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Transition Now – Dentist Retirement Planning

By: Dr. David Black, DDS, FICD, FACD

June 25, 2019

I retired from private practice four years ago.  I had a successful 40+ year run doing general restorative and cosmetic dentistry.  I had associates, and I worked as a solo practitioner. In the end, a couple of young entrepreneurs bought my practice and I worked as an associate for four years before stepping away from the chair.

This blog is about transitioning your practice now. It’s about retirement planning.

Retirement from dentistry, done right, is not just the act of stepping away from clinical dentistry but many things need to be considered first.

There are many things that need to be considered before retiring and transitioning from your dental practice.

1.  Can I get full value at the sale?

2.  Can I even sell the practice?

3.  Do I have adequate funds to be able to live well for the next 20-30 years?

4.  What will I do in retirement?

Can I get full value at the time of the sale?

This is also tied to the question, do you have enough saved to retire?  I worked with consultants about ten years before I sold to analyze my situation.  I discovered I needed to increase the value of the practice by increasing the production and collections in the practice.  Most sales are based on one of several evaluations, but mostly a three- year average of your collections. What that meant for me was the need to get another consultant to help me improve my systems, train my staff to be more productive, and save a large portion of my increases.

Values and production have changed in the ten years since I did this, but back then the magic number was to get production/collections above one million dollars.  I am sure the ideal number is higher than that now.

The proposition is that you have to create an asset that someone finds valuable.  To get top dollar, you must create something that is something of value, but also something the buyer sees as having growth potential.  This sometimes means improving the physical plant or doing cosmetic things to increase value. The biggest thing you have to do is increase the total collections.

Can I even sell the practice?

I bought the records of a practice for $5000 when the aging doctor decided to retire.  Unfortunately, he had ridden the practice down to next to nothing. His physical plant was old and the equipment was ancient.

I have seen several doctors just walk away from their practice.  For that reason, I intentionally positioned myself to sell at the peak of production and I made my office attractive and functional.  Some small rural areas may have the same problem as this dentist I bought out because it is hard to find doctors who want to live in the area.

You can discuss what you have with a broker or a dental consultant that helps with transitions to see if you have a problem practice you want to sell.

Do you have adequate funds to be able to live well for the next 20-30 years?

We are living longer.  My financial planner told me we have to plan to survive until age 93.  The good news is that we are enjoying a longer life.

The bad news is that we need more money and other assets to support us for more years.  This is something I did not have the skill to project, so I found another expert to help me plan.

Hopefully you will have a paid-for home and other cash producing assets in addition to your retirement funds to help.

You also have to figure what your standard of living is and how much it will cost you to have a lasting income.   The answer to this is to start early, defer as much gratification as you possibly can, so that you can survive your extra years in comfort.

My reality was that I did not have enough money and I wasn’t on the correct financial trajectory at first, but with planning and execution, I finally made it.  At the rate I am going, I should spend my last dollar at age 93.

What will I do in retirement?

Some people are lucky enough to feel good just laying back, resting, playing golf every day and generally just taking it easy.  Unfortunately, I was not wired that way. I wanted to do something that fulfilled my need to create a legacy and create more income to do extra things around the house or for my family.

I work part-time in a FQHC clinic, teach, coach and consult, along with lecturing and writing.  I call that being “REPURPOSED”, not retired.  That is me.

What about YOU?

As long as you have a transition plan that makes you feel good and cares for whatever your needs are, go for it.

We all will retire or die first.  The sad news is that our bodies cannot continue to do the hard job of dentistry forever.  Plan, Save, Enjoy!

If I can help you in your Retirement planning, contact me at: drblack@dentalpracticesolutions.com or Schedule a call here

 

ABOUT THE AUTHOR

David Black, DDS, FICD, FACD

DAVID BLACK, DDS, FICD, FACD

Dr. Black is an associate coach/dental consultant for Dental Practice Solutions. He is “The go-to-expert for all dentists who are thinking about transitioning into retirement or buying their 1st dental practice.

Dr. Black owned his own dental practice for over 30 yrs. There he developed an understanding of the critical importance in development of the owner-doctor’s leadership abilities, in addition to having great clinical skills. Once he built a high-level of productivity in his dental practice, he was able to sell to a group practice; and the rest of his career

 

Dental Practice Transition How Do You Create A Saleable Practice?

By: Dr. David Black, DDS, FICD, FACD

June 12, 2019

You cannot have a dental practice transition unless you have a practice that someone else wants to buy. It is critical that you have many factors working in your favor to sell your practice.

There are both physical and esthetic attributes, along with sound business metrics and positive staffing considerations.

The question when considering a dental practice transition is, How do you create a saleable practice?

Dental Practice Transition

PHYSICAL AND ESTHETIC ATTRIBUTES

Location is always an important factor in any business or real estate deal.  How much traffic goes past your office will help drive up new patients.

● How easy it is to enter and exit your office will help get new patients?
● Are you close to a school or a shopping center?
● Are you in a new or growing part of town or are you in a tired area that is not showing growth?

Next you have to consider the appearance from the road and what the interior of your office is like.  Make sure trim is painted and not peeling.  Is the landscaping inviting?  Is the upholstery on your furniture torn and dirty or bright and comfortable.

● Do you have a physical barrier between the reception area and the receptionist?
● Is the carpet or tile in good shape?

Buyers look at all these things and it will affect their attitude about buying the office.

● Is your dental equipment modern or antique?

Both will sell, but the old stuff will bring a lower price.  You will need to calculate what buying new equipment will cost against what the buyer is willing to pay for the old equipment.

Also you need to consider whether you can recoup the cost of replacement against just reducing the price to offset buying new equipment.

● Are you digital?

Any more the standard in any modern office is to have computer records and digital x-rays at the very least. A digital Panorex is prevalent in most offices also. If this is not the case, you will need to consider buying the digital upgrades or recognize that this is a big liability when selling.

BUSINESS METRICS AND STAFFING

If someone is going to buy a business, they have one of two approaches. The first is to buy an office that is profitable with good systems in place. They expect to pay a reasonable price.

The second type is looking for a bargain basement sale. If you are not making a good profit, if your production and collections are not high, if you are not seeing many new patients or have a sizeable group of patients of record, you are not going to get a good offer.

A few years before I sold my practice, I approached an older doctor who was going to close his office without selling it. He had run it down to nearly nothing and the physical plant was old and dated. I bought his phone number and his charts for $5000. I could not activate all his patients of record because they had left because of the state of the practice, but I did activate enough of his clients to more that pay for the cost to buy out the practice and not have another doctor come into our community in his office space.

You have two choices if you do not have good metrics:

1. Sell for less or improve your metrics.

When I sold my office, I had above average numbers, but I wanted to get the maximum return on my 40+ years of practice.

2. Hire an expert to boost your performance and profitability.

I hired consultants to help me improve all the key performance indicators that create success.

This is what you need to make the practice very attractive to the buyers.

I had long-term employees that had good relationships with our patients. This makes a buyer feel better about patient retention after you are gone. We had put in place many systems so that the team knew how to run the office without me micromanaging each and every thing going on in the office. I had many long-time patients that created the base for a smooth transition. The result of these efforts was to increase the sale price by about 30%.

The choice is yours:

Create a great, saleable practice, or bail out of the practice with less return on investment than you could have realized.

If you need help with your transition, give me a call for a free thirty- minute consultation, or engage us for coaching you all the way through your TRANSITION. Also you can get my free E-BOOK at our website, dentalpracticesolutions.com/resources

ABOUT THE AUTHOR

David Black, DDS, FICD, FACD

DAVID BLACK, DDS, FICD, FACD

Dr. Black is an associate coach for Dental Practice Solutions. He is “The go-to-expert for all dentists who are thinking about transitioning into retirement or buying their 1st dental practice.

Dr. Black owned his own dental practice for over 30 yrs. There he developed an understanding of the critical importance in development of the owner-doctor’s leadership abilities, in addition to having great clinical skills. Once he built a high-level of productivity in his dental practice, he was able to sell to a group practice; and the rest of his career as a dental practice owner is history.

In 2015, Dr. Black decided to share his knowledge to help other dentists duplicate his level of success, so he became a leadership coach and practice management consultant. His niche is treatment planning and case presentation.

Dr. Black is currently an associate coach and consultant, for Dental Practice Solutions, one of the leading consulting firms for nearly twenty years. As a seasoned practitioner, Dr. Black adds to the proven hygiene profitability coaching that Dental Practice Solutions is well-known for providing, to dental practices around the world.

Dr. Black’s expertise as an EQ and DISC trainer, makes him the best person to help more patients to say “YES!” to your patient care, as well as to enjoy working together as a team and loving what you do for your patients!

Want to have Dr. David Black speak to your study club or dental association?

Click to know more about Dr. David Black’s courses: Speaker Packet

Thinking about taking your dental practice to the next level?

We are looking for a few dental offices to beta-test our Dental Practice University training.

The training has video modules for the doctor, front office, dental hygienists and the entire team. There are scripts, forms and written processes.

You get information about Creating your culture, vision, team huddles that creat big productivity, hygiene video trainings on time management, treating the gingivitis and periodontal patient, CAMBRA, Lasers, phone skills, time management for the front office, handling cancellation calls, reactivating overdue patients, treatment planning, case acceptance, presenting financial arrangements, etc, etc.

There is a lot of training you receive over the next year. There will be hundreds of training video modules. You will also receive 24 AGD CE Credits for participating.

As a beta-tester, you pay nothing. We do ask that you provide feedback and give your opinion and ways to improve the University trainings.

To learn more about the University and to see if your dental team qualifies to be a beta-tester please TEXT: DPU to: 949-351-8741. Please text us: your name, your office name, your best email address and phone number. We will schedule 15 minutes to share more and let you know what we need from you and your team should you be chosen as beta-testers.

WHY START YOUR DENTAL PRACTICE TRANSITION TO RETIREMENT….. “NOW!”

By: Dr. David Black, DDS, FICD, FACD

April 16, 2019

The final transition each of us as a dentist and dental practice owner, if we are lucky enough to have a long and successful career, is the sale of our dental practice and retirement.  

As a dental practice owner what most of us do not realize is that each transition we go through influences our final transition.  Each experience we have in life creates at least part of our next experience, so that how we start ultimately influences how we finish our career.

 

 

I write and speak about the transitions dentists experience in their career as a dentist; starting with associateship, to ownership and finally,  retirement. I have experienced all of these phases and I have also helped dentists through each of these phases.

In today’s blog I share what I have learned and how I can help you TRANSITION NOW!

Keep reading glean knowledge from someone who has gone before you, learn from my mistakes and take away valuable information to create success in your life now.

An example of that is one of my “investments” thirty years ago.  A friend convinced me that we should invest in a bookstore to help start a Christian radio station with part of our profits.  Sounded great, but how wise is it for two doctors to try to run a bookstore?

It took us almost one year to bankrupt the store, and left me with a large, unsecured debt at the same time my daughter started college.  I worked 6 days each week, for about one year, to pay off this debt. Consider what I could have done with that income, if I applied it to my retirement, and saved it with interest for thirty years.

 

 

WHY START YOUR DENTAL PRACTICE TRANSITION TO RETIREMENT….. NOW!

  1. Any improvements to your systems and method of practicing dentistry will increase your enjoyment and ability to be profitable.  
    • This change will help you save more for many years and net your retirement a higher return.
  2. Planning your dental practice transition requires you to analyze what your situation is now, exactly what assets you have, and what you will need before you can make each successive transition.  
    • You must know where the finish line is before you start the race.
  3. Your final practice transition ultimately involves the sale of your dental practice.  
    • You must create something that a buyer wants to buy.  
    • This often takes many years and many developmental steps.  
  4. The sooner you start planning, the more likely you will be successful.
    • Building equity is something that takes time, so start now.

 

 

Unfortunately, I started later in my career.  I funded everything but my retirement: nice homes, great vacations, nice cars and private secondary school and colleges for my two daughters.  We also had beautiful weddings for them, but somehow my retirement fund was repeatedly deferred. I funded everything but my career. I did have money to buy nice homes, take great vacations, buy nice cars and I even paid for private secondary schools and colleges for my two daughters. But finding money for  retirement?! That is another story!

Luckily, in the nick of time, I attended a retirement planning seminar that showed me how bad my finances were.  I also learned how to formulate a plan to fully fund my retirement in the next ten years. It was hard work, but from that experience I had the Revelation about my financial situation, followed by finding the Road to implementation of my plan.  After blood, sweat and tears I finally ended up with the Result that allowed me to retire.

I would love to coach you through your Transition from the start of your practice to your Retirement party.  

To give you a snapshot of my journey and what is required for you to complete your journey go to our website: www.dentalpracticesolutions.com and the link to my e-book Here.

 

ABOUT Dr. David Black, DDS, FICD, FACD

Associate Coach & Consultant Certified DISC & EQ Trainer

Dr. Black owned his own dental practice for over 30 yrs. There he developed an understanding of the critical importance in development of the owner-doctor’s leadership abilities, in addition to having great clinical skills. Once he built a high-level of productivity in his dental practice, he was able to sell to a group practice; and the rest of his career as a dental practice owner is history.

In 2015, Dr. Black decided to share his knowledge to help other dentists duplicate his level of success, so he became a leadership coach and practice management consultant. His niche is treatment planning and case presentation.

Dr. Black is currently an associate coach and consultant, for Dental Practice Solutions, one of the leading consulting firms for nearly twenty years. As a seasoned practitioner, Dr. Black adds to the proven hygiene profitability coaching that Dental Practice Solutions is well-known for providing, to dental practices around the world.

Dr. Black’s expertise as an EQ and DISC trainer, makes him the best person to help more patients to say “YES!” to your patient care, as well as to enjoy working together as a team and loving what you do for your patients!

Schedule a FREE Profit Boosting Session Here today.