3/3 The Experienced Dentist Pocketbook — A Three Part Series
It is done, you’ve gone through due diligence, you are done with all lawyers, accountants and consultants. You have inked the agreement and a sigh of relief is noticeable. Welcome to another “first day” of the rest of your life. Similarly to any life milestone, it is always better to have at least one plan for the “day after” you sell your practice. This is true whether you plan on continuing to practice dentistry or retire to Scottsdale, AZ.
In this process, you should discuss with yourself and your family the following topics:
1. How would you handle becoming an employee again?
Originally, you became an owner not only because of the higher potential earnings, but also because you didn’t want to remain an employee and wanted to do things your way. Well after dozens of years as an owner, you might be looking at becoming an employee again. As things have changed in the industry, you cannot expect that being an employee is the same as it used to be. In fact, you can count on the fact that it is very different. The more resistant to following orders and guidelines you are, the more you’d struggle with adapting to your new reality. In a lot of instances, I recommend for dentists I work with to “swallow their pride”, as new management implements new policies. A controversial point is supplies. Often times, new owners have a preferred vendor or would eliminate some variety of a product in order to reduce expenses. In this case, you might find yourself outside your comfort zone. As a new owner, they are allowed to make such changes and you would just have to adapt to it and deal with the frustration.
2. Relationships with staff and patients
With new ownership comes new rules and procedures. As with any other change, new rules and procedures will create anxiety and stress on you and the staff. If before, you had the power to cut corners and make some concessions, moving forward most of it will not be possible. As patients and staff grew accustomed to this, it might create some friction. Being prepared for this will eliminate the element of surprise at the very least, although may not eliminate the implications. Beyond the fact of how staff and patients will feel in said situation, think about how it would make you feel. “Powerless” is the first word that comes to mind for the dentists I have worked with in this transition period. As with any emotion triggered by events, preparation and awareness are key factors in dealing with it. In my experience, even though everyone knows you are no longer the owner, the habit of turning to you for certain things will not change that quickly.
3. What would you do with the increase in free time?
As an owner and a dentist, you are used to not having enough hours in a day. When you sell, you will be planning to “take a step back” and work less hours. This might not occur right away, but will happen eventually. Sometimes, you sell your practice and completely retire right away. At first the excess of time is welcomed. You begin doing all the things that you once dreamed of. But soon, you realize that there has been a void created by the transition and the activities you originally planned do not fill it enough. Keeping busy has not been a problem up until now, but will become an increasingly challenging task. I often recommend dentists to take up speaking/lecturing. Sharing some of your vast experience is a great way to boost your ego, fill in your time with fulfilling activities and support your community. Joining clubs, associations and other charitable activities might be another great suggestion, if that is more your kind of time-spending.
4. Contract obligations and their implications
I cannot stress enough how important it is to understand every single item on a contract you are signing. It is true for any transaction throughout life, but especially important in bigger transactions, such as the sale of your clinic. It is important to let your lawyer review the agreement. As with any professional service that is of magnitude, you should get a second opinion from an additional lawyer – it is well worth the money. Also, you should have your lawyer explain every single clause and its potential implications on you, after the transaction has been completed. Through my experience, I’ve seen some contracts with production levels to be maintained. Although it is not unusual, it can be disastrous if for some reason you cannot continue to produce, such as a medical condition or moving somewhere to care for a family member.
5. How would you ensure that the funds received will be sufficient for your needs moving forward?
As with a previous article, you must know the amount of money that you need to live comfortably, attend to all of your commitments and realize some of your life-long dreams. As the transaction has already happened, you are now at a planning phase to ensure the funds received will actually suffice to accommodate all your plans, goals and dreams. Keeping a close eye on your expenditures on top of realizing some potential avenues of revenue are good practices to ensure you do not run out of money. Making specific investments that are in-line with your risk tolerance are a potential way to ensure money doesn’t run out. You should keep in mind that even if you planned this out to a “T”, you will still have life events that will change your needs and it is a good idea to make sure you have funds available for those unexpected events.
Getting used to a completely new lifestyle is never easy. Luckily for you, you should have enough health and funds to start it the right way, by fulfilling some of your long-time dreams. As in everything in life, planning and preparation are key to provide for not only short-term wellness and happiness but long-term prosperity and fulfillment as well.
About the Author
Alex Zlatin is the CEO of dental practice management software company Maxim Software Systems (MaxiDent). He helps dental professionals take control and reach the next level of success with responsible leadership strategies. He leverages his experience in “Responsible Dental Ownership – Balancing Ethics and Business Through Purpose”, a detailed guide providing practical tools and a unique, proven approach to running a successful dental practice. alexzlatin.com; maxidentsoftware.com