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Your Exit Strategy by Jay Geier

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Exit strategy is one of those subjects most people don't spend a lot of time thinking about, but it takes a lot to engineer. To get the most out of this article, you will need a calculator, a few sheets of blank paper and something to write with.

I've been studying success and looking at what it takes for people to be financially independent for a long, long time, and have been a business owner since I was 18 years old. I've had thousands of dentists come through our coaching program at the Scheduling Institute where we focus on creating their exit strategies. We've helped them not only create their plan but accumulate wealth along the way.

Let's Talk Time

The first problem with leaving your practice is money. Most people have no idea how much money is enough money. When you can't answer the question of how much is enough, the answer is always one more dollar. And saving money takes time.

As a business owner you won't be guaranteed a fixed income, but you also won't be restricted by what someone else sets up for you. Many people work for a company for some period of time, get a pension or some guaranteed payment, and on a certain date, all of the sudden, they just stop working. They move into a different economic model - a fixed income. This is not you.

To create your exit strategy you have to be very clear about your model - 90 percent of doctors I work with aren't clear about it. They cannot visualize exactly how much money they need to exit. They cannot visualize exactly what they need. They cannot visualize what it's going to take to be at peace with the decision.

Do you have a plan? Are you clear about it? Does the thought of talking about it evoke fear in you? If it does, that's perfectly natural and common, but it is also foolish. Make sure you have a rock-solid plan because you can't get back or create more time. There are many doctors I work with in their 50s and 60s who say, "I wish I had the time back." You have to deal in the reality of your current situation of how old you are and how many years you think you have left. If today you have no idea when you're going to exit, work off the age 65.

Let's Talk Money

Money is really what determines your ability to exit or not. There are a few truths you need to understand.
  1. The majority of people don't have a healthy relationship with money.
  2. Whatever your current financial situation is - positive or negative - you have what you deserve.
  3. If making money has always been a struggle for you, you must study people who make a lot of money and focus on getting good at figuring out how to make money.
  4. Almost everyone's income is too small.
When your income is too small, the first thing that gets sacrificed is funding your exit because it's the "extra thing" - the thing no one holds you accountable for. No one sends us a bill for our exit. Exits are funded by conscious decisions, which unfortunately a lot of people just don't make along the way.

Do this exercise. Draw three boxes on a piece of paper. Label one box "cash," the next box "real estate," and the third box "practice."

Cash is defined as actual cash, gold, IRAs, retirement plans, savings, mutual funds, stocks, bonds, anything that is a cash equivalent. Write down your numbers in that box. Then subtract any consumer debt you have so you're left with a total.

In real estate there are two important numbers. First is the current value, which is what you could actually sell the real estate for today. Be conservative. Don't put inflated values. The second number is the debt number. Take the value minus the debt, and write down that number in your real estate box. That's your equity.

For most doctors a major portion of your assets and your net worth is in the value of your practice. As a rule of thumb, a business is valued at three times IBITDA (income before interest and taxes and depreciation and amortization have been subtracted). So multiply times three or four, and that's a typical valuation of a business. Write that in your practice box.

Look at your numbers. If you tried to live off the cash, would you have enough? Most people don't even have enough cash to pay off their real estate, let alone live the rest of their lives. If you sold your practice for $600,000 or $700,000 and you pay the taxes on the sale, it leaves you with a year or two of income. And the worst part is... you killed the golden goose.

Now in the cash box write down how much money you save every month. Take how much you save times the number of years you have left to work in the practice and do the math. Do your numbers add up?

The first step to creating your exit strategy is to determine how much cash liquidity you need at a certain age. Example: A 40-year old doctor wants $5 million more net worth by the time he's 60. Divide $5 million by 20 years divided by 12 months; that's $21,000 a month you must save for 20 years and you'll have $5 million.

So pick an age, pick an amount, and then start making the monthly payment to yourself. It's very important and quite simple. Don't overcomplicate it!

After years of helping dentists save for retirement, I have found $20,000 per month is a good number to strive for. It might be mind-boggling today, but saving consistently over a sustained period of time will create wealth for your future.

Second, take your debt and do the same thing. Pick an age and divide your debt by the number of years you have left. Then divide that by 12 months. That's your debt pay-off amount.

Let's Talk Practice - Your "Golden Goose"

Now, let's talk about your practice. Here is a story about one of my clients:

He was young and had already accumulated roughly $7 million. The last $1 million was the sale of his practice about five years before we met. Prior to selling he had a net income of $700,000 a year from the practice. In a very short period he turned $7 million into $3 million. He admits today his mistake was selling the practice. Had he just kept his $700,000 a year income and modified his involvement in the practice, he would have never had to tap into the other $6 million. But without income he went through it fast. In order for you to sell your practice, you should have a lot of cash and all your real estate paid off.

You need to be insightful enough to initiate change on your own. Why don't you save enough money? Why haven't you saved enough money from day one? Why didn't you grow the practice? Why weren't you more ambitious? It's coming whether you want it to or not. So why not go ahead and just dictate the change and what your future looks like? Plan your exit strategy now and commit to working on it every day. Increase your net worth, reduce your debts and starting looking at ways to use your practice to produce more cash.

Author's Bio
Jay M. Geier is a speaker, consultant and the president and founder of the Scheduling Institute. He helps his clients reach new levels of success and create a lifestyle they dream of, using their practice as the vehicle. Jay hosts free one day Exit Strategy Workshops for his Scheduling Institute clients where they get plugged in with tools and specific strategies to create their exit and accumulate wealth along the way. For more information on the Scheduling Institute programs available for orthodontists or the Exit Strategy Workshops in 2013, call 877-215-8225 or e-mail info@schedulinginstitute.com.
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September 2025
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