Building a successful dental practice takes decades of hard work and commitment. The payoff will be years of comfort, but only if you carefully craft a retirement plan. If you want to sell your dentist office, a critical first step is outlining your future.
Letting go of your life’s work is an emotional decision that won’t happen overnight. It takes careful planning and considerations to ensure a safe future for you and your loved ones. Here are a few things to consider for your retirement plan.
Your Spending Will Stay the Same
To maintain your lifestyle during retirement, it’s safe to assume you will continue to spend 80% of your previous income. For example, if your annual income was $150,000, your average spending after you leave the profession will be roughly $120,000.
While in practice, almost all your daily expenses have been decided based on your pre-tax income. Necessities like health insurance will need to be factored back in once you sell your dentist office. By having a clear understanding of your future spend, it’ll be easier to develop a retirement plan.
Fluctuation in Valuation
When determining your practice’s valuation, three factors come in to play: the methodology, date, and purpose of sale. However, the market’s demand serves as the greatest factor in the value of your practice. Today, baby boomers who graduated in the 1970s-1980s are beginning to retire. This results in a greater supply than that of twenty years ago.
Because of these variables, dental offices may only sell for a portion of annual revenue. In fact, your final sale price can range anywhere from 55% to 95% of your total collections. For example, a business whose total annual revenue is $600,000 may only sell for $450,000, or 75% of collections.
You’ll Always Be Busy
If you think that you’re too busy growing your business to worry about your future, you could suffer when it’s time to hang up your hat. Time can be your biggest ally or enemy when it comes to preparation.
If you avoid organization or attention to details, a plan may never come to fruition. Work with a dental transition specialist to craft a retirement plan that fits your business and lifestyle. A concrete plan for your future works as a roadmap to success. Without one, you won’t know what life after dentistry holds.
Work with a Dental Transitions Firm
The thought of mapping out a retirement plan can be overwhelming, especially while you’re trying to keep your business up and running. Partner with a company that specializes in this type of change, like U.S. Dental Transitions. We we’re founded by a dentist with more than 25 years of experience, so we truly understand the complex, emotional and financial ramifications of perhaps the biggest change in the life of a practitioner. If you intend to continue your legacy by selling to a dentist who will honor your desire to care for your patients and staff, we’re confident we can connect you with a buyer that can meet your selling criteria.
Contact us at 678-482-7305 or info@goUSDT.com. Any information you share will be kept in the utmost confidence.