When you own a small business such as a dental practice, planning for retirement involves much more than putting aside money in a retirement account. Knowing the current market trends in dentist retirement is an important first step in knowing when to list your dental office for sale.
Statistics from the ADA specifically serve as an important signpost on the road to retirement.
ADA Statistics and Retirement Trends
The ADA reported on the statistics from a Dental Workforce study showing that as of 2015 the average age of dentists in the United States was 50 years old, up from age 48 in 2005. The study also found that the average age of retiring dentists in 2015 was 68, which is also up from the average age of 66 in 2005. These statistics show that while dentists overall are waiting a little longer to retire, that as many as half of all practicing dentists will reach retirement age in this decade.
Knowing that the market for dental practices may be flooded in five to ten years, it is beneficial to start planning and strategizing today for your retirement, so you don’t put your practice on the market at the wrong time. Your dental practice may be worth more today than in 2025 when more dentists decide to list their dental practices for sale.
Questions and Concerns About Retirement
Below we address some of the most common questions and concerns dental practice owners have when thinking about retirement. Even if you aren’t planning on retiring soon, it is a good idea to think through these questions and have a game plan for the next five to ten years.
What is my practice worth?
Finding your practice’s value is a complex process. You probably have heard of some general rules of thumb for valuations, but these estimations are not always accurate. Your best method for finding how much your practice is worth is talking to a dental practice transition specialist. Specialists, such as those at DDSmatch Mid-Atlantic, are experienced in these transitions and know what local market factors will play into your practice’s value. The experts at DDSmatch Mid-Atlantic, along with their dental CPA and business valuation strategic partners, will help you determine the local market rates here in Maryland, Washington D.C., and Virginia, so you can get the most value for your dental practice.
Should I add an associate?
Often dentists will choose a slow transition out of their practice by adding an associate who will eventually take over the practice. This is a good idea for dentists who don’t want to list their dental office for sale right now, yet do want to cut back on their hours while still keeping a presence in the practice. DDSmatch Mid-Atlantic can help you first determine whether your dental practice is ready to take on an associate and, if so, help you find the right associate. Whether you are planning for retirement, looking to grow your dental practice, or just want a little help, talk to DDSmatch Mid-Atlantic before looking for a dental associate.
Should I sell to a DSO?
A Dental Service Organization, or DSO, manages the non-clinical side of a dental practice. Deciding if you want to sell to a DSO is a personal decision. A DSO will relieve the headache of managing the business side of a dental practice and could make working in your practice more attractive for potential associates because they can often pay more than a private practitioner. If you find that you enjoy the clinical aspect of dentistry but not the business side, a DSO can be a good option.
However, many dentists who have built their business from the ground up find it difficult to think of their practice changing due to a DSO’s management. To learn more about the pros and cons of selling to a DSO, read this helpful post by a dental and medical law firm.
How do I find the right buyer?
If you do not sell your practice to a DSO, how do you find the right buyer? DDSmatch Mid-Atlantic helps dentists in Maryland, Washington D.C., and Virginia find the right buyer for their dental practice. The DDSmatch practice transition specialists use the Trusted Transition Process to determine your wants and needs and how much your practice is worth. Then, they will find a buyer that matches with the skills set and personality needed by your practice. Before you list your dental office for sale, contact the experienced transition specialists at DDSmatch Mid-Atlantic for a consultation.
What should I do to prepare for retirement?
If you’re planning on retiring in the next three to five years, it is time to start planning now. Talk to a financial advisor to determine if you have enough set aside to retire. Dental Economics has an excellent post about planning to retire on time. Next, find an experienced dental transition specialist to help you with the transition into retirement. They will guide you seamlessly through the next steps, so the years leading to retirement are a breeze.
What about my real estate?
When you put your dental practice for sale, that does not automatically include the real estate on which your office is located. If you own the real estate, you may want to sell that as well. The process is not difficult, but may change who ends up as a potential buyer, as they will likely need financing for both the practice and the real estate. Both parts of the transaction can often be closed at the same time, which can make it easier.
Another option is selling the dental practice while keeping the real estate and collecting rent. This post by DDSmatch Southwest goes into more detail what options are available to buyers and sellers in these types of transactions. Talk with your dental CPA and dental attorney about the tax implications and which option fits your lifestyle and your budget.
Do I sell now to get maximum value or wait?
This question can only be answered on a case by case basis since the values and trends of dental practices vary. However, based on the above statistics from the ADA, listing your dental office for sale before the market floods will help you get the maximum value. Talk to an experienced dental practice transition specialist with knowledge of the local market and they will be able to advise you whether to sell now or wait.
I have a partner who won’t buy me out, now what do I do?
Partnerships in dental practices can be beneficial for many reasons, but tend to get mucky when there is a transition and you don’t see eye to eye. DDSmatch Mid-Atlantic helps dentists who are selling their ownership, even if it is a part ownership. We find buyers who are specifically looking to buy into a partnership, so everyone ends up with what they want. For more information on how this process works, and to find the answers to more specific legal questions that may apply to you, set up a consultation today.
How do I find someone I can trust to help?
This is by far the most important question you can ask before you list your dental office for sale. You have spent your career building a thriving practice, and now you need to get the most out of its sale while leaving the kind of legacy you want. A dental practice transition specialist with local experience, many years in the business, and proven examples of successful transitions is what you want. For dentists in Maryland, Washington D.C., and Virginia, that is DDSmatch Mid-Atlantic. The specialists at DDSmatch Mid-Atlantic will take care of every detail and guide you through the transition process so you can retire with confidence.
Think Ahead about Retirement and Listing Your Dental Office for Sale
DDSmatch Mid-Atlantic can do more than just help you sell a dental practice in Maryland, Washington D.C., and Virginia. Using our Practice Optimizer Experience, we ensure you get fair value out of your dental practice and that you are otherwise prepared to enjoy your retirement. The Practice Optimizer Experience has everything you need for a successful dental practice transition, including:
- Conceptual Transition Experience: setting goals and devising strategies to put you on the path to your post-transition dreams.
- Trusted Valuation Analysis: There will actually be two valuations, the first at the beginning of the process. The second when you are ready to begin your practice transition.
- Dental Insurance Navigator: We’ve partnered with an insurance advisor to advise on new insurance plans to consider adding to your practice, or plans to discontinue, to achieve your ideal payer mix.
- Clinical Opportunity Blueprint: We provide you with an analysis of your practice to reveal potential for additional earning.
- Critical Metrics Analysis: We provide you with a customized practice report on critical items, reviewed and updated annually until your complete you practice transition.
Our Practice Optimizer Experience also includes important elements needed for an overall secure retirement, such as:
- Ideal Retirement Calculation: This is a financial review of all of your investments and projected future income to establish security in the timing and planning for your future transition. This can be done in tandem with your current advisor.
- Estate Preparedness Gameplan: We’ll refer you to an attorney, local to your area, with expertise in wills, trusts, and estates, to update or create the essential legal documents to protect your practice assets and value in the event of an unforeseen death or disability.
If you are considering retirement now, or If there is a chance you will be retiring in the next five to ten years, keep the above statistics and questions in mind. If you start planning now, you can ensure a smooth transition when the time comes. For more information contact DDSmatch Mid-Atlantic and set up a consultation.