How Much Is Enough?
The Financial Question Most Practice Owners Never Really Answer
After years of caring for patients, building a successful practice, and providing a good living for your family, sooner or later, most dentists ask themselves one simple question:
"Do I have enough?"
Then, almost immediately, another question follows. "Why not just work another two or three years? I'll probably earn as much during that time as I could receive from selling my practice."
It sounds logical. In fact, it may even be true. But is another two or three years really buying you a better future, or simply costing you time you'll never get back?
According to the American Dental Association's Health Policy Institute, many dentists are delaying retirement and practicing longer than previous generations. Dental Economics has also pointed out that the best transitions don't happen by accident. They happen because owners begin preparing years before they ever put a practice on the market.
I've found that most owners aren't really asking whether they have enough money. They're asking something much deeper.
"Will I be okay if I stop practicing?"
That's an entirely different question.
Here's another one worth asking. If you sold your practice tomorrow, what would your monthly income actually look like? Between Social Security, retirement accounts, investments, and the proceeds from your practice, would your lifestyle really change? Or would working another few years simply increase the size of your estate while reducing the number of healthy years you have to enjoy it?
We've written before about the importance of looking beyond today's schedule and preparing well before circumstances force your hand. Owners who start planning early generally have more options, stronger negotiating leverage, and a much smoother transition than those who wait until burnout, illness, or an unexpected life event makes the decision for them.
Ohio financial advisor Doug Feller made an observation I think applies here: "The biggest lesson in life that I've learned is don't believe everything you think. Just because I think it doesn't make it true." Sometimes the biggest assumption we make is that we'll always have another healthy year.
This retirement graph tells an important story. Most people don't suddenly lose the ability to enjoy life. Instead, energy, mobility, and stamina gradually decline. Those first years after retirement are often your best opportunity to travel, serve, spend extended time with grandchildren, take that mission trip, play golf, fish, hike, or simply enjoy life without being tied to a schedule.
The danger isn't retiring too early.
The greater danger may be discovering you worked too long.
I like to call it your Freedom Day.
Freedom Day isn't the day you sell your practice. It's the day work becomes a choice instead of a financial necessity. That's the point where you've gained something far more valuable than another year's production: you've gained the freedom to decide how you'll spend the years ahead.
You don't have to decide today when you'll sell your practice. But you can decide to begin preparing.
The earlier you start, the more control you'll have over the timing of your transition, the value of your practice, and your ability to choose the buyer who's the best fit for your patients, your staff, and the legacy you've spent a lifetime building.
At Practice Endeavors, our Practice Value Acceleration℠ process helps owners prepare years before they sell. It identifies opportunities to strengthen practice value, reduce risk, and put you in the best possible position when your Freedom Day arrives.
If you've started asking yourself, "Do I have enough?", we'd be honored to have a confidential conversation.
Is Your Freedom Day Closer Than You Think?
You don't have to be ready to sell your practice to begin preparing. Let's have a confidential conversation about where you are today, what your goals are, and how our Practice Value Acceleration℠ process can help you preserve your options, your practice value, and your legacy.
Take control of your future
PVA℠ helps practice owners prepare for the inevitable transition of their practices to new ownership.
J. Robert “Bob” Brooks, CEPA, CBI
J. Robert “Bob” Brooks, CEPA, CBI, leads Practice Endeavors, an Ohio-based practice brokerage and dental realty company. His company provides practice owners with the tools they need to prepare well for life after practice ownership and to find the best price/best fit buyers for their seller clients. Bob was integral in starting the first of its kind dental practice broker credentialing for the International Business Brokers Association.