A Different Approach

In our view, the transition planning process is often viewed in vacuum…too much emphasis is placed on the transaction itself while the longer term impacts are left ignored. While we are happy to assist a doctor in the more traditional sense of a practice broker we prefer to take a holistic approach in the process of selling a practice. We view the “transition” of transition planning as not being exclusive to the transition of practice ownership. More importantly, it is your transition from practice ownership towards retirement. In this transition, the sale of the practice is just one piece of a larger picture.

We address many of the important questions that are often ignored:

• What are the tax consequences of the sale?
• Can retirement cash flow be increased through adjusting the sales structure?
• What are the tax benefits of a multi-year transition?
• Will the sale of the practice provide enough capital for retirement?
• How can the sales price of the practice be increased?
• What investments can be made into the practice to increase the value of the practice?

Legacy’s holistic approach is desiged to answer these questions and many more of the questions that impact your long term finances. Ultimately, the focus is placed on how this transaction will impact your retirement lifestyle.

In a perfect scenario (3+ years out from retirement, with no immediate need to sell) we segregate the transition process into three phases:

1. Planning Phase
2. Transition Phase
3. Post-Transition Phase

Each of these phases is designed to address issues that impact the immediate transaction and your long term financial freedom.

Planning – during this phase we focus on preparing your practice and your personal finances for the transition towards retirement. The following areas will be addressed:

• Practice Valuation – the professionals at Legacy Group will provide a valuation of the practice to establish an approximate fair market value. The valuation process will also be utilized to assist in further practice planning.
• Improve Practice Metrics – based on the valuation model we will recommend and assist in implementing changes to improve marketability and increase the value of the practice. Emphasis will be placed on measuring return on investment (ROI).
• Post-sale cash flow analysis – typically speaking, the sale of the practice is the transaction directly before retirement. We will examine your personal finances and provide retirement cash flow analytics. The goal is to determine how much capital is needed to support your desired lifestyle and how close to that number we will be after the sale of the practice.
• Personal financial analysis – this follows closely with the above cash flow analysis. We will look for opportunities to further grow your capital in planning for retirement. This will include identifying tax reduction strategies and tax advantaged investment opportunities, performing in-depth investment portfolio analytics, and several other personal planning points.

Transaction – during this phase the focus will be placed on the actual transaction of selling your practice to another dentist. The following areas will be addressed:

• Pro-active buyer identification – we will utilize our extensive network to identify potential buyers for your practice. Prospects will be initially vetted to gauge actual level of interest, quality of professional practices, and access to capital.
• Structure Transition – We will work with you and the buyer to define the transition. We will your wishes and goals for a transition period and perform analysis to determine what type of transition period the practice cash flow can support.
• Negotiate of Sales Price – the valuation we perform simply provides a starting point for negotiations. We will work with you and the buyer to arrive at an equitable price for the practice.
• Create a tax-efficient sales structure – we place emphasis on examining the tax impacts of the sale and structuring the sale to reduce taxes both for the buyer and the seller. We perform analytics on how the structure will impact your taxes for the next 10 years, not just the year the practice is sold, and work to create a structure that reduces your taxes throughout retirement.
• Securing Financing for Buyer – we will work with the buyer and our network of lenders to secure financing for the buyer to purchase the practice.

Post-Transition (provided under a separate agreement with Legacy Advisory Limited Co.) – during this phase we will work to help provide you with:

• Investment Management – design and management of your investment portfolio. Portfolio will be customized to meet your specific needs and structured to preserve capital and achieve a good absolute return over the long term.
• Cash Flow Maintenance – retirement is a shift from cash flow generation to capital consumption. We will work with you to help you maintain the needed level of cash flow throughout retirement. In other words, we are going to work to make sure the “check is always in the mail.”
• Government Programs – there are a confusing myriad of options that can be chosen under Medicare and Social Security. We will work with you to determine which options are best for your given financial situation.
• Risk Management – retirement comes with its own challenges and sets of risks. For example, running out of money, increasing health care costs…these risks will be identified and we will work to mitigate and manage them.