Smart Retirement Planning for Dentists: Sell Now - Retire Later

Deciding on the right time to put your dental practice for sale can be a daunting experience. While it may seem logical to wait until you’re ready to retire, the truth is that selling your dental practice earlier can have a positive impact on your retirement funds.

Selling a dental practice, on your terms, not only makes your practice more attractive to potential buyers, but can also ensure you obtain the best price. Unfortunately, personal problems (such as divorce or health issues), shortage of capital, business problems and dentist burnout could force a dental practice sale before you are ready – causing a decrease in the practice value.

Advantages of Selling Now

When buying a dental practice, buyers look for offices that are still in growth mode, not ones that are losing value. Unfortunately, as dentists look to retire, they may not put as much effort into growing the practice or patient base, which later is reflected in the sale price of the practice. One study by the ADA shows that dentists have a 42% decline in gross collections between 55 and 65 years of age. It’s much better to leave on a high point than to wait too long.

There are also emerging factors that will have a substantial impact on dental practice sales in the very near future - the most pressing of which is the rise in the number of retiring dentists and the decline in the number of dental school graduates. Also growing at a significant rate is corporate dentistry, which offers an attractive alternative to new dentists who would rather focus on work-life balance than deal with the added stress of owning and managing a dental practice.

If you are able to sell your practice when your practice is at its peak, you not only benefit from the maximum sale price but also have additional time to put cash from the sale into other investments. Waiting until you are ready to retire may mean a lower sale price, especially if you aren’t working as much in the practice as you are now.

As part of the sales package, you may negotiate to keep working for a certain number of years - ensuring predictable income for years to come. This arrangement also has non-financial benefits. Working in the practice, without being the owner, can eliminate some stress and allow you more time off to travel or pursue other hobbies and interests. The buyer benefits as well. By staying with the practice, you are able to train the new owner on how to run a successful dental practice.