Don’t miss an opportunity to lead your transition!
Way too often, we are guilty of following along our current paths, waiting on an event that forces us to change.
It’s difficult to remember how much time and effort went into starting and building your business, when you have been encapsulated in it for 30 years or more. That’s where I come in, to give an outside perspective as to the why, when, and how, to exit your business gracefully and profitably. The current financial climate with dental transitions is very good in 2014 and will continue for the near future.
As Sir Isaac Newton said, “For every action, there is an equal and opposite reaction”, this can be true in business as in physics. The economic recession of 2007/2008 is behind us now, leaving well experienced and financially secure young dentist looking to purchase a practice with positive cash flow and a solid patient base. The financial institutions have realized that dental practices, with their less than 1% failure rate, are a very good investment with extremely low risk. The dental industry lending, by large banks, has increased exponentially and forced lower interest rates and attractive terms. Some experts believe that greater than 90% of dentists graduating will purchase or have an equity stake in a dental practice within 5 years of graduation. With that said, 4,443 dentist graduated from dental school in 2003. Following traditional trends, these dentist wait on average 5 years, to set up or purchase a practice.
I would ask you to follow me on the following scenario.
2003 graduates waited until 2008 to start up, or purchase and existing practice, once the recession hit, everything is on hold for 4-5 more years. In 2014, it is safe to say that we should have twice the number of dentists looking to purchase if we follow historic trends. This is where it gets really good. The dentists that were considering retirement around 2008 saw their values and portfolios decline and decided to wait for the economy to come back. Six years later, the markets and accompanying portfolios have rebounded, real estate is stable if not increasing in value, banks are lending to dentists, and there are twice as many dentists with 5-10 years experience ready to purchase a practice. This is a lot to take in from just a blog post, but please feel free to contact us for a no obligation meeting or phone conversation and remember that “Timing is Everything!”
“Bad things aren’t obvious when times are good, after all, you only find out who is swimming naked when the tide goes out.”
Warren Buffett, 2001
Author: Russ Russell
If you have any questions or would like additional information, please call us at 678-482-7305 or email firstname.lastname@example.org