Athena Consulting: Dental Practice Solutions

Discussing the topic of death and disability is uncomfortable for many business people, but it's an important issue for owners of small businesses – including you, the dentist.

On several occasions I have worked with spouses and children in the sale of a dental practice. It is a stressful time for them. Surviving family members have many issues to face at once, so it is easier when arrangements have been made in advance.

The decision to preserve the value of your practice for your family is a no-brainer. You simply haven’t been educated on how to go about it.

Such planning is either what they never taught you in dental school or things you don’t know you don’t know. Either way, it’s up to the dental consultants to educate the profession. Your dental practice is probably the single largest asset you will own other than your home. Why wouldn’t you plan ahead?

Why every dentist should have a baseline appraisal on his/her dental practice: If an untimely death or catastrophic disability happened to you – yes, you! – have you wondered what would become of your dental practice? Of course, your spouse or attorney would arrange to sell your practice to a young purchaser. That’s logical. But here's what you don’t know: Unless you have a codicil to your will giving instructions on whom and when to contact to arrange for the sale of your practice, it will be included as part of your estate and go into probate. Probate can take months! In the meantime, the value of your practice declines with each passing week. Soon, it will be worthless. Your dental practice will be a lot of used equipment with no staff and no patients.

Here is the key to protection:. If you have a baseline appraisal and a codicil to your will instructing your executor to contact your dental consultant immediately upon your death, the dental consultant can quickly update your appraisal and immediately start marketing your practice for sale. The chances of the practice being sold sooner rather than later (when it has little if any value) increases dramatically.

How quickly does your practice lose value? Upon your death, your practice value will decrease by 10 percent every week. Eight weeks after your death, the practice is worth 20 percent of its value when you were alive and practicing. It won’t be long until the practice is worthless to a new purchaser because the staffers have found other jobs and the patients have relocated to other dental offices.

Patients do not understand that a new dentist can be brought in to take care of their dental needs without them having to change offices and deal with a new doctor and staff – none of whom knows them – amid totally unfamiliar surroundings in a new location.

What does this program require to maintain it? It’s fairly simple. We will do a baseline appraisal of your practice and provide you with a codicil instructing your executor in what should be done and how quickly. We keep your appraisal and a copy of the codicil on file. At the end of each year, we require that you send us a copy of your tax return and a few year-end reports. If we are notified of your death, we will only need a year-to-date profit-and-loss statement in order to update the appraisal. This can be done within days after your death.

How much is this going to cost you? Only the fee for the baseline appraisal. We do not charge you for the codicil or to maintain your file. We do not charge your estate a fee to update the appraisal if or when the time comes. Our goal is to present your practice to the market and locate a purchaser quickly, allowing your family to realize the value of your dental practice. Your estate will pay our usual fee for the transition upon closing the sale.

Why have we created this program? Because you need it. You now know you need it because we’ve educated you on this issue and you have no excuse not to protect your family.

How do you get this program implemented? With one simple phone call to us at 303-412-5749 or by clicking this link to contact us. This is one issue we urge you not to put off!