The Professional Advisory
- Is it Time to Move?
- Staging A Dental Practice
- The High Cost of Dying
- Patients - Attract and Retain
- Should I Stay or Should I Go?
- Is There a Buyer for Every Practice?
- Good, Better, Best - The Market has Spoken
- Buying Time
- Patients, Patience, Patients
- A Real Patient
- Why Do a Practice Valuation? I'm not Selling
- Irrational Exuberance or The New Normal?
- Do dental equipment and dental technology affect a practice value?
- Finding and Being a Mentor
- Bigger is Better
- Daves Top Ten List for Buyers (Vendors should read this too!)
- How Well Do You Know Your Practice?
- What will happen to dental practice Values in the next 10 years?
- Your Premises Lease is an Important Asset
- What are Associates Thinking?
- There is Life Outside the GTA
- When Is the Right Time to Sell My Dental Practice?
- Mergers are a Viable Option
- Is Your Associate an Asset or a Liability?
- Has your Practice Facility Kept Up With Your Billings?
- The 100 per cent of Gross Myth
- The Past, The Present and The Future
- Caveat Emptor
- Overpaid Long Term Staff
- Selling your Practice in Stages
- A Potential Pitfall of Selling Shares
- Value in Your Practice Through Balance
- Only Trusted Staff Can Defraud You
- To Own or Not to Own Practice Real Estate? That is the Question.
- Coping With A Large Patient Base
- Successful Dental Practice Transitions
- Taking Care of Business
- The Investing Dentist Phenomenon
- Two areas to focus upon that could negatively impact the value of your practice
- Organize your Debt in Order to Sell your Practice
- Having a Better Team
- How Do I Prepare My Practice For Sale
- How Do I Prepare My Practice For Sale? Part 3
- How Do I Prepare My Practice For Sale? Part 2
- How Do I Prepare My Practice For Sale? Part 1
- Advice to My Son or Daughter Graduating from Dental School
- Transition - What to Expect
- Discussion on Digital X-Rays
- Partnerships and Shotguns
- Strategic Planning - How to Get Started
- Calling All Vendors - Practices have Gone Up in Value
- Purchasers: Expect to Pay More for a Practice because of Lower Professional Corporation Tax Rates
- Matrimonial Practice Valuations
- Purchaser's Guide to Affording a Practice
- Location Improvements Throughout Your Career
- Small Practice Valuations
- Partnerships – The Best and The Worst
- Changing Location When the Opportunity Comes Along
- Visual Presentation of Your Practice
- Presentation of Charts
- Your Premises Lease Can Be Your Worst Enemy
- How to Select an Appraiser for Your Practice
- How Are Your Billing Ratios?
- It Pays to Invest in Your Tangible Assets
- The Importance of Separate Financial Statements
- Five Time Frame Levels to Sell a Practice
- 12 Suggestions to Safeguard Computer Data
- How to Buy a Visible Practice
- Why is there a shortage of good practices today?
- The Importance of Equipment in the Purchase of a Practice
- The Balanced Practice
- Will My Practice Be Saleable in The Future?
- Buyer Be Aware
- Excess Profit - The Second Key
- Patients and Profits are the Keys
- Plan Ahead
Volume 5: Will My Practice Be Saleable in The Future?
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.