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Succession Planning for your Practice
Are you running a busy practice and contemplating retirement but concerned about letting your patients down? If so, then the biggest issue you need to address right now is succession planning.
This situation is not uncommon. You have long-serving staff, a full patient waiting list and younger, enthusiastic dentists. While you retain a passion for dentistry, you’re already thinking about reducing your hours and handing over some of the responsibilities of running the practice. So how do you ensure a smooth transition to retirement that takes into account both your financial interests and the ongoing wellbeing of patients?
A starting point would be a valuation to gauge the potential value that could be realised through the practice sale. However that’s only one part of a bigger planning process that needs to take into account a range of issues before a strategy to facilitate a successful transition can be developed.
What you need is a sound Succession Plan.
Like any good plan, you need a clear, achievable goal, then set out the steps required to get you there. This requires a clear understanding of all the factors that will contribute to the final outcome so that you end up with an informed view of the overall situation rather than an unrealistic expectation.
Here are the key areas for consideration with an abbreviated list of questions.
Structuring: Does the current financial structure of the practice lend itself to an easy transfer of ownership or does it need to be changed?
Dentist arrangements: What are the current arrangements for your employed or contracted dentists and what arrangements would you like to work under yourself?
Human Resourcing: Are appropriate contracts in place for key team members?
Financial: Is your idea of what the practice is worth realistic? Is there anything you could do to increase the value by identifying potential practice improvements?
Surgery: Is the surgery leased from a third party landlord or do you own it? Can you sell it to a third party?
Tax implications: How much tax is payable on the sale and how will you manage any tax impost? Do you qualify for any of the tax concessions that will minimise or eliminate tax?
Other matters: What is the timeline for sale? Are there any other options?
This is a process that shouldn’t be rushed because the conversation is about much more than what the practice could be sold for.
After the years of building it up, you now have an opportunity to secure the ongoing success of the practice and be rewarded for your hard work.
All you need is a plan.
Please don’t hesitate to contact one of our award winning advisors if you’d like to discuss Succession planning for your practice.