Many teachers believe that the best way to engage students in a subject is by using relatable metaphors. We make sense of new information by forging connections to something we already know. In that spirit, this article on exit planning uses subject matter that engages dentists like no other….no, not clinical dentistry…GOLF!
On August 6, 2018, the “Queen of Soul” Aretha Franklin died at aged 76, after a lengthy battle with cancer. Not married, Franklin left behind four sons, aged between 48 to 63, a long-term de facto partner, an estate worth about $80 million…and no will.
When my grandfather was in his early 80s, he was driving back from his regular morning swim at a friend’s pool at 630am when the police pulled him over. They said that he had been driving erratically and they had been trying to get his attention with their sirens for a few blocks. The police took him home in the back of the police car and that was the end of his driving career. Looking back at the situation, I think the whole family was aware of the incremental degradation of his faculties over the previous few years, and perhaps there should have been an earlier intervention. It was lucky, under the circumstances, that no one was hurt by his poor driving skills in his last few years behind the wheel.
Once a buyer and seller have agreed to the price and terms of a practice sale, their lawyers’ roles should be straightforward. It should be a matter of documenting pre-negotiated elements of the deal, in a way that both protects their clients’ interests and minimises any potential exposure to risk.
When a dentist is thinking about selling their practice, the focus of discussions with their spouses and advisers is usually on financial questions, like: “How much money will I need in order to retire?”. While this is discussed in detail over spreadsheets, with projections and budgets, a more secret, internal question is often plaguing the dentist late at night. Internally, many will be equally concerned with: “What am I if I am not a dentist?” and “What am I going to do with my time?”.
When someone is looking to buy or sell a practice, they are often presented with an appraisal of the practice that has been prepared by the other party in the transaction. While the results of the practice’s trading may be clear, there are numerous appraisal techniques to choose from, and often some creativity applied when using them.
A popular exit plan for many dentist practice owners is known as the Delayed Internal Sale.
