Are you considering retirement in the next few years? Or maybe you don’t have immediate plans to transition out of your dental practice, but the thought of leaving your career is overwhelming. If you’re unsure where to start, a good idea is asking the dentists who have been there.
We’re continuing a series where we look at some of the advice our former clients and guest blog authors have given us to share with readers. Our last post was about treating retirement as a learning process and preparing for it with the same attention and vigor as your dentistry career. This post, a former guest author shared how goodwill can impact the dental transition process, and how to preserve it leading up to and during a practice sale.
Retirement Lesson 2: Protect the Goodwill of Your Dental Practice
The most valuable component of the price of a dental practice is the portion allocated to “goodwill.” Goodwill represents the intangible assets of a business—the difference between an established, successful business and one that has yet to achieve success. In an established dental practice, goodwill consists largely of the name, reputation and skill of the dentist and team, which have led to a strong, loyal patient base and consistent inflow of new patients. For the buyer, goodwill greatly increases the likelihood of continued cash flow from retention of that patient base and from new patients.
For you, the seller, preservation of the goodwill of your practice is paramount to a successful transition. A young dentist who purchased an established practice in Southwest Florida recently said, “The goodwill of the seller in my transition was priceless. His vote of confidence to our patients has increased retention and allowed me to succeed on a level I never would have been able to do otherwise.”
Keep on Building Goodwill
In order to assure that you retain goodwill not only prior to selling but also through the critical transition time during and after the sale, you should maintain your reputation and good name within the practice and community at all times. Through the transition process and even afterward, remain involved in study clubs, the local dental association, community organizations and volunteer groups such as Rotary.
This not only will help ensure that you receive proper compensation for your years of practice building, but also that your buyer receives full value. Even after you retire, positive support and praise for the new dentist (such as in social settings) will go a long way toward continued retention of patients in the new practice.
Takeaways from Dr. LoGrippo
Dr. LoGrippo’s point about protecting one of the most important assets can go a long way in a successful dental transition process. Throughout your career, you are building the goodwill of your personal brand as well as the value your dental practice brings to patients. This asset is what gives your buyer the confidence of future success, and therefore, the confidence that you as the seller will get an excellent ROI on your practice sale.
His advice on maintaining goodwill throughout the transition process is helpful, because it is something that can easily get lost in the shuffle of just trying to get things done. For more information on goodwill and dental practices, click here.
Do you have questions about retirement or the dental transition process? Contact Ellen Dorner to set up an initial conversation.