Deciding to sell your dental practice is never easy. However, if you have considered it, you may realize you do not know the steps involved and what you must do next. Thankfully, you can depend on a Pasadena Dental Attorney to guide you through the transition process. Also, they can give you helpful advice to ensure you don’t make costly mistakes. Below are some tips you must consider when selling your dental practice:
Meet with a Financial Advisor
Before you decide to let go of your practice, confirm first if you can afford to sell it. Are you both emotionally ready and financially able to sell? As the financial markets experience instability, you may need to put off your plans for more years, or perhaps you may think that the proceeds of your practice’s sale will improve your lifestyle after retirement.
Talk to Your Accountant
Depending on the kind of legal entity or corporation you formed, a dental practice sale has different tax consequences. For instance, for a C corporation, some issues need to be addressed. These include allocating goodwill between yourself and the corporation and the tax efficiency of future sale. Your accountant can provide you with information on what you can retain following the sale, which is an important consideration when you decide to sell your practice.
Get a Comprehensive Valuation of Your Practice
A broken can prepare a certified valuation for you, usually crediting the valuation fee against the sales commission. A certified valuation considers a full valuation of your practice’s physical attributes, including its office, location, and equipment. Additionally, it should consider intangible assets and goodwill, which usually make up a huge part of the assets of your practice.
Continue to Operate as Usual
Just because you are selling your practice does not mean you can slow down or choose to be open just a few days per week. When you do this, you may not accept as many new patients as you used to. This will hurt the value of your practice and make a buyer less interested in acquiring. No buyer will ever want to purchase a declining practice. Also, not operating, as usual, can harm your gross receipts and your practice’s sale price.
If your practice involves some associates, ensure they have an Employment Agreement that contains a restrictive covenant and non-solicitation clause. Or you can consult with a lawyer if you don’t have an existing agreement. You may need to have your associates sign an agreement for extra compensation that protects the value of your practice.
