Practice Orbit How Do I Keep Being an Independent Contractor After Selling My Dental Practice?
Selling your dental practice is a big step, but for many dentists, the journey doesn’t end there. Many of my clients come to me with the question, “How do I keep being an independent contractor after selling my dental practice?” They want to sell their practice and retire from ownership but still want the flexibility and fulfillment that comes from continuing to practice dentistry without the administrative burdens.
In this blog post, I’ll walk you through how to remain an independent contractor after selling your dental practice, what challenges to expect, and how Practice Orbit can help navigate this transition
1. Structuring the Sale to Include Independent Contractor Work
One of the first steps to remaining an independent contractor post-sale is negotiating a deal that includes this arrangement. Some buyers may want you to stay on for a transition period to help ease the handover with patients, and this is the perfect opportunity to discuss your desire to continue working on a limited basis.
I remember working with Dr. Paul, who had built a successful practice over 25 years. He was ready to sell but didn’t want to stop practicing completely. He loved interacting with patients and still had a passion for the work. During the negotiations, we structured the sale so that Dr. Paul could remain as an independent contractor for two days a week. The buyer appreciated the continuity this provided, and Dr. Paul was able to maintain his connection to dentistry without the stress of running the business.
By using Practice Orbit, you can connect with buyers who are open to flexible arrangements. Their platform allows you to outline your preferences in the sale agreement upfront, ensuring you’re aligned with a buyer who values your ongoing involvement.
2. Understand the Independent Contractor Agreement
Once you’ve negotiated your role as an independent contractor, you’ll need to ensure that the terms are clearly outlined in a legal agreement. This includes defining your responsibilities, pay structure, and work schedule, as well as detailing the expectations of both parties.
Dr. Lisa, another client of mine, didn’t realize the importance of having a clearly defined independent contractor agreement. After selling her practice, she agreed to stay on, but the expectations weren’t set in stone. She found herself working more hours than she intended and being called upon for administrative tasks she thought she’d left behind. After we revisited her agreement, we were able to tighten up the terms and give her the freedom she wanted.
An independent contractor agreement should detail your role, compensation (whether it’s a flat fee or percentage of production), and the duration of your contractor status. Practice Orbit can help you draft and review this agreement to make sure it aligns with your goals and keeps you protected from unwanted responsibilities.
3. Maintaining Flexibility While Avoiding Conflict
Being an independent contractor after selling your dental practice offers incredible flexibility, but it can also come with challenges. The buyer may have different ideas about how to run the practice, and as an independent contractor, you’ll need to respect their management decisions while maintaining your own autonomy.
Dr. Jane, one of my clients, sold her practice but stayed on as an independent contractor to continue treating her patients two days a week. At first, it seemed like the perfect arrangement, but over time, she found herself clashing with the new owner about how patient care was being handled. We had to work through these conflicts by revisiting her contract and setting clear boundaries.
The key to avoiding conflict is to communicate clearly and define your role in writing. Are you strictly providing patient care, or do you have a say in how the practice is run? Setting these expectations early on helps avoid friction down the road. Practice Orbit helps sellers and buyers establish clear guidelines and ensures that both parties are on the same page from the start.
4. Tax Considerations for Independent Contractors
When you become an independent contractor after selling your practice, your tax situation will change. Instead of receiving a W-2 like an employee, you’ll be paid on a 1099 basis, which means you’re responsible for paying self-employment taxes. This was something Dr. Kyle didn’t realize until after the sale of his practice. He hadn’t planned for the tax implications of being an independent contractor, and the first year caught him off guard.
As an independent contractor, you’ll need to keep track of your income, set aside money for quarterly estimated tax payments, and understand which business expenses you can deduct. It’s a good idea to work with a tax advisor who specializes in dental practice transitions to make sure you’re properly prepared. Practice Orbit connects you with financial professionals who can help you navigate the tax considerations of being an independent contractor, ensuring you’re not caught by surprise when tax season rolls around.
5. Retaining Patient Relationships and Building New Ones
One of the advantages of staying on as an independent contractor is the opportunity to continue relationships with your long-term patients. However, it’s important to manage these relationships carefully to avoid confusion about the new owner’s role.
Dr. Sarah, who sold her practice but stayed on as an independent contractor, found that some of her patients didn’t understand the ownership transition. They continued to call her for administrative questions and even billing issues, even though she was no longer in charge of those aspects of the practice. We had to help her draw a line between her role as a caregiver and the new owner’s responsibility for managing the business.
To maintain patient relationships while respecting the new ownership, it’s essential to clearly communicate the transition to your patients. Let them know that you’ll still be available for their care, but that the new owner will handle all administrative matters. Practice Orbit provides guidance on how to navigate patient transitions and ensure a smooth handoff, protecting your relationships while helping the new owner establish theirs.
Conclusion: Staying Independent After Selling Your Practice
So, how do you keep being an independent contractor after selling your dental practice? It starts with negotiating a sale that includes this arrangement, clearly defining your role in an independent contractor agreement, and staying flexible while avoiding conflict with the new owner. It also means planning for the tax implications of being a 1099 contractor and managing patient relationships effectively.
Selling your practice doesn’t mean saying goodbye to dentistry forever. With the right structure, you can continue doing what you love—practicing dentistry—without the stress of ownership.
Practice Orbit is the perfect partner to help you navigate this transition, ensuring that you sell your practice on your terms and keep your independent contractor role intact.
Whether you’re ready to sell your practice or just exploring your options, Practice Orbit can provide the tools and support you need to achieve your goals. By connecting you with experienced buyers, drafting contracts, and offering expert advice, they make the process of selling your practice and staying on as an independent contractor seamless and stress-free.