Traditional wisdom says to work your whole life and sell your business when you are ready to retire. Although, many buyers of dental offices and medical offices are corporations or private equity firms. These firms have a different model than an individual buyer. Corporations place a huge emphasis on the current dentist or doctor. Ideally they want that individual to stay on as long as possible. Moreover, the office has the highest value when the practice is peaking in value. In other words, it might make sense to sell your office much earlier than you thought in order to get the most value in return for selling your practice.
Medical and Dental Practice Business Value
In many cases you can get 70-80% of the value of the business, keep working up to 10 more years and draw a hefty salary and not have to worry about the mundane headaches of running the business. Then when you are ready, cash out the remaining 20-30% of value. All of the economic experts are predicting a rise in capital gains taxes which could be significant. So getting 70-80% of the value now while taxes are lower and continuing to work without pressure may be something to consider! Not every office will meet the criteria of a corporate or private equity buyer but the right broker knows how to determine if you are a candidate for this type of sale. Size, location and type of medical practice all factor in to this determination. Even if you are remotely considering selling it makes sense to receive a “free” consultation to see where you stand.