5 Years Out? How to Sell Now and Retire Later

An illustration of a man finding the right buyer for his dental practice

Many dentists reach a point in their careers where they are done with owning a practice.

Some are tired of managing the financials, dealing with payers, chasing down suppliers, and all the other headaches of practice ownership. Others have physical limitations that make daily practice difficult.

And some want to capitalize on a hot market for practice sales.

These doctors are not always done with patients, though. They love the art and science of dentistry. They still get a thrill from solving a tough case or restoring a smile. They just don’t want to do it five days a week, or they don’t want to manage a business anymore.

However, they know that if they start scaling back production in their own practice, the bottom line will decrease. Staff may leave if they’re not needed — and we know how hard it is to find/retain good staff right now! Patients will go elsewhere if they can’t be served in a timely manner due to a reduced schedule. All this will eventually lead to a lower sale price. (See: My Path to Retirement Got Way Too Bumpy.)

That’s why some dentists choose to sell sooner, while the value is high, and continue to work in some capacity. This can take many formats:

  • Sell the practice, but stay on to work part-time as an associate
  • Work in a community clinic, FQHC, or other setting on a more relaxed schedule
  • Teach, mentor, or pursue less physically taxing ways to practice

At ADA Practice Transitions (ADAPT), we speak with many dentists contemplating their next steps and trying to plan how and when to retire. If you're thinking about retiring in the next five years, consider exploring some of these options.

The Mentorship-to-Ownership pathway

Mentorship-to-ownership is perfect for a senior doctor in a practice that’s too small to support two full-time doctors or when the buyer is not quite ready to pursue immediate practice ownership. Often, the senior doctor is done with the physical demands of dentistry but still enjoys solving tough dental problems. Meanwhile, the incoming buyer wants to learn from an experienced doctor while they build up their clinical skills and ability to obtain financing.

Together, the pair define what the mentorship should cover. This could be how to run the business, building speed/confidence with certain clinical skills, or learning a specific treatment or specialty.

For example, if a third of the practice’s production comes from implants or sleep apnea treatments, the seller can spend time mentoring the buyer in these skill sets for six months or a year, sell the practice to the associate after the agreed-upon timeframe, then step away. Alternatively, if the junior doctor is ready to take on all the aspects of the clinical practice but unable to get financing due to a low credit score, they will be the sole practitioner in the office and get mentorship on the business while they build up their application.

Mentorship-to-ownership can be a great way for the buyer to take ownership and learn while the senior doctor stops actively practicing and gradually leaves the practice.

The part-time practitioner

When a doctor wants to spend their last few years immersed in dentistry but not ownership, they can “flip” places with a buyer. In this scenario, the buyer purchases 100% of the practice and the seller becomes the paid associate. This scenario relieves the seller of running the business so they can focus instead on providing mentorship and clinical care on their own terms. In addition, the newfound flexibility allows them to take time off, spend time with family, or just ease into retirement.

Often, these sellers start off working two or three days a week as an associate. They may then gradually scale back their hours over time. The buyer and seller typically have an agreement as to how long the seller will remain in the practice — usually 1-3 years. Along the way, the seller can help smooth the transition, reassure long-term patients, and impart a ton of valuable knowledge.

See: Protecting Your Practice’s Legacy

While somewhat similar to the mentorship-to-ownership pathway, this usually involves a slightly larger practice that can support a full-time dentist AND a part-time associate. In addition, this pathway involves the 100% purchase of the practice at the onset of the agreement.

There must be enough work (and space) to go around for a full-time owner and a part-time associate and the buyer must be capable of obtaining the necessary financing to purchase the practice. Depending on the practice, this could be a way to extend the practice’s hours or provide mentorship to the new owner as they learn the ropes.

The key is to work together to decide what makes sense for both doctors and for the practice. Does the seller only want to take on certain long-term patients or types of treatments? Maybe they just want to come in two days a month for TMD or sleep apnea therapy. Or perhaps it’s a more ad-hoc arrangement in which the new owner calls when they need a bit of extra help or to cover a vacation. I’ve even seen cases where the senior doctor arranges to cover the buyer’s maternity leave.

The fresh start

When the buyer is fully prepared to take ownership and wants the seller to walk away from the practice, sellers have other options to keep providing clinical care as they ease into retirement.

Check out your local Federally Qualified Health Center (FQHC), as they are almost always hiring and love to have experienced dentists. FQHCs will let you just “do dentistry” without any of the administrative or follow-up burdens. Rather, you can indicate what days you’re willing to work or which treatments you’ll do, and the practice administrators do the rest. FQHCs typically pay a straight salary and will almost always offer a comprehensive benefits package (retirement, health insurance, etc) for full-time employees.

You can also ask around your dental network to see if anyone needs a second set of hands a few days a week. This can work out perfectly if you have a colleague who wants to begin cutting their own hours while maintaining production. Just be sure to confirm you won’t be violating your non-compete clause!

And don’t overlook non-clinical dentistry. Teaching can be very rewarding while giving you an opportunity to apply all you’ve learned in new ways while shaping the next generation of dentists. Check with your local dental school to see if they need adjunct faculty or experienced dentists to oversee clinical rotations.

Things to keep in mind

No matter which path you consider, discuss it in depth with your family before you begin. Make sure you have thought through your goals and ideals. If deep down you only want to work one day a week, don’t commit to three! And if your spouse has already retired and really wants you to be done too, it may be worth listening for the sake of marital harmony.

See: Big Decisions Demand Family Input: Your Guide to Starting the Conversation

Then as you look for buyers, have frank conversations about what you hope to accomplish. It’s not fair to anyone if you accept an arrangement in which you don’t share expectations. A seasoned buyer who wants to immediately take over 100% will NOT be happy if you keep lingering around after the sale. On the other hand, a buyer who craves mentorship would be thrilled with such a scenario.

And if you plan to stick around “your” practice after the sale, make sure you are comfortable having someone else treat “your” patients, manage “your” staff, and make all the decisions. While letting go of the decisions can be very freeing, it can also be very difficult. Be honest with yourself: will this bother you?

Finding the right buyer can help assuage your worries — that’s why it’s so important to find someone who shares a similar philosophy of care. As part of the sale process, review a few cases together. Ask how the incoming doctor would have handled a tricky case. While there can be many approaches to a great result, can you respect their decision making? Are you comfortable having them treat the patients you’ve come to know as family? Only you can answer this question. And if you’re not, it may be better to sell and walk away rather than sticking around.

Remember: dentistry gives you lots of options. Your retirement is no different. Spend some time thinking about your preferences and exploring all the possibilities.