The sale of a dental practice is one of the most important events in your professional career. If handled properly, it should also be a rewarding and profitable transaction for all parties involved. To ensure a successful transition, it is important to follow these crucial steps:
1) Begin the planning process three to five years in advance of a transition. There are countless ways to sell a dental practice. Therefore, it’s important to meet with a local practice transition consultant/broker to determine the best transition strategy to meet your individual goals leading up to and following the sale. Another advantage of beginning the process three to five years before a sale is the ability to address and correct issues that could have a negative impact on practice value, thus ensuring that you maximize the value of your practice upon the sale and position the future practice owner for success.
2) Once you have selected a transition strategy and prepared your practice for sale, you are now ready to initiate the transition process. The first step in this process is to collect all of the information required for your practice broker to determine the market value of your office: practice reports, financials, office lease, equipment list, pictures, etc. Upon establishing the value/asking price, your broker should construct a comprehensive practice profile that will be utilized to confidentially market the practice to prospective buyers.
3) When you sell a dental practice, maintaining confidentiality during the transition process is extremely important. Your broker should require all potential buyers to complete a confidentiality agreement prior to receiving any information regarding your office. The broker should also oversee all communication with potential buyers and their advisors and handle initial practice showings after office hours. Should a buyer determine your practice is a good fit after reviewing the profile and visiting the office, a follow up meeting will likely be arranged to allow both doctors to get to know each other.
4) The next step is to find the right dentist for your practice. To sell a dental practice, some brokers will simply list a description of your practice in various journals and their website with the hope of coming across a good fit. This approach doesn’t cut it! To ensure that prospective buyers are a fit for your office, it is extremely important that your broker work diligently to cultivate relationships with all prospective buyers to understand their needs, goals, and skill set and match them with the appropriate practice. By taking a more hands on approach, the broker is more likely to find a quality buyer in a shorter amount of time.
Once an ideal buyer has been identified, the transition process has truly just begun. In Part 2 of Steps to Sell a Dental Practice, we will address the steps involved in navigating the closing process.
This article is brought to you by David McLerran of McLerran & Associates, specializing in How to Sell a Dental Practice in Texas.