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Exit Strategy For Physicians/Dentists
Who Plan On Retiring Or Selling Their Practices
Many physicians and dentists let their practices go sideways because instead of having an exit strategy to sell or retire, they simply reduce their workload by reducing the number of workdays and patients. However, by reducing their workload they also significantly reduced the selling prices for their practices.
Yet, that is not the whole story; they are also making it nearly impossible to sell their practices at all. A buyer who is willing to pay a premium to purchase a practice is looking to take over a viable practice, not one that they have to work hard to revive and build up. Couple that with the fact that the selling price is predominantly based on a practice’s gross revenues and/or net profits and you will realize that without an exit strategy you will stand to lose hundreds of thousands of dollars, if not millions, depending on the size and value of your practice.
If you are a dentist or a physician who is planning to retire, the time to plan your exit is about 2-3 years before you actually retire. There are a number of options that allow you to plan ahead and retire without losing the value of your practice so you can better enjoy your retirement.
But even if you have already reduced your workload there are options that will help you maximize the value of your practice. One strategy is to merge the practices of the medical professionals with the same or complimentary practices. The net effect is that those medical professionals can each continue to work 2-3 days a week, however, the gross revenues will be accumulated and reported under the same company. So, when you decide to sell your practice 2-3 years after the merger, the reported income for both practitioners will be combined and reported for the same company.
Essentially, the potential buyer will be buying one practice, which has had two medical professionals working in it. The obvious benefit for a potential buyer is that in exchange for paying the purchase price, they will be buying a practice that is either fully booked or close to being fully booked.
Think ahead if you are contemplating selling your practice and/or retiring so you can maximize the value of your practice and its selling price.
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