THE RIGHT TIME TO SELL YOUR PRACTICE
Last month, I discussed how to maximize the value of your practice, and the strategy I shared could make a difference of up to $10 million in your last 10 years of practice. This month, I want to address the question of when you should sell your practice, which really depends on how you think about retirement.
The typical endodontist works four or five days a week in their practice and probably takes fewer weeks of vacation per year than most dental practitioners. That’s because endodontics is largely driven by urgent cases. Unlike other specialties, our referring doctors can’t delay referrals, so if we’re away on vacation too much then they are frequently forced to refer to other endodontists, and that puts our whole referral relationship at risk.
Worry, stress, exhaustion, and burnout take a real toll after 25+ years feeling locked into a schedule with no flexibility. So, a lot of endodontists plot their escape through the earliest retirement date possible. That puts a lot of pressure on their financial situation for retirement in three ways:
- First, they are shortening their “earning years”, which means they have less time to accumulate the wealth that will sustain them through retirement.
- Second, they are lengthening their “retirement years”, which increases the amount of wealth they need to retire.
- Third, they become much more vulnerable to market risk and fluctuations because their investment timeline is shortened before they begin drawing down on their balances.
No wonder practice value is a sticking point for so many doctors, especially if they are trying the thread the needle financially to retire earlier.
There is a better way, which is to “retire-in-practice” rather than slavishly working to the bitter end and selling out when you’ve reached your limit. Instead, you enhance and extend your operational value while creating the flexibility and freedom to enjoy your life to the maximum.
Here’s how it works: If the typical endodontist grows their practice (by improving efficiency and marketing) from about $1 million in revenues to about $1.5 million, they have expanded their referred case flow enough to support an associate. With an associate in place, you can ensure the practice is available for emergency referrals every day of the week, every week of the year. That means you can reduce your days from over 200 per year to around 135 days (3 days per week with 10 weeks off per year).
Because you’ve increased case flow and efficiency, each case is more profitable. You’ll complete as many cases in 135 days due to efficiency improvements, and you’ll be taking home more income. At the same time, you’ll be able to pay your associate well, keep them happy and they will stick around. You’ll earn some profit from their cases too. More importantly, your life has been transformed and all your stress removed.
Endo Mastery coaching clients can usually get into this favorable situation in a year or two, and some in less than year. It can be done at any age: 60s, 50s, 40s, 30s. In fact, we are working now with some new endodontists opening new practices and giving them the coaching and plan they need to be debt-free, highly profitable, and maximum lifestyle within a few years of graduation.
Once a doctor has “retired-in-practice” then they can easily continue that indefinitely. There is no timeline to sell the practice. It becomes a money machine that you can hold onto as long as you want. When 135 days is more than you want, then reduce to 100, or 80 and expand your associate capacity accordingly. When you’re ready to stop treating patients altogether, just go into the office for a day or two per month for performance management.
The two things that they say you cannot buy are time and health. Retiring-in-practice allows you to reduce your days and create an exceptional quality life for yourself and your family. It eliminates your stress, significantly increases your income, and gives you the freedom to enjoy the adventures of life, maintain your health and fitness, and extend your lifespan.
Don’t give up your life to dentistry when you are young! Endo Mastery coaching is probably one of the few things that give you more quality personal time as a practice owner while increasing your income significantly. If you ask any Endo Mastery-coached endodontist, they would tell you that Endo Mastery coaching has been the single most beneficial investment they have ever made from a personal and professional stand point.
If you’d like to understand more about this strategy, I encourage you to schedule a complimentary practice analysis discussion with Debra Miller, Director of Coaching, at the link below: