In 2008, the economy retracted and, over-night, everything seemed to be
worth significantly less. Dental lab owners ready for retirement found
themselves taking on more responsibility as they juggled staffing and workload
swings. Over the last 3 years, the economy has recovered and businesses have
regained some of the value that was lost. However, many dental lab owners who
were ready to retire 4 years ago are still waiting. According to LMT Dental Lab
Owner Demographic Study, 43% of dental lab owners will be eligible for
retirement in the next decade.
There are steps one can take to ensure a lab stands out in this buyer’s
market. Prospective buyers evaluate income, assets, technical expertise, and
goodwill. The more transparent this information is to prospective buyers, the
more appealing the lab will be, not to mention that this information helps to
ensure that the asking price is where it should be.
Income is generally the strongest determiner of the lab’s sale price, so the
more that is known about it the better. If income trended down during the
recession, check to see how it compared with others over the same time period.
Stock portfolio performance is measured against the industry benchmarks, lab income
is no different. If the industry was down 5% during a given period, being down
3% takes on a different meaning. Further reports that break down income by
department, product, and geographical area will also help to clarify the
numbers for a prospective buyer. Solid lab management reporting will provide
income analysis from a multitude of perspectives.
Assets are easy to measure as they are tangible. To add appeal, compile
comprehensive records. A good computerized lab management system will have provision
for storing equipment records with suppliers and a calibration and maintenance
history.
Like asset tracking, complete employee records should be available within
the lab’s management software, including education status, courses attended and
credits, and positive and negative comments made with regard to performance at
the lab. Good production reports should also outline what each technician is
grossing the lab and what they produce. Reports should provide a picture of the
role and efficacy of every technician in the lab.
While income is the key determiner of sale price, there is no income without
customers, and customers are generally not keen on seeing their lab change
hands. Complete customer and communication records are essential to a smooth
transition. The more information the prospective owner can access, ranging from
technical preferences to buying patterns to personal details, the more
confidant s/he will feel that customers’ needs are known well enough to be met
by new management. It is also imperative to have accurate, comprehensive
financial records and detailed sales breakdowns.
DAMAS/ISO compliance is, in itself, a step toward preparing for the sale of
a lab. In addition to the benefit of advertising compliance to customers and
prospects, it means the kind of information a buyer wants – methods,
techniques, and detailed information about every case and customer are tracked.
If a pattern is emerging, it’s that information in an owner’s brain is worth
much less than documented information that can when needed. As great as it
feels to be indispensable, this is one time when an owner must be dispensable,
and the more dispensable the better. Getting as much information out of the
owner’s (and all employees’) heads and documented prior to sale will provide
assurance that the operation of the lab can continue into a predictable and
prosperous future.
Ironically, preparing for the sale of the lab, just like fixing up a house
just before selling it, always makes one wonder why they waited so long. The
reports that appeal to a prospective buyer are the same reports that reveal the
past and present of the lab and point to its future.
Preparation is the key to exiting your business on your terms and receiving
a price close to your asking price.
Call me for a confidential consultation as you begin preparing to move on to
the next phase of your life.
For a complimentary consultation
For more information call me at 888-925-5055 ext.206
Visit my website to search for business for sale in Florida
