Practice Transitions
What’s Your “Endgame”?
Once your practice is operating, what’s your “endgame?” In the past, following decades of treatment, an owner would bring on an associate and end up selling the practice.
Today’s dental practice transitions couldn’t be more different. DSO’s and private equity groups, along with large multi-site private practices, are all eagerly expanding. A financially healthy practice in a great location is worth many times its annual production volume. This is called the multiple, and it could be the key to your ultimate financial success, in some cases amounting to ten times your original startup budget.
Achieving a high multiple takes years of top-notch treatment, marketing, and operational efficiency, but can be achieved with the right planning and processes. Work with a dental financial specialist to develop your goals early on and take the steps you need to reach your own personal vision of success.
Successful Exit Strategies
An exit strategy is a plan for dental practice transition – ownership or leadership of a business. For dental practice owners, developing a thoughtful exit strategy ensures that when the time comes to retire, sell, or transition out of the business, the practice remains financially secure, operationally stable, and prepared for the next phase. Here’s a step-by-step guide to developing a robust exit strategy for your dental practice:
Grow Your Earnings Before Interest Taxes Depreciation and Amortization – EBITDA
EBITDA growth is crucial as it indicates a company’s ability to enhance operational profitability independently of financial and tax decisions. It boosts investor confidence, improves valuation, supports debt management, and funds future expansions, fostering resilience and strategic flexibility in challenging economic environments.
Encourage dentists and dental specialists to consider maximizing their practice’s financial performance (Add a Zero to your EBITDA) and valuation to prepare for a successful sale or partnership. Allow them to continue practicing while delegating business complexities, focusing on patient care, or transitioning to roles like teaching or speaking engagements. Suggest leveraging expertise and experience to contribute to the dental community while enjoying financial benefits and personal fulfillment beyond traditional retirement.
What Our Clients Say
It is with complete confidence that I can recommend Derek Leonard and his team to sell your practice. He is honest, competent, thorough, and committed to providing great service to his clients. The comfort of knowing that Derek and his staff took care of my multi-office (8 locations) practice, which I worked very hard to build, put me at ease through a process that I know can be extremely difficult.
Since 2003, Mr. Derek S. Leonard and American Business Consulting have provided me and my practice with invaluable consultation as I transitioned from a 2nd year dental specialist student to the ownership of my first specialty practice. Mr. Leonard was solely instrumental with the identification and negotiation of a brand new built-out specialist facility that was previously vacated by the proposed lease during the economic downturn that essentially saved me more than $180,000.