Small decisions that can quietly cost you, your family, your staff and your patients

“The time to repair the roof is when the sun is shining.” - President John F. Kennedy

The same is true of your dental practice. The best time to protect its value is while the practice is still doing well, not after declining production, rising overhead, or an unexpected health problem has already limited your choices.

Most dental practices do not lose value all at once. The value leaks out a little at a time.

A practice owner cuts back a day. More procedures are referred out. Payroll creeps up. Equipment gets older. A key staff member talks about retiring, but no one is hired to take her place. The owner still earns a good income, the schedule still looks busy, and the bills still get paid.

Everything seems fine until it is time to sell. That’s when a practice owner can experience a rude awakening.

Waiting has a Price

According to the ADA, “Many dentists take years to prepare their practices for a profitable sale.” Late-career owners often tell themselves, “I’ll deal with the sale in a couple of years.” Two years become four. Four becomes six. Meanwhile, the owner and the practice both get older.

That delay may be comfortable for the owner, but it may not be harmless to everyone else.

Your family may be counting on the practice as part of your financial future.
Your staff may be counting on you to protect their jobs.
Your patients may be counting on a smooth transfer to a dentist they can trust.

If illness or an unexpected event forces the issue, they may be left dealing with decisions that should have been made while you were healthy and in control.

The uncomfortable truth is that many practice owners want to be in control of the eventual transition of their practices to new ownership, but instead, they let time, health, and circumstances make the decision for them.

Where the Value Goes

Profitability is usually the first place to look. Staff costs rise, supply and lab bills go unchallenged, and insurance reimbursements fail to keep up. A long relationship with a supplier or lab may feel good, but friendship is an expensive reason to overpay. A busy practice can still lose value if too little of each collected dollar reaches the bottom line.

The clinical side can change, too. Many older owners gradually refer out more specialty procedures or stop doing cases they no longer enjoy. That is understandable. But fewer procedures performed in the office usually means lower collections and less profit. A buyer sees the numbers, but may not appreciate the reason behind them.

Cutting hours can have the same effect. Moving from four days to three may improve your quality of life, and sometimes collections hold steady. But if patients cannot stay on a six-month hygiene schedule, restorative work is pushed out or more treatment is referred away, the practice can become smaller while an owner is not paying attention.

Then there are the things everyone can see, but no one wants to bring up:

Aging equipment
Outdated technology
Possibly rent the practice cannot comfortably support
Key staff members who plan to retire with the doctor

A buyer needs a practice that can continue after the seller leaves. If the systems, staff, or patient relationships walk out with the owner, a buyer will pay less, or maybe there won’t be a buyer.

Your Health Does Not Need Your Permission

Practice owners rarely want to talk about their own health. A bad back becomes part of the workday. Hands start to hurt or shake. A heart condition, joint replacement, or other medical problem gets pushed aside because patients are scheduled and the practice needs its doctor.

But your body does not care that you planned to sell three years from now.

A planned transition gives you choices. A forced transition takes choices away. It can also turn a valuable practice into a distressed sale at the very time your family, staff and patients most need stability.

You do not need to sell today, but you do need to plan today, so you don’t lose control of what happens next.

Planning does not mean putting a “For Sale” sign on the door. It means finding out what the practice is worth now, what is hurting that value and which problems can realistically be corrected before a sale. Some changes, like adjusting insurance participation, rebuilding the team or updating systems, may need two or more years to produce a result a buyer will believe.

The goal is not to squeeze every possible dollar out of the practice and make your final years miserable. The goal is to protect the value you spent a career building while you still have the time and health to make good decisions.

You are not getting any younger. Neither is your practice. If you have been saying “someday” for the last several years, someday has already arrived.

Find Out Where Your Practice Stands

A confidential conversation today may prevent a rushed and
costly decision later. Contact Practice Endeavors to discuss your practice, your timing, and the steps that can protect the people who are counting on you.

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The 5-Year Value Leak