Dr. Joel C. Small reflects on how the death of a family member is perhaps the most painful experience anyone can endure, and how this is particularly true when a solo specialist dies



The unfortunate reality is that with the passing of a solo specialist, the timeliness of the practice sale is crucial in maintaining the practice’s value. Consider the following unique aspects of solo specialty practices:

1.    Unlike group specialty practices that have predetermined buy/sell agreements, the solo practitioner has no predetermined buyer and must therefore sell his/her practice in the dental marketplace. The longer it takes to appraise, market, and sell the practice after the doctor’s demise, the more the practice’s value (and sale price) decreases.

2.    Unlike restorative practices, there is little or no availability of specialist locum tenens to help maintain a specialty practice’s production or referral base until a sale can occur.

3.    The emergency nature of many specialty procedures requires a specialist’s immediate attention. Referring doctors are often unable to ask their emergency patients to wait for treatment while a transition occurs, and must refer their patients elsewhere.

Over a very short period of time, the referral base will dwindle, and the practice value will plummet. Preparing the deceased doctor’s practice for sale is a terrible burden for the grieving survivors who have no knowledge of what information to collect or where to find it. They feel helpless at this moment and don’t know where to turn for professional help. Confusion grows and ultimately rules the moment when rational thinking and decisiveness are essential to protecting the significant and hard-earned equity remaining in the deceased doctor’s practice. It is no surprise that many deceased specialists’ valuable practices are unnecessarily sold at fire-sale prices, if indeed they are sold at all!

I have personally witnessed the devastating consequences of a friend’s untimely demise and the sale of his specialty practice for literally pennies on the dollar. All of the undue grief suffered by the family, as well as the precipitous loss of practice value, could have been avoided had my friend properly planned for this unexpected tragedy.

Preparing for the unexpected is crucial for the solo practitioner. Meticulous record keeping is essential, but only part of the necessary preparation. The single most important means of protecting the dentist’s family and the practice’s value is to utilize a trusted specialty practice broker to help prepare for the unexpected.

A specialty practice broker will assist in gathering the necessary data to expedite the sale of the doctor’s practice in the event of an untimely tragedy. Not only will the broker assist in gathering the data, he/she will also take responsibility for keeping the data current.

Once the preplanning process is complete, a package containing all the pertinent practice data, along with step-by-step instructions, including the name and phone number of the designated specialty broker, is created and placed in safekeeping with the hope that it will never be used.

Once a doctor has successfully gathered the necessary data, I feel certain that they will then realize what an enormous burden this process would have been for their grieving survivors to have accomplished. At this point, they will understand that the effort is an invaluable gift to their family.

Although a practice appraisal can be completed when an unforeseen event occurs, it takes time to complete an accurate appraisal. And as we learned earlier, following a doctor’s demise, time and practice value have an inverse relationship; as time increases, practice value decreases. It would be wise for all solo specialists to consider maintaining a current practice appraisal at all times. This can be prepared by a specialty broker, will be a worthwhile investment, and will provide peace of mind.

There are several reasons why specialists should consider working with a specialty practice broker for the sale of their practices. Among these reasons is the fact that the pool of potential buyers for specialty practices is significantly smaller than the pool of buyers for restorative practices. Additionally, the potential buyer for a specialty practice may currently be in another part of the country. Local or regional general practice brokers do not have the nationwide presence required to locate buyers in other parts of the country, and they do not maintain contact with specialty residents, new practitioners, and interested buyers. Utilizing a local general practice broker rather than a specialty broker will likely require more time in locating a suitable buyer.

Specialty brokers create a nationwide presence through their websites, listings in specialty trade journals, presence at regional and national specialty conventions, and personal appearances and speaking engagements at meetings and residency programs throughout the country. They maintain an active and updated nationwide database of interested buyers for specialty practices, and can locate potential buyers quickly. And most importantly, a broker and fellow specialist understands what creates value in specialty practices, and will help other specialists identify any areas of improvement needing to be addressed in order to optimize the value and sale price of their practice.

It is important for us to realize that our practices are one of our most valuable assets, and in today’s environment, the proceeds from the sale of our practices will, for many of us, represent a significant portion of our families’ net worth and our retirement nest egg. Preplanning and thereby protecting our retirement or our families’ financial futures in the event of our demise is our responsibility and should not be left to chance. It is one of the greatest gifts we can provide for our loved ones.

Bio

Joel C. Small, DDS, MBA, is in private endodontic practice in Plano, Texas. He received his endodontic training at the University of Texas at Houston, and his Masters of Business Administration, with an emphasis in healthcare management, from Texas Tech University. He speaks nationally on the topics of leadership, practice management, and specialty-practice transitions. Dr. Small is a co-owner of Phase Two Associates, LLC, a specialty dental practice brokerage firm in Dallas, Texas, that deals exclusively with practice transitions for the dental specialist. He can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or www.phasetwoassociates.com. His book, Face to Face, can be ordered at www.readfacetoface.com.