Exit Strategies & Estate Sales

Coming soon to a Spectrum Dialogue October 2009 Issue

Written By: Nadean Burkett

Practice ownership transition is challenging at every stage of one’s career, however it is truly a matter of degree. We’ve talked about successor planning in previous articles which focused on Associate buy-in/out options, partnerships, etc. as part of practice management. As humans we fear the unknown – transition issues are one of those unknowns which is why most practitioners choose not to deal with preparing an exit strategy. It is challenging for everyone to consider the underlying meaning of this – death or disabling medical condition. From experience, I can state that there is none more difficult than the posthumous transition. The truly unfortunate aspect of this is that it is the family, the survivors, who are left to deal with the situation at a time that they are also struggling with the loss of a loved one. Usually the surviving spouse has little knowledge of the practice or who to turn to at a time that they are most vulnerable.

There is a deadline to transition ownership of a dental practice – usually six months. That being said, as we all know the most valuable asset in any practice is the goodwill; represented by the people – patients and employees. The goodwill value may evaporate quickly when a dentist passes away or has a serious medical disability which prevents him (or her) from being a visible and active part of the transition. I say “may” because this is not necessary – there are strategies and solutions that can be employed by practice owners to mitigate the problem.

As we have discussed on many occasions the solution is simple, have an exit strategy. The problem for most people is that it is not easy. It’s not easy to confront our mortality. Age is irrelevant. Whether you are 35 or 75, we have to accept we can be victim to the one certainty in life - death. From day one of becoming an owner, there should be a realistic successor plan in place.

For the full length article, some helpful tips, suggestions and other articles, visit our educational website for more details on how you can prepare yourself and your practice @ www.edu-dent.com. Visit www.dentalbusiness.ca for practice listings, associate positions and much much more.