If you own your own dental practice you will eventually be faced with succession planning issues, so it’s just good sense to develop a plan now instead of waiting until the last minute when so much could go wrong. With a little help, you can craft a thorough plan that not only takes your wishes into consideration, but also the wishes of your family members.
Success Planning Options For Your Dental Practice
When considering your options, there are really only four alternatives from which to choose. You can:
- Transfer the business to the next generation of dental professionals in your family.
- Sell your practice to members of your management team.
- Form an employee stock ownership plan, or ESOP.
- Sell your practice to an unrelated party or liquidate your assets.
Since these options each have numerous, complex issues, they need to be carefully analyzed to determine the best course of action.
It’s How You Start That Matters
Unless you are in the midst of a personal or professional crisis, you probably have no sense of urgency to begin your succession plan, which makes it easy to avoid starting the process altogether – the thought of facing difficult tax and legal obligations isn’t much of a motivator either. But succession planning doesn’t have to be that difficult, especially if you know where to start and what questions to ask.
In order to achieve your desired exit plan you need to prioritize the succession planning process well before your desired time to leave your practice. Work on answering important questions such as:
- What am I going to do with myself after I leave my dental practice?
- How much money do I need from my practice to retire?
- How will my decision about an exit impact my family?
- How can I be sure the practice will survive without me?
People and situations are different and complex – and there is no such thing as one right answer. Similarly, there is no such thing as a one-size-fits-all program that will guarantee that you will be able to exit on your desired terms. The good news is that if you take time to think about (and answer) the questions above you are well on your way in the process of determining your ideal succession.
Dental practice owners who fully understand their succession options, set a course of action to implement the plan and seek assistance to ensure the plan is being implemented as desired have the best chance of seeing optimal results.
So, are you ready?