As a dental broker, of course, every year is the best year to list your practice! All kidding aside, most of us in the transition business saw a reduction of activity due to the economic downturn several years ago. However, the economy seems to be booming and we had our best year for practice sales in 2017! Values and revenues have stabilized from the past downturn in the economy. Interest rates are still at historic lows and 100% financing is still available in most transitions.
So why is NOW a better time than usual to consider selling your practice?
- Inventory has been consistently low for several years, therefore values are up. We do not expect this to continue as the “baby-boomers” are expected to retire in just a few short years.
- Interest rates are still at historic lows. Financing is also readily available at 100% for most transitions. As the economy begins to improve, we expect interest rates to increase. Most financial analysts believe that inflation has to kick in at some point due to the printing presses running at the Fed.
- Quality practices in the cities are getting record prices. This is great for you city folks, but not so great if you are outside the city. It will definitely take a little longer if your practice is outside the city, you might consider starting the process a little earlier.
I also believe that the inventory and interest rates will start to inch higher in the near future. Higher interest rates and more inventory will definitely put downward pressure on practice values.
As a dentist first, I always finish my lectures stating that I do not believe sellers should “time the market”. While taxes, interest rates, inventory and local market forces influence pricing, I believe that you should retire when you are ready to. If you are contemplating retirement in the near future, NOW is a good time to consider making the move! So, stop asking your self, “should I sell my dental practice?” and instead talk with an expert about it. It is certainly worth a call to your accountant to look at the current trajectory of your practice and determine if retiring sooner might be in your best interests!
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