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I am a dentist. My office will collect around $1.8 million this year. That's a combination of 3 part time docs. I own 100%. As the office gets larger it's become more challenging to manage. We've had 20% growth each year for the past few years and it's getting difficult to sustain that trajectory. I am feeling burnt out on the management and read a lot of financial blogs and am really into the F.I.R.E movement.
The question is when to jump and sell. I have been aggressively pursued by corporations this past year, and have an opportunity to sell pretty high (relative to most practice values). When does one take the money and invest it and just go back to being an employee. Our home expenses including mortgage are under $10K per month including kids college savings.
Basic stats:
--I am 38 years old
--my spouse can draw a nice pension starting in 12 years ($6K+ per month)
--I currently pay myself $160K per year through salary. We are use to living on this amount comfortably.
--practice debt is $650K
--Most recent practice offer---$2M
--new offer could be up to 12 times EBITA......this is a private equity deal that I could get in on. Would have to sign a LOI that says if they get 12x I intend to sell. EBITA is around $420K....so after brokerage fees it could be around $4M.
These deals come up occasionally in dentistry....but not often. They go in waves and it really is selling your practice to the highest bidder. Usually you are required to stay on for a period of 2-5 years and you're giving up control of a lot.
My question is, who takes the golden ticket? most of this is taxed as capitol gains. I'm just thinking if I net $2M and invest that at 38y/o then what does that grow to? i would still work to keep from touching the nest egg. our day to day expenses are low....most of our money goes to savings. This would give us a big head start. My target for retirement has always been $4M. Because so much time and money was spent building this practice our total savings now is only $250K range. Most of our assets are tied up in this office. Our only other debt is $400K owed on a home.
thoughts? I would continue to work. Due to insurance involvement I do not see my office being as profitable in the coming years. As in medicine, its getting harder and harder to stay profitable. The changing tides are part of the reason I'm burnt out on management. has anyone sold in one of these deals?
The question is when to jump and sell. I have been aggressively pursued by corporations this past year, and have an opportunity to sell pretty high (relative to most practice values). When does one take the money and invest it and just go back to being an employee. Our home expenses including mortgage are under $10K per month including kids college savings.
Basic stats:
--I am 38 years old
--my spouse can draw a nice pension starting in 12 years ($6K+ per month)
--I currently pay myself $160K per year through salary. We are use to living on this amount comfortably.
--practice debt is $650K
--Most recent practice offer---$2M
--new offer could be up to 12 times EBITA......this is a private equity deal that I could get in on. Would have to sign a LOI that says if they get 12x I intend to sell. EBITA is around $420K....so after brokerage fees it could be around $4M.
These deals come up occasionally in dentistry....but not often. They go in waves and it really is selling your practice to the highest bidder. Usually you are required to stay on for a period of 2-5 years and you're giving up control of a lot.
My question is, who takes the golden ticket? most of this is taxed as capitol gains. I'm just thinking if I net $2M and invest that at 38y/o then what does that grow to? i would still work to keep from touching the nest egg. our day to day expenses are low....most of our money goes to savings. This would give us a big head start. My target for retirement has always been $4M. Because so much time and money was spent building this practice our total savings now is only $250K range. Most of our assets are tied up in this office. Our only other debt is $400K owed on a home.
thoughts? I would continue to work. Due to insurance involvement I do not see my office being as profitable in the coming years. As in medicine, its getting harder and harder to stay profitable. The changing tides are part of the reason I'm burnt out on management. has anyone sold in one of these deals?
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