Dental Practice Owners: Why It’s Smart to Hire a Broker to Sell Your Practice
Are you thinking about selling your dental practice, but you aren’t sure where to get started? Some dental practice owners consider a DIY option as an alternative to hiring a broker. While there are benefits to both options, it is important to remember that your dental practice broker is paid on a performance basis. So, the person doesn’t get paid if the practice doesn’t sell. Hiring a broker means that you won’t receive 100% of the sale price. But you can’t put a price tag on the headaches you avoid because you don’t have to deal with the advertising, buyer communication, negotiations, and more!
Regardless of your choice to use brokerage services, you will still be responsible for providing information about financial reports, tax returns, staff details, and you need to ensure that the production of the practice stays consistent.
Here are four important things that need to be handled when you are preparing to sell a practice:
In most situations, the sale price of a dental practice is calculated with a percentage of the previous year’s financials. For example, it is common for the practice to sell for 100% of the collections in the previous year. Other unique factors in the office could bump up the sale price. If a dentist wants to ensure the highest selling price, then the production of the practice needs to stay on track. This information not only builds trust with the buyer, but it looks good if the buyer is working with a bank for financing.
What is the best solution for marketing a dental office to keep it a confidential sale, while ensuring optimal exposure? Our team at JRA adjusts each dental marketing campaign with custom factors for each practice, such as patient demographics, geographical location, profile of the dentists, staff information collections, and practices used in the dental office. This information allows us to find the right buyer that fits your office profile.
When a potential buyer shows interest in the practice, the conversation can go wrong if you don’t have experience with the negotiations. Some people are just kicking the tires while others are serious about the purchase. You need to be able to read the situation and address other factors. These conversations and details are best handled by an experienced practice broker. We can screen potential buyers, show them the property, and oversee the offer and paperwork. Our goal is to make sure that both the sellers and buyers have fair representation to support negotiations.
Even though it seems like the deal is almost done when the offer is accepted, it is just the start of this process. In fact, you’ll find that the real work starts when the offer is signed. As a seller, you will need to provide financial information for the buyer, lender, and practice consultant. Other barriers might need to be navigated, depending on the situation. You must be supportive in the due diligence because a signed offer doesn’t mean that the buyer is guaranteed to purchase the office.
The most effective way to ensure success is by working with an experienced team. JRA is here to help you close the deal while ensuring the satisfaction of both parties.