Do I Prepare My Practice For Sale? Part 1
  49. Advice to My Son or Daughter Graduating from Dental School
  50. Transition - What to Expect
  51. Discussion on Digital X-Rays
  52. Partnerships and Shotguns
  53. Strategic Planning - How to Get Started
  54. Calling All Vendors - Practices have Gone Up in Value
  55. Purchasers: Expect to Pay More for a Practice because of Lower Professional Corporation Tax Rates
  56. Matrimonial Practice Valuations
  57. Purchaser's Guide to Affording a Practice
  58. Location Improvements Throughout Your Career
  59. Small Practice Valuations
  60. Partnerships – The Best and The Worst
  61. Changing Location When the Opportunity Comes Along
  62. Visual Presentation of Your Practice
  63. Presentation of Charts
  64. Your Premises Lease Can Be Your Worst Enemy
  65. How to Select an Appraiser for Your Practice
  66. How Are Your Billing Ratios?
  67. It Pays to Invest in Your Tangible Assets
  68. The Importance of Separate Financial Statements
  69. Five Time Frame Levels to Sell a Practice
  70. 12 Suggestions to Safeguard Computer Data
  71. How to Buy a Visible Practice
  72. Why is there a shortage of good practices today?
  73. The Importance of Equipment in the Purchase of a Practice
  74. The Balanced Practice
  75. Will My Practice Be Saleable in The Future?
  76. Buyer Be Aware
  77. Excess Profit - The Second Key
  78. Patients and Profits are the Keys
  79. Plan Ahead

Volume 5: Will My Practice Be Saleable in The Future?

Download the PDF version now!

As the Baby Boomers wish to sell their practices, some say that there will be only a limited demand and as such your practice will lose a lot of its value. I do not believe this is true. By taking certain precautions, you can ensure that your practice will sell for what it is currently worth or more.

Let's start at the beginning. Each dentist should try to run their practice as efficiently as possible in order to make a reasonable Net Income. Remember that Profit and Patients make value (See Volume 2 & 3 of The Professional Advisory). To maximize the return from your practice you would never sell it. The greatest reward is in the efficient running of your practice year after year, not its sale value.

Remember practices become more valuable when there are too many dentists in an area, i.e. Toronto. That is to say, a shortage of patients makes each patient more valuable. If you are in an under serviced area, anyone can set up without purchasing a practice and be successful from day one. This easy entrance into the community certainly keeps the value of existing practices low. If it is low now it will probably remain low in the future.

In Boom Bust & Echo, David K. Foot defines a Baby Boomer as born between 1947 and 1966. Some of the vendors today are Baby Boomers. For example, a dentist who was born 1950, graduating 1975 would be 52 today. He may well be ready to retire or at least ready to sell his practice and semi retire. Yet there are far more purchasers than there are good practices for sale. Many practices are merging into larger practices to get the efficiencies of scale, space and staff. This trend should continue.

Vendors come to the marketplace to sell their practices at different ages. This year I have sold a practice for a dentist who graduated in 1983 and another dentist who graduated 1947. That’s a huge range. The impact of Baby Boomers will not be material.

If you have a good patient base and have controlled your overhead, the practice will have a reasonably stable value regardless of Baby Boomers now or in the future. As I see the future there are greater risks to the value of your practice such as changes in the economy, taxes and dental insurance coverage. Take care of your patients and your overheads and the value of your practice will take care of itself.

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