If an unexpected incident occurs in your life, do you have a plan for your dental practice? As an owner, it’s imperative you take the initiative to craft a backup plan in case an event should occur.
Working with a dental transitions firm ensures you’re prepared for the future. Taking a few of these initial steps ensures that your practice’s future is secured.
What’s the Value of Your Practice?
All too often, owners get their practice appraised only when it’s undergoing a transition, but this is a risky misunderstanding. If you want to set your legacy up for success, understanding and documenting the practice’s value is critical. Your practice is probably your main asset, and in this case, ignorance is not bliss.
Get your practice appraised annually or every few years at a minimum. The purchase of modern technology or steady incline in patient growth likely means it’s worth more than when you started. Finally, and most importantly, document its value and share this information with appropriate personnel and trusted advisors.
Craft a Detailed Letter
After an appraisal, write a detailed letter to your successors informing them what to do should an unexpected event occurs. The letter outlines an action plan for selling your practice. In fact, following the death of an owner, a dental practice should be sold within one to two months; otherwise, the value quickly diminishes. This letter will also come in handy if you lose the ability to make sound business decisions.
Action steps are important, but you’ll also need to clearly identify who is responsible for each task. This group includes attorneys, accountants, investors, advisors, vendors, and your practice Transition Advisor. Also, record your insurance agent’s name, as well as any life insurance or disability policies in place.
A Practice-Specific Codicil
In addition to your will, be sure to draft a codicil or a supplement, specifically for your practice. This gives clear instructions for what to do in the event you can no longer manage your business. This document determines the person who will “take over” the practice upon your departure.
Without a codicil, you may cause accidental turmoil for your staff and family, and devastate the value of your life’s work. This decision is up to you, but it is recommended to pass the baton off to someone outside of the family. If a tragic event occurs, your family will be responsible for handling other emotional decisions, so leave this task to a trusted advisor.
Work with a Dental Transitions Firm
As a business owner, it’s important to be proactive with the future of your practice. The best way to prepare is by partnering with a dental transitions firm like US Dental Transitions. Our company was 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 we share will be kept in the utmost confidence.