ADA members looking at joining, leaving practices have new resource to aid in the transition
February 22, 2019
The ADA Center for Professional Success has teamed up with author William P. Prescott to release a free-for-ADA-members downloadable book on joining and exiting a dental practice.
"The book is aimed at practicing dentists and dental specialists who will eventually leave practices, as well as residents and dental students who will join a practice, usually as an associate and, hopefully, as a future owner," said Mr. Prescott, an Ohio-based attorney. Mr. Prescott, who is in the dental equipment and supply business for nearly 17 years, now represents dentists and dental practices nearly exclusively.
The purpose of the new 115-page eBook, "Joining and Leaving the Dental Practice," is to educate dentists on all important business, legal and tax planning issues relative to practice succession or entry choices, the author said. The book recognizes that in any form of practice transition, dentists have a silent partner — the IRS — specifically in the often-complex area of group practices, Mr. Prescott added.
"There is an analysis of all practical and tax issues, especially those relating to group practice and personal goodwill, which your other partner, the IRS, thinks are important," Mr. Prescott said. "I have attempted to explain both the complex practical and tax issues in understandable terms."
Transitions in dental practices can be unlike the process of joining or leaving other companies, Mr. Prescott said. "Joining or leaving a dental practice is different from other businesses or companies in that goodwill and referral relationships are usually transferrable as compared with other small businesses and professional practices," he said. "The key is understanding the economics of dentistry and the contingencies that do or do not allow for the goodwill and referral relationships to be transferred. In those states where practice owners must be dentists, family succession planning is more complex than in businesses without licensure requirements."
The book is divided into three categories:
- Leaving the practice, including two chapters on valuations.
- Joining the practice, including two chapters on associate employment.
- Group practice.
"Each chapter is based on my experience throughout my career since 1973," Mr. Prescott said.
He had a message for experienced dentists: "If you are leaving practice, start planning early, understand your exit choices and depart on your own terms."
For new dentists, it is this: "Live your dreams. If you can dream it, you can do it. While it may take time, don't compromise, at least not in the long run."
To download the eBook, ADA members can visit: https://success.ada.org/en/practice-management/joining-and-leaving-the-dental-practice.
Visit the ADA Center for Professional Success at Success.ADA.org.