Time to Sell?
With Steven M. Ziegler
Steven M. Ziegler is the vice president of client relations at Ziegler Practice Transitions Ltd, a dental practice transition consulting firm that specializes in orthodontic practice transitions. The company aids both buyer and seller through every step of the practice transition process (practice matching, practice appraisals, transition documents, and financing) and has completed more than 1,000 orthodontic practice transitions in all 50 states since 1995.
Orthodontic Products: How does Ziegler’s annual mailer to senior orthodontists help professionals find the opportunities they are seeking?
Steven M. Ziegler: The Senior Mailer is designed to draw a senior orthodontist’s attention to the fact that we have more than 700 orthodontic residents and recent graduates registered with our Practice Matching Assistance Program. These residents and recent grads are seeking opportunities of all transition types (associateships, partnerships, 100% purchases, or fractional purchases) throughout the United States and Canada. Although we have this high number of registered buyers, we do not have many registered sellers and, therefore, we are not able to provide our registered buyers with very many practice opportunities from which to choose. Our matching program is completely free for both buyers and sellers, and there is no obligation to use our firm for the transition documents, even if we match the parties.
The listing process is completely secure because all information is collected and stored offline and all of our registered buyers go through a manual, prescreening process to verify that they are, indeed, potential buyers and not just a practicing orthodontist who wants to know who is selling in his or her area. Additionally, registered sellers can choose to list their practice publicly (which includes an e-mail campaign sent repeatedly to only registered buyers) or anonymously (wherein the registered seller only receives a list of registered buyers seeking opportunities in his or her state).
OP: Ziegler Practice Transitions recently relaunched its Web site. What improvements did you make?
Ziegler: It was our intention to create the most informative orthodontic practice transition Web site on the web. We have added a “Learning Center” that contains a video question-and-answer session that was derived from a DVD we created for the AAO in 2007. We also have a seven-part e-mail series regarding practice transitions, estate planning, and retirement planning, for which users can sign up. Buyers and sellers can now initiate the registration process for our free Practice Matching Assistance Program online as well.
OP: Have you noticed an increase or decrease in the number of orthodontists retiring due to the economy?
Ziegler: We saw a reduction in the number of senior orthodontists retiring and selling their practices from October of 2008 to April of 2009. Once the stock market found its bottom, many sellers regained their confidence in the economy and their retirement plans were, at least, visible again.
A senior orthodontist’s decision to sell or not to sell is largely based on the ability to live off his or her retirement account. When the market collapsed, the retirement accounts went with it. Many senior orthodontists have taken the position of, “I’ll wait until my retirement account returns to its precrash total before selling my practice.” The important message to get out currently is 1) if you have enough funds to get through the next 2 years or so without having to sell too much stock and realize those losses, and 2) you do believe the market will eventually recover, then now is the perfect time to retire and sell your practice. The proceeds from the practice sale can be used to purchase stocks at today’s low values. The logic here is that rather than waiting for the retirement account to fully recover and then selling your practice, it makes more financial sense to sell your practice now, and let the proceeds from the sale benefit from the economic recovery along with your rebounding retirement plan. (Buy low and sell high). We strongly encourage all senior orthodontists who are delaying retirement because of the current economic conditions to discuss this alternative approach with their financial advisers.
OP: Is your company offering any special discounts during this current economic downturn?
Ziegler: We have not seen any need to reduce our fees or offer any discounts in the current economy. Our fees have always been very reasonable compared to other transition firms and individual transition attorneys.
When we represent the buyer alone, he or she does not have to pay anything until he or she has graduated and begun working, and even then, he or she may pay over time if needed. When we represent both the buyer and seller, the fees are initially the seller’s responsibility (half of which are reimbursed by the buyer at closing) and are paid through the practice so they are tax-deductible. The seller will also be receiving a large amount of cash at closing to mitigate the upfront cost of the transition. It is far better for a seller to spend a little bit of money early on to ensure that he or she receives a high-quality transition plan, thorough documents to implement that plan, and the expertise of a transition firm specifically designed for orthodontic practice transitions.