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A Healthy Future: Strategies to Add New Owners and Plan for Retirement

There has been a recent increase of new owners entering dental practices – either to take over the practice from a retiring owner or to add to the existing owners to help manage a growing practice.

Preparing to transition to new ownership can be a daunting task with many nuances. Here are some tips for a successful ownership and retirement transition.

Add New Owners Seamlessly

A new owner is a big change for any practice. Follow these guidelines to help facilitate a smooth transition.

Prepare Practice Insights

Be ready to share practice information by gathering the relevant details that potential new owners will find pertinent. A robust portfolio of information will help potential owners make an educated, informed decision regarding ownership of your practice.

Facilitate Smooth Introductions

Plan the introduction of the potential new owner to all the important people of the practice. Smooth introductions to staff, patients, and professional contacts are key to maintaining continuity. Having a plan for what the current owner and potential new owner will share before, during, and after the transition is vital.

Engage Trusted Advisors

Your attorney, CPA, banker, and insurance agent should be kept in the loop throughout the process and are a valuable resource as you plan for a transition.

Involve the New Owner

Involving a potential new owner in management decisions and practice activities helps develop their business acumen while you’re there to guide the way. It is also an opportunity for you to evaluate and assess their compatibility with the practice.

Develop a Transition Timeline

Whether you’re selling the practice or just bringing in a new owner, you need to discuss and determine a realistic timeline. This can range from a few months to several years. Setting the timeline upfront will help avoid any confusion or misunderstandings later.

Clarify Roles and Expectations

Determine associate expectations and clearly communicate their roles and responsibilities during the transition and beyond.

Develop a Fair Profit Distribution Formula

If your practice has multiple owners, create a compensation formula to fairly distribute profits.

(Download Video Transcript)

A Smooth Transition Into Retirement

Now that you’ve made the decision to retire, what comes next? These tips can help make the transition away from practice ownership easier.

  • Make Sure You’re Ready for Retirement: Many times, being financially ready is the focus for retirement. It’s also important to make sure you’re mentally prepared for the mindset shift and lifestyle change that comes with retirement. How are you planning on spending your newly found free time?
  • Stick to the Established Timeline: Dragging out the agreed-upon timeline will only serve to frustrate the new owner and others associated with the transition. Make sure to meet all deadlines.
  • Complete Expected Activities: Ensure all transition-related activities, such as patient notifications and legal formalities, are accomplished.
  • Post-Retirement Involvement: Define what your relationship with the practice and new owner will be once the transition is complete. Do you still want to be involved in the practice, and how much? Is a clean break preferred? Clear expectations will help you and the new owner move forward.

Successful Transition

Abiding by these tips will help ensure your desire for a successful practice ownership transition. Reach out to one of our professionals if you have any questions about transitioning your dental practice to a new owner.

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Biz Tip Topic Expert: Matt Vanderloo, CPA

Matt Vanderloo, CPA

Matt is the CEO of SVA, A Professional Services Company and a Principal with SVA Certified Public Accountants. Matt focuses on the healthcare, dental and veterinary industries. He assists individual and business clients by providing tax preparation and planning, as well as consulting and financial statement preparation.

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