GAP Australasian Dentist Sept Oct 2020

Category Australasian Dentist 117 circumstances (how long you have owned your business, if you are selling to retire, etc.), which you should discuss with your accountant, but money for the sale of business is usually worth far more in post-tax dollars than money paid in salary and profit. They shouldn’t be considered as equal amounts as they are in the premise. 5. EVEN IF post-tax money was the same… What about “The Time Value of Money”? EVEN IF the post-tax money being offered on day one for the sale was the same as the post-tax money that you will receive over five years of working… you have to factor in the economic concept called the “time value of money”, which says that the money you have sooner is worth more than the identical sum in the future, due to: a. Interest and opportunity cost. The interest and return that you could get on present money if invested. b. Inflation. The buying power of $1M today is greater than it will be in five years. 6. Who works more…? Let’s say that, whether you sell or not, you are going to work for the next five years. In that time, assuming you will see exactly the same number of patients and bill the same amount in patient fees…. (remember, the premise is about divestment NOT retirement). With this assumption in mind, who will work more over this five-year period? u The non-owner doesn’t spend time counselling upset staff, replacing staff that quit or finding temps if they are sick. u The non-owner doesn’t spend time coordinating the servicing of equipment or someone to come fix broken computers or noisy air-conditioners. u The non-owner’s weekends and holidays are uninterrupted by calls, emails and responsibilities of the practice. The non-owner dentist who sells at the beginning will work significantly less and have significantly less stress in the practice over this five-year period, doing the exact same clinical work for the same commission that the owner dentist did. If you are weighing up selling now or later, there is an opportunity cost that comes with the burdens of ownership over the next five years that need to be accounted for. CONCLUSION When a practice owner is in their final few years of ownership and is doing their calculations of whether they are financially better off selling now or later, the variables are more complex than many might think at first. Practice owners in this situation need to keep the above broad principles in mind to ensure that they are factoring in all relevant considerations, so that they are able to make their calculations accurately and don’t get to the finish line short-handed. u Simon Palmer is the founder and Managing Director of Practice Sale Search, the leading practice brokerage in Australia, with the region’s largest database of registered buyers and practices for sale If you need help with your exit plan or would like to talk to someone about your practice, please call Simon on 1300 282 042 or email info@practicesalesearch.com.au. columnists leave won’t be enough to dissuade them and would be unlikely to create a change in mindset. Unpaid leave can often have a more immediate and positive response. It’s important to implement a policy of requesting proof of sickness. It’s common practice to have a policy, requesting a medical certificate or statutory declaration, when taking sick leave. For repeat offenders, it’s advisable that you request this every single time they are sick. Most importantly be mindful of mental health, perhaps now more than ever. This is a leading cause of many long-term workplace absences, and now the societal impact of COVID from a mental health perspective as well as a physical one should not be trivialised. People are suffering from its lingering effects for a myriad of reasons. Employers need to be mindful and considerate of the complexities that lie with mental illness, especially before taking action against any employee. Support fromorganisations like Beyond Blue can help as a starting point u AB Dental & Medical Employment Agency P:1300 658 915 M:0425 20 8860 E :pam@abrecruit.com.au W :www.abrecruit.com.au Addressing employee absenteeism in the COVID era Continued from page 114