Dental Practice Transitions for Sellers
Have you started thinking about the best path for selling your dental practice? Or maybe you’re not sure the best timing for transition? We help answer your questions with some common inquiries included below. But we also know that transitioning a practice can be a complex decision and we want to provide the personal advice you need. So, please request a free transition assessment and we’ll be glad to setup a time to talk about the specifics of your unique situation.
Why use a dental practice broker?
Not all dental practice owners will need to work with a transition broker, but it’s usually recommended if this is your first or second practice sale. When you work with a professional transition consultant, you’re hiring a trusted advisor, negotiator, and closing specialist. And in most cases, dental practices sell faster at a higher selling price when you entrust the entire process to an experienced dental broker. Brokers have developed the skills necessary to establish fair market value, run cash flow analysis, and utilize contracts that protect you and still close the deal in a timely manner. They also have the marketing power and network of potential buyers that help save you time and money.
What pitfalls should I avoid as a seller?
Asking Price – While attorney’s and CPA’s are helpful and often important partners, they are not necessarily best equipped to establish an asking price. You also want to avoid basing your price simply on a multiple of EBITDA, revenue, or production as this can often lead to incorrect pricing. And while Wall Street pricing methods are better than multiples used by many brokers, this methodology can still leave important questions unanswered and short change one party or the other.
Time – Do you have the time to respond to inquiries in a timely fashion and address buyer’s concerns? Buyers expect almost instant access and your full-time commitment is more than selling a practice.
Confidentiality – Your goal is to create the best impression for buyers as well as your staff and clients. Once a prospective buyer is identified, this could be an immediate compromise of your confidentiality. Do you really want buyers calling the office because you haven’t had the time to respond to an email or mobile call?
How long does it take to sell a dental practice?
The answer depends on several factors. Where are you located? Rural will likely take longer than an urban area and generally highly visible practices are more desirable and sell faster. Profit is another key factor in time to sell. Generally, more profit equals less time on the market, but this is something you can discuss with your dental practice broker as each situation is unique. Also, your procedure offerings influence the sale time. For example, the more specialized you are as a GP the more time it may take to locate a buyer.
How much does a broker charge?
Many brokers offer a one-size fits all approach, but we offer flexible pricing depending on your situation. We can provide a turn-key solution that takes care of the entire process from start to finish or more customized packages when needed. For example, we can provide in-house legal representation and present finished documents. Or we can provide market pricing analysis or fully certified practice appraisals depending on specific needs. We are also willing to work with your trusted tax and legal advisors to help shepherd the process. Each client has specific needs and we act in an advisory capacity to see a project through to its successful completion. But most of the time, our fees fall well below 10%.
How does a broker find a buyer in my area?
Each selling situation is unique, but in general, we market listings through popular dental listing websites as well as national and state-specific dental associations. We also take advantage of digital advertising channels such as Google to bring qualified buyers directly to our website. We usually will run blind ads in order to help qualify buyers and direct them to dental practices that are best for our clients and the buyer’s situation while maintaining client confidentiality. Our commitment to you is that we will exhaust every effort to sell your dental practice as quickly as possible at the highest market price.
What does a listing agreement look like?
While many brokers require a listing agreement that locks you in to their terms, we do not use a listing agreement. We work by verbal agreement that you commit to work with us for 180 days. If you wish to move on because you’re not satisfied, we simply ask that you provide 90 days’ notice. What other broker provides this level of personal service with a focus on performance?