4 Steps to Prepare Your Dental Practice for the Unexpected|
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At a Glance:
- The Main Takeaway: As difficult as it may be, dentists and practice owners must plan for unexpected events or emergencies to ensure their business is protected.
- Impact on Your Business: Failing to do any pre-preparation puts your bottom line, your employees, your operations and the potential sale value of your practice at risk.
- Next Steps: In collaboration with a professional team of advisors, follow these four steps to safeguard your personal and business affairs against the unexpected.
Ready to add a dental CPA to your team of professional business advisors? Contact Aprio’s National Dental Practice today.
The Full Story:
If the past year has taught us anything, it’s that there’s no such thing as being overprepared for the unexpected. Here are four steps to ensure that your personal and business affairs are accounted for in case of an emergency.
1. Determine your ideal retirement
It’s critical to understand how much money you need from your business to cover emergencies and support your loved ones after your post-working days are over.
Assemble a team of professional advisors — including qualified dental certified public accountants (CPAs) — to help you identify the amount you need from a potential sale of your practice to fund your retirement. From there, your team can review your financials and determine how to make that goal a reality — whether that’s increasing collections to boost cash flow or introducing strategies to maximize your earnings while reducing your tax impact.
2. Invest in your practice to ensure future value
If a future exit or retirement from your business includes a sale, then you need to invest in your practice to ensure its future value to a potential buyer. This may include technology enhancements to attract next-gen patients, strategies for increasing collections or renegotiating your fee schedule with payers. The goal is to increase your cash flow and improve your bottom line to make your practice attractive on the market, but it also includes creating an insurance plan that protects your business assets. This is an area in which your professional team can help.
3. Consider types of sales
Does your future include an outright sale of your practice to an external buyer? If the answer is yes, there are a few points to consider.
For instance, do your due diligence to find the right buyer for your business; don’t just sell your practice to the first bidder. In addition, don’t put your practice on the market before it’s ready; you may need to make value-increasing investments in your business to ensure you make the right deal and maximize the sale.
On the other hand, you may want to transition your practice to an internal dental associate, instead of selling to a third party. This also comes with its fair share of preparation, including the creation of a solid succession plan that prepares your associate to carry the torch.
4. Create contingency plans
Your contingency plan protects your practice from risks that could have a serious impact on you, your employees and the future of your business. Your plan may include strategies that cover your staff and operations in case you unexpectedly pass away or become incapacitated; these may include a buy-sell agreement or life and disability insurance.
Beyond your business contingency plan, you also need to establish a personal plan that fulfills your family’s needs in the event of an emergency, or cares for you in the event of a disability or illness. Your plan should include estate planning documents like a will, a power of attorney and an advance medical directive.
The bottom line
Nobody likes to think about unexpected emergencies. But Aprio’s National Dental Practice handles these types of matters on behalf of practice owners every day and can provide the empathy and expertise you need to navigate this sometimes-difficult phase with confidence.
- Want to Grow Your Dental Practice in 2021? Try the Triple P
- Choosing a Dental CPA Can Be a Painless Procedure
- Selling a Dental Practice? Here’s How to Keep the Most Money from the Deal
For help with preparing your practice for the unexpected, contact our team today.