As the owner of a thriving dental practice, you are positioned to do well at the point of transition as long as you have an excellent transition and retirement plan in place well prior to that event. Another exciting thing to realize is that you are the owner of a business that has the capacity to continue to serve the community you are in long after you exit. This is called LEGACY.
Over the last 36 years, I have had the opportunity to do Practice Transition and Retirement Planning for hundreds of dentists. It has been interesting to observe the things that those who do it successfully have in common with one another. Here are some of the things I have learned:
- They have a long-range strategic plan as to how they intend to transition their practice and their personal lives. They put those plans together a minimum of five years prior to implementation. The specific nature and size of your practice will partially dictate the length of time that you will require leading up to your transition events. For example, some of you may need to take the equity out of your practice in two stages by recruiting partners over a span of several years. Others will simply find an appropriate new owner and implement a much faster phased entry-exit from their practice.
- They are optimistic about their future practice transition and retirement events and approach the entire process expecting it to work successfully. You would be surprised at how many dentists do not expect their transitions to work well and then actually create that experience. It is also important to involve your team in the process as soon as your plans are in place.
- Pick a finish line. Define an ideal retirement date that fits with your personal goals and objectives and is timed for when your practice is still strong and trending upwards. This allows you to create an effective, flexible plan and move forward with confidence.
- Plan your Life Transition simultaneously with you Practice Transition. Life Transitions and Practice Transitions need to be connected in order to ensure success. Beging putting together a solid picture of what you want your retirement years to look like. Do you see retirement as a reward for a lifetime of service or as a punishment for growing old? Is it an opportunity to learn and do things you have always longed to pursue or is retirement like banishment from a way of life you have cultivated over the years? You and your spouse will benefit from discussing these important issues with one another.
- The formula was rather simplistic for our parents generation. People worked longer and died earlier. In 1900, people who survived to age 65 could expect to live another twelve years and 80% of men 65 or older were still working. Compare that with 1995 figures where men and women who made it to age 65 could expect to live another 17.4 years, with women outliving men by 3.3 years. Interestingly, only 3.7 million, or about 12% of the men and women age 65+ remain in the workforce. So we are living longer and leaving the workforce sooner. Simple arithmetic proves that most retirees need to find ways to redirect the 2,000+ hours per year that were once spent at work.
- As a dentist, you have chosen a life of dedication and service. My retiring clients tell me they need to find new outlets for being of service and giving to the community, when they are no longer active in their practices. This fills a void and adds significant meaning to their lives.
- Make sure that you are financially prepared for retirement. Solid financial planning and preparation allows you to continue to live a life of choice as you move on to the next phase of life with the new opportunities for adventure that it offers. You will be able to sell your thriving practice and apply the net proceeds from that sale to your retirement nest egg. I advise my clients to put a personal financial plan in place that does not significantly rely upon those funds.
- Dentists who are able to truly create Win-Win transitions in their practices do so because they are able to come to the negotiating table in a state of financial prosperity rather than scarcity. Work with you financial planner to make sure that you are on the right track for creating the kind of prosperity that you and your family want.
- Look at retirement as a new career. Come to it with a sense of optimism and adventure that allows you to see that possibilities exist beyond the profession of dentistry. Right now, who are you away from your practice? Ask yourself how much of your identity you take from being a dentist and how would you describe yourself when you are no longer practicing. Visualize your post-retirement routines and lifestyle and develop specific plans around that vision. Identify a vocational interest that will bring meaning to your new life.
- Take a careful inventory of personal health and fitness issues. The best thing to save for retirement is YOURSELF. Take an inventory right now of your physical, spiritual and mental fitness. Eat right, exercise, relax and smell the roses as you prepare to live life to the fullest well into the future.
- Nurture your relationships with your spouse, family, friends and community in order to maintain love and richness in your life. A common characteristic of those who retire effectively is that they are surrounded by family, love and laughter. There are many young people around you who can benefit from having the caring support of a gracious mentor.
It is also important to note that the time required for recruiting a young dentist into your practice is lengthening with fewer available candidates in the system. Give yourself a minimum of two years to find the right person and to have them appropriately installed in the practice and thriving as a new future owner. Be specific about the kind of person that you are looking for to take over your practice. Work with your team to create an Ideal Candidate Profile to use in recruiting so that you talk with candidates who embrace your philosophy and personal value system.
Over a lifetime of practice, you have taught both you team and your patients what to expect in a relationship with you and the practice. It is very important that the incoming dentist understands their importance and can be congruent with what has made your practice unique and successful.
Take the time to do your planning, both individually and as a couple. Do your Life Planning first and then do your Practice Transition Planning. The two must be strongly integrated, but the creation of a vision for how you want to live is the beginning place for you. Periodically update your plans and then implement them with confidence. Your life and the lives of the people around you will be richly enhanced!
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