Right now, over the next 12 to 18 months, may be the perfect time to sell your dental practice. Even if you are not in the market to retire, you can sell your practice. Many dentists sell their practices so they no longer have worry about owning a business and providing for several staff and their families. Selling a practice can give dentists an opportunity to work as professors or to simply just practice their crafts. Selling a practice often leaves dentists in a comfortable financial situation. With approaching challenges, like Obama-care, many dentists are selling because recent dental school graduates are able to get good lending rates to buy well-established practices.
At one dental society meeting, a speaker informed the crowd on the approaching economics and Obama-care programs. This speaker explained that veteran dentists will not benefit from the approaching changes, especially relating to Medicaid, Obama-care, and dental insurance. The speaker explained how states that have fewer insurance companies will have more financial problems in regards to changes in dental insurance pay structures. Big box stores will be requesting bids to have dental offices placed into their shops; many of the big box shops are creating educational partnerships with prominent dental schools to direct dentists their way. By working in a retail organization, the recent graduates are able to get around limiting statutes in many states. Emory University has created a partnership with CVS pharmacy and nurse practitioners, as well as with Medicaid and insurance companies. Strangely, even though most people will soon have insurance, they may only be able to use it in retail clinics that are able to charge lower rates than private practitioners can. This is why traditional dentistry practices in many municipalities and urban / sub-urban areas will be challenging to maintain.
Another good reason to sell a dental practice is because of medical hedge funds that are well-managed and buying up practices. As the stock market and real estate markets have dropped in the past decade, alternative financial management companies have grown, especially in large cities like New York and Chicago. Medical practices are often lucrative for these hedge fund managers and their investors, so investors put their money into medical and dental practices, especially when they can get several dentists into one large group. On paper, the dentist may own the practice, but the medical hedge fund maintains the business. These businesses have large marketing departments and small practices cannot always financially compete. Sadly for the managed practitioners, the profit often goes to the investors, while the dentists maintain a moderate salary.
Banks are also in the business of making money, by selling it. And, they are currently lending to dentists and giving them exceptional rates. Dental practices are seen as low risk ventures, so banks realize they can make good money because dentists pay their bills with strong industry standards. Also, with the rise of private investment capital groups, dental school graduates with sizable school debts are having fewer hurdles when it comes to obtaining financing and acquiring dental practices.
Dentists are also able to find educational positions in universities and medical programs all over the country. Veteran dentists are wanted at dental schools because of the maturity and experience in the field. Many dentists are also graduating from military programs. With the influx of new dentists, many are finding that the demand for buying practices is higher than the practices that are currently being offered for sale, making it a favorable season for the sole dental practice owners to gear up to sell in the next few years.
If you have been contemplating putting your dental practice up for sale, you should consider doing it sooner rather than later. Traditional dentistry will see a large change very soon and maintaining the traditional business model will become more challenging. Selling a dental practice wisely and timely can leave a dentist with a comfortable lifestyle and a low-stress season of life after full-time practice. There may not be an economic climate offering this much to veteran dentists ever again. You can easily continue to work as a dentist, but without the worry the business end of the solo practice model carries.
This post is written by Aaron Schulman who is on the advisory board for 5th Avenue Acquisitions & Venture Capitalists, who works with both buyers and sellers of dental practices as seasoned dental transition consultants. They are a dynamic group of professionals who have helped countless dentists buy and sell practices throughout the U.S. For more information on dental practice transitions and very competitive dental practice financing options you can visit them at www.5thaavc.com.