Doctor’s Choice Practice Transition LLC Principal and Broker Associate Greg Jones
When a dentist suddenly passes away, their spouse or family faces personal and professional challenges. We deal with this situation multiple times per year, and while we have tried to get in front of dentists to have a more detailed plan of action in this circumstance, it is human nature to have the mindset that “it won’t happen to me.” Our suggestion is for you to select a dental practice broker in your area who has an outstanding reputation, multiple references and testimonials then list out their contact information somewhere for a loved one to find alongside this article in the event of the unforeseen.
Your family will need to have a structured approach to handling the situation, balancing the need for clear, practical steps with sensitivity to the emotional difficulty of the circumstances. This article will serve as a vital roadmap to alleviate challenges and optimize the sale outcome.
Time is of the Essence
Seek emotional support and give yourself and the team members of the practice a few days to grieve the loss. During this difficult time, we have to learn to balance emotional well-being while also making business decisions to maximize the sale of the business. The more time that goes by, the less the practice is worth. If the practice is not sold within 60 to 90 days, the value of the business becomes nominal.
The first step is contacting a broker specializing in dental practice transitions. They can guide you through the immediate necessities, including:
- Putting together a plan of action
- Valuing the business
- Connecting you with trusted advisors
- Helping you find a temp dentist to work the practice until sold
Keep the Practice Open
After the dentist’s passing, you will want to notify the team members immediately. Clarify that they are still employed with the practice and do not need to find another job. It is important they know that you plan to keep the practice running and that you will find another doctor to take over the practice so that they will be vital to their success. If you cut hours or pay, they will more than likely be inclined to leave the practice, which hurts the value of the business. If possible, retain all the team members to keep familiarity within the practice. The team members are the only remaining known to the patients.
A dental practice broker should be able to find a dentist to help work the practice for 30 to 60 days while they locate a buyer. In an ideal scenario, the practice will be able to at least break even after paying the overhead of the practice, which includes compensation to the temp dentist. If not, this further stresses the need to complete the sale sooner rather than later, as the family will be spending money to keep the practice going until the sale is completed.
A significant pitfall we oftentimes see is that the family finds a local dentist with their practice nearby to see their patients until a buyer is found. This can cause concern in the eyes of any prospective purchaser that patients sent to this local dentist, who may not return to the selling practice, giving them another reason to attempt to lower the purchase price or not purchase the business at all.
From here, you will need to plan out a communication strategy for notifying patients. We recommend that the staff and family keep the passing of the doctor under the radar for as long as possible. If the word gets out to the community and patients, the likelihood of patients finding another dentist due to the uncertainly of who will be taking over the practice increases. We recommend telling patients that there is a family emergency and that “Dr. Doe” will be caring for our patients at this time. Notice to the patients about the selling doctor passing should be addressed when you introduce the new doctor via a transition letter done post-closing. With that said, if a patient gets wind of the situation before you’re ready, the team should be prepared to confirm the news and reassure the patient that you are looking for a dentist to continue the quality of care in the practice.
Finding a Motivated Buyer
In this situation, your highest offer may not be your best offer, as finding a buyer who can close quickly and is financially qualified is of greater value. Utilize your broker’s market knowledge and expertise to help you evaluate any interested parties. If a buyer takes 30 days to conduct their due diligence, and then does not close, that could cost the family one month of overhead and, more than likely, a lesser purchase price. As more time passes, the risk of word getting out to the community increases, and, in turn, so does the likelihood of more patients requesting their records to be transferred to another dentist. The longer the practice goes unsold, the value continues to drop, and the less money your family will receive from the sale.
Each situation is unique, and the steps above may need to be adjusted to fit your circumstances. It’s crucial to consult with professionals who can provide personalized advice and support during this challenging time. If you are in a rural area and cannot locate a buyer, and closing the practice is the only option, consult with professionals to do so in a manner that is respectful to patients and staff and complies with legal and professional standards.
Greg Jones earned his bachelor’s degree in interdisciplinary studies from Florida Atlantic University. He is the principal and broker associate at Doctor’s Choice Practice Transitions LLC.
Mr. Jones will present the course “Are You Ready for Ownership or Retirement? Start Planning Today!” Friday, June 20, 2 to 5 p.mm at the Florida Dental Convention. This course is free for FDA member dentists. Learn more and register at www.floridadentalconvention.com.
Beyond the Bite 