At some point, you will want to monetize your life’s work; your dental practice. Whether that time is now or in the distant future, it will pay to start thinking about it today rather than tomorrow. Larger practice values today are exceptionally high due to a confluence of factors including low interest rates and excess liquidity in the financial markets. This can change rapidly as it did in 2008. It pays to be prepared by at least understanding the potential options.
The Hybrid Model to Turn Today’s High Values Into Cash, But Stay and Grow
Many doctors—not even close to retirement age—are intrigued by a transaction structure in which a partner buys 70% of their practice for cash with the doctor retaining 30%. The new partner then provides the capital and expertise to assist a doctor in increasing the growth rate of their practice via expansion, new offices or acquisitions of other practices in their areas.
The doctor ultimately sells the remaining interest to their partner at a predetermined multiple of earnings in the future. The future can be two years or twenty. Every structure is customized to meet the doctor’s goals.
The benefit of the partnership structure is that the doctor can often pocket millions in cash now and benefit from the future growth of the practice they built, and will build, with their new partner.
This is just one of the many options currently available to great doctors with large practices.
Call us to learn more.