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Articles

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

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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.

The Professional Advisory

  1. One Year Later

  2. Dealing with Unsolicited Offers

  3. Covid-19 Practice Sales Update

  4. When is the Right Time to Sell Your Practice and Why?

  5. Partnership Pitfalls

  6. The Real Cost of a Dental Practice Set-up

  7. Smaller Practice Realities

  8. Dental Market Update - 2019

  9. Creating Your Own Most Valuable Practice (MVP)

  10. Small Practice Economics

  11. The Market is Very Efficient

  12. How Can Dental Practice Values be Rising and Declining?

  13. Hygiene as a Value Driver

  14. The Value of a Good Team

  15. Is it Time to Move?

  16. Staging A Dental Practice

  17. The High Cost of Dying

  18. Deal-Busters

  19. Patients - Attract and Retain

  20. Should I Stay or Should I Go?

  21. Is There a Buyer for Every Practice?

  22. Good, Better, Best - The Market has Spoken

  23. Smooth-Sale-ing

  24. Buying Time

  25. Patients, Patience, Patients

  26. A Real Patient

  27. Why Do a Practice Valuation? I'm not Selling

  28. Irrational Exuberance or The New Normal?

  29. Do dental equipment and dental technology affect a practice value?

  30. Finding and Being a Mentor

  31. Bigger is Better

  32. Dave's Top Ten List for Buyers (Vendors should read this too!)

  33. How Well Do You Know Your Practice?

  34. Dave's Top Ten List for Vendors

  35. What will happen to dental practice Values in the next 10 years?

  36. Your Premises Lease is an Important Asset

  37. What are Associates Thinking?

  38. There is Life Outside the GTA

  39. When Is the Right Time to Sell My Dental Practice?

  40. Mergers are a Viable Option

  41. Is Your Associate an Asset or a Liability?

  42. Has your Practice Facility Kept Up With Your Billings?

  43. The 100 per cent of Gross Myth

  44. The Past, The Present and The Future

  45. Caveat Emptor

  46. Overpaid Long Term Staff

  47. Selling your Practice in Stages

  48. A Potential Pitfall of Selling Shares

  49. Value in Your Practice Through Balance

  50. Only Trusted Staff Can Defraud You

  51. To Own or Not to Own Practice Real Estate? That is the Question.

  52. Coping With A Large Patient Base

  53. Successful Dental Practice Transitions

  54. Taking Care of Business

  55. The Investing Dentist Phenomenon

  56. Two areas to focus upon that could negatively impact the value of your practice

  57. Organize your Debt in Order to Sell your Practice

  58. Having a Better Team

  59. How Do I Prepare My Practice For Sale

  60. How Do I Prepare My Practice For Sale? Part 3

  61. How Do I Prepare My Practice For Sale? Part 2

  62. How Do I Prepare My Practice For Sale? Part 1

  63. Advice to My Son or Daughter Graduating from Dental School

  64. Transition - What to Expect

  65. Discussion on Digital X-Rays

  66. Partnerships and Shotguns

  67. Strategic Planning - How to Get Started

  68. Calling All Vendors - Practices have Gone Up in Value

  69. Purchasers: Expect to Pay More for a Practice because of Lower Professional Corporation Tax Rates

  70. Matrimonial Practice Valuations

  71. Purchaser's Guide to Affording a Practice

  72. Location Improvements Throughout Your Career

  73. Small Practice Valuations

  74. Partnerships – The Best and The Worst

  75. Changing Location When the Opportunity Comes Along

  76. Visual Presentation of Your Practice

  77. Presentation of Charts

  78. Your Premises Lease Can Be Your Worst Enemy

  79. How to Select an Appraiser for Your Practice

  80. How Are Your Billing Ratios?

  81. It Pays to Invest in Your Tangible Assets

  82. The Importance of Separate Financial Statements

  83. Five Time Frame Levels to Sell a Practice

  84. 12 Suggestions to Safeguard Computer Data

  85. How to Buy a Visible Practice

  86. Why is there a shortage of good practices today?

  87. The Importance of Equipment in the Purchase of a Practice

  88. The Balanced Practice

  89. Will My Practice Be Saleable in The Future?

  90. Buyer Be Aware

  91. Excess Profit - The Second Key

  92. Patients and Profits are the Keys

  93. Plan Ahead

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