By Erick Rupprecht, DDS
Hey doctor — you’re 55 years old with 30 years of practice experience. Your practice timeline has you 10 years from retirement. So here’s the big question: How are you going to maintain the value of your practice until the time comes to hang up the handpiece?
First, understand that your practice is worth what someone will pay for it — and what you do over the last 10 years of your practice can affect that price dramatically. Here’s a useful action checklist for your last 10 years in practice.
Act as if you don’t have 10 more years! No matter what your age, get a practice valuation and get it updated annually.
If you are practicing as a “C” corporation strongly consider changing to become an “S” corporation. “C” corporation practices run the risk of being double-taxed on their annual profits, as well as on future practice sale proceeds.
If you are planning to increase your production/collections, take steps to increase your active patient count. Keep the flow of new patients coming. Your production must remain level or slightly on the incline (at least).
Continue to attract and accept new patients. A higher patient count and a higher new patient flow both add value.
Keep your fees current. It’s often impossible to raise fees all at once after not raising them for years. We’ve seen potential practice sales fail because of this problem.
Improve your media profile. Have an attractive website. Have an active Facebook page. A multifaceted media presence will broaden your appeal to several demographics.
Upgrade your essential technology. Technology will help you put your best foot forward to purchasers. The value of your practice will be diminished if it isn’t current.
Improve your office aesthetically. If you are a cosmetic dentist (and advertise as such) let your office reflect that cosmetic emphasis.
Cultivate your staff. Invest in them even as you keep your salaries near market level. A professional dental staff adds value to the sale price.
Acknowledge any geographic challenge your practice might have. In smaller cities and rural towns you may in fact have practices that are significantly more profitable than your city counterparts. Despite such profitability, finding a purchaser can prove to be much more challenging for small-town dentists.
Keep your practice value strong. In 10 years that strength will help propel you to a better life outside of dentistry!
