Chase Howard will present this live lunch n’ learn webinar for attendees interested in learning more about how to effectively prepare for the sale of their dental practice. He will cover issues like who and when to contact when considering a sale, proactive steps to lessen business disruption, when to tell your employees, and other important transition topics.
Preparing your dental practice for sale is quite possibly the biggest decision one can make! Understanding the legal landscape, the investment trends and options as well as what can optimize your business’ sale is essential. This webinar platform provides attendees to ask questions and chat directly with a highly qualified health law attorney.
Those in the practice of dentistry today have many options when it comes to building a practice. Should you work for an employer? Build your own? What about buy a practice? More and more, we see young dentists wishing to avoid private equity and buying out a retiring dentist’s practice. The amount of regulation imposed upon those entering into the dental practice arena can be staggering. Further, buying a dental practice requires many considerations that are unique to other areas of business. Understanding the purchase process will help protect your investment and could keep you from experiencing any unnecessary liability.
First, organize a team of specialized dental experts, such as a dental CPA, Professional Practice Lender, dental law attorney, and a practice consultant. Having a team of professionals guide you through all aspects of the deal will keep you on track, avoid potential issues, accomplish specific task items, and properly comply with any legal considerations.
Thinking about selling a medical practice? Here are some steps for preparing your business in advance of a transaction.
Visit your financial planner.
Be sure that you can afford to leave the business, if you are retiring. Most times, buyers will require a comprehensive non-compete and you should be absolutely certain that you are financially prepared to retire or sell before you sign that restrictive covenant.
Visit your accountant.
Get your financial history in order. Review and re-review your tax returns and profit statements for the past three years to ensure that the business is appropriately reflected in those records. Take the time to clean up any “creative” bookkeeping so that the buyer is given a complete and accurate picture of the business they are buying into. You are likely going to have to make a representation that your financial disclosures are true, so take the time to get comfortable with that representation early on.
Private money (e.g. private equity) is in full swing purchasing medical practices with large profit margins (e.g. dermatology). This is NOT the same thing as when physician practice management companies (PPMCs) bought practices the 90s. Back then, the stimulus for the seller was (a) uncertainty re practice profits in the future, and (b) the stock price. Selling practices got some or all of the purchase price in stock, with the hopes the purchasing company stock would far exceed the multiplier applied to practice “earnings” (the “multiple”). Buyers promised to stabilize and even enhance revenues with better management and better payer contracting. If the optimism of the acquiring company and selling doctors was on target, everyone won because the large stock price made money for both the buyer and seller. The private equity “play” today is a little different.
Today’s sellers are approaching the private equity opportunity the same way they did with PPMCs, except for the stock focus since most private equity purchases don’t involve selling doctors obtaining stock. Sellers hope their current practice earnings will equate to a large “purchase price.” And they hope the buyer have better front and back office management that will result in more stable and even enhanced earnings. And for this, the private equity buyer takes a “management fee,” which they typically promise (though not in writing) to offset with enhanced practice earnings.
Health law is the federal, state, and local law, rules, regulations and other jurisprudence among providers, payers and vendors to the healthcare industry and its patient and delivery of health care services; all with an emphasis on operations, regulatory and transactional legal issues.