Many internal and external factors influence a sale or partnership. If you are considering whether It Is the right time to Sell My Dental Practice or my medical practice, think about both internal and external factors to help make a decision. This guide can help you with those considerations.
Internal factors
Internal factors include your personal needs. Some useful questions to consider when you’re thinking about a transition are:
- Why are you thinking about selling or transitioning?
- Is now the right time? How do you define the right time?
- What are your goals? Defining what you want can help discern if now is the right time
We find that if you are thinking about a transition, it is the right time because there is some factor – whether you can pinpoint it or not – that has prompted you to consider the transition.
The internal factors we hear the most often are:
- I’m sick of the rat race.
- I’m tired of hiring and firing.
- I’m tired of the uncertainty.
In the case of uncertainty, we often hear doctors say they can’t predict future revenues. Insurance pays the least it can, and Medicaid can cut programs randomly. Even if a doctor has patients who want the services, a doctor cannot control what he or she is ultimately going to get paid.
External factors
If a particular discipline, like dermatology or pain management, is being bought and sold by private equity – known in the industry as “where PE is heavy” – we advise that the present is likely a good time to sell.
In addition, do not always assume that the market will go up. If there is movement in your specialty, reach out.
When Not to Sell
- When you’ve made a recent investment.
Private equity-backed Medical Service Organizations (MSOs) and Dental Service Organizations (DSOs) won’t give you credit for something that doesn’t exist today. If you’ve invested in a lab or a building, let that generate cash flow and prove itself or you likely won’t get your investment back, and definitely won’t benefit from the upside.
- Your books aren’t in order
If you have an amazing value, location, and strong patient base, but have not been business-minded about your practice, don’t sell today. Get your finances in order. We can help by offering a first look or you can use this checklist as a baseline guide.
Summary
Whether or not now is the right time, get the process started because selling when you want to, not when you have to, gives you the most options. Desperation can negatively impact solid negotiations. If there is an internal factor pressuring you to sell fast, it limits your options and we might not be able to get the best deal, all other factors being equal.
Even if your books aren’t in perfect shape, reach out and get comps as soon as five years ahead of selling. If you want to maximize value by preparing your practice, reach out now. We offer potential clients complimentary preparation plans as early as 3-5 years out from selling.
