Gretchen O. Lovelace, M.S, CFP, CPM, is the current national president of ADS Transitions. Gretche is also the president and owner of ADS Lovelace and Associates, Inc., a full service professional practice valuation, brokerage, and consulting firm based in Baton Rouge, LA. She can be contacted at 225-892-5135 or gretchenlovelace@cox.net
Most dentists look forward to retirement, even if they find their career interesting and rewarding. However, in the rush to achieve their goal, practitioners often fail to anticipate the other changes that come with selling their practice and riding off into the sunset. Selling a dental practice is an emotional as well as financial step, and practitioners are often unprepared for the emotional component of the sale. Though selling a practice eliminates almost all of the headaches associated with practice ownership, it also gives rise to a number of new concerns for the seller. Just as practice purchasers often experience “buyer’s remorse” when the first piece of equipment breaks, practice sellers often get the blues when they realize the practice they spent a career building now belongs to someone else.
Almost any practice owner can list the benefits of retiring from practice ownership. Among them are reduced stress, abundant free time, no conflicts with staff or patients, and no office related expenses. However, along with all of the benefits of retirement come a few unanticipated drawbacks that can contribute to a sense of malaise amongst practice sellers. The two most unanticipated problems are a lack of control over their previous practice and unfilled free time.
The biggest obstacle for a practice seller is usually the lack of control over their sold practice. Though it may seem obvious that a seller cannot control an asset after the sale, sellers are often unprepared for changes made by the buyer after the sale. As a business owner, the seller is accustomed to calling all of the shots. Consequently, sellers are often offended when the buyer makes a decision with which the seller does not agree. It is important to remember that the seller may only offer advice to the new owner, and that the purchaser is free to use or ignore that advice.
A seller’s lack of control over the practice can also manifest itself and cause anxiety when the Seller interacts with former patients and staff. When former patients tell you “it is just not the same,” or a staff member tells you they are disgruntled with the new owner, the urge is to try and fix the problem for them. However, almost all practice sale contracts require the seller to support the buyer, and the best way to get sued after a sale is to disparage the buyer to other dentists, patients, or staff. Consequently, the seller has little alternative but to reassure patients and staff that the buyer is well qualified. The key point to remember is that the patients are no longer “your” patients and the staff is no longer “your” staff. You must mentally accept that, even if you remain as an employee in the practice, the practice is no longer yours.
The other main obstacle sellers face is not having a plan for occupying themselves after retirement. Often, sellers will find themselves bored and unable to fill their 36-40 hours of additional free time each week. This problem is compounded if a spouse is still employed, as they are not available to “entertain” the retiree. Sellers will often look to fill this time by seeking part time work, only to find themselves restricted by a non-compete agreement. Consequently, it may be a good idea to ask for an exception to the non-compete allowing the seller to teach at a dental school, work for a government entity, or substitute a few days per month for dentists who are ill. This will provide a way to “ease out” of the dental mode and into your retirement activities.
In order to cope with the “Seller’s Blues,” a transitioning dentist must accept that the “blues” are part of the change and then prepare for the change. Be prepared to let go of the decision making in the practice. Start developing your activities and hobbies before you actually retire. Reactivate your social life by finding other retirees who share similar interests. Remember, it is more important to retire “to” an active life than “from” a busy life.
