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Practice Transition

A professional practice is often a doctor’s most valuable asset. And while transitioning a practice is a certainty for most dentists and physicians, not all transitions will be successful. Waiting until near retirement to begin the process can be a costly mistake, resulting up to $1,000,000 or more in lost income. Transitioning a practice without understanding why, when and how to integrate a transition plan with all of the vital components of your practice structure can result in unnecessary taxes and other inefficiencies.

Receiving Economic Value from Professional Practice Equity

The Greenbook program recommends beginning the process between the ages of 45 and 55, allowing a doctor to capitalize on incremental income available from the sale of fractional interests over 10–20 years of his or her professional career. We have found this approach results in a more gradual transition with less risk and drives greater income, enhancing a doctor’s ability reach financial independence sooner.

An Associate Adds Profit:

With fixed costs remaining essentially the same, the goal is to move the incremental revenue from the associate’s production to the practice’s net income. This growth in revenue is the catalyst for the first fractional sale.

Fractional Sale Practice Transition—A Winning Process

The income difference between waiting to transition a practice at retirement and beginning the transition process in your mid-40s can be significant. Consider the following example of a fractional sale practice transition compared to a traditional full sale transition.


The starting point for buying or selling a practice should be getting to know the practice’s value and its value drivers. Once value is understood, both sides of the transition can win in the transaction. Greenbook’s practice valuation and transition process includes examining the unique aspects of each practice and establishing a fair market valuation. Each business case incorporates:

  • A detailed plan and transition strategy that clearly outlines objectives, responsibilities and expectations
  • A thorough review of practice financial statements, tax returns and other relevant business data
  • An on-site practice visit
  • The delivery of a comprehensive practice valuation and cash flow pro forma supporting the practice valuation and transition strategy
  • A meeting to review the transition process, including roles of attorney(s), expense and revenue sharing algorithm, valuation and cash flow pro forma, transition business structure, financing, buy-sell insurance and tax efficiency

Shortening the Path to Financial Independence

Leveraging years of collective experience in providing integrated financial planning for doctors, the Greenbook program is designed to help you transition your professional practice. We review each case in its entirety and create a transition strategy that becomes an integrated component of a doctor’s financial plan. The fractional sale may be considered a more involved method for practice transition; however, it is a path that has been traveled successfully many times. It maximizes income from the sale of the various fractional interests, and because a doctor can save the proceeds from this transition process, his or her ability to reach financial independence sooner is enhanced.