FACT: A dental practice is typically the doctor’s most valuable and prized possession.
FACT: A dentist will typically sell a dental practice only once during his or her professional career.
Considering these facts, many dentists will make the wise choice to entrust the responsibility of selling their practice to a professional who has the knowledge and experience to facilitate a successful transition … a dental practice broker. We have found that our clients typically receive a higher value for their practices, have a more amicable relationship with their buyers following the sale, and experience much less stress and anxiety during the transition process than their counterparts who try the “do it yourself” approach.
Selling a dental practice is not like selling a home … it is a complicated process which extends far beyond simply finding a buyer and closing on the sale. While some practice owners may be able to identify a buyer who is interested in purchasing their practice with little difficulty, getting from that point to the closing table is the most challenging component of a practice sale. Determining the market value of the practice, finding the right buyer, negotiating the purchase price, drafting the asset purchase agreement, formulating the transition plan, negotiating the lease assignment, and obtaining practice financing are just a few of the key areas where a potential practice sale can be derailed and the experience, expertise, and guidance of McLerran & Associates can prove to be invaluable.
Doctors who are preparing to sell a dental practice often ask us what our role in the process will entail. Here are our primary responsibilities as your practice broker:
- Identify and accomplish the seller’s goals for the transition – Every doctor and practice is unique so it is imperative for us to spend the time to understand the seller’s individual situation and goals and formulate a transition strategy to meet their needs.
- Solely represent the seller’s interest throughout the process – While our goal is to put together a win-win transaction for all parties involved, our responsibility is to solely represent the seller’s best interest during the transition process. Beware of other practice brokers who offer “dual representation”, as it is impossible to represent the best interests of both the buyer and seller simultaneously.
- Determine a fair market value for the practice, maximize the value the seller receives at closing, and be able to support and articulate the value to interested buyers and their advisors.
- Construct a detailed marketing profile and cash flow analysis for the seller’s practice – The marketing profile includes all of the pertinent information a potential buyer and their advisors will need in order to evaluate your practice.
- Confidentially market the practice to qualified buyers and advertise the practice on a local, state, and national level via the web, print ads, seminars, trade shows, etc. We require all prospective buyers to sign a Confidentiality Agreement prior to receiving any information regarding your practice.
- Handle all inquiries from potential buyers and their advisors regarding the practice, including conversations, email correspondence, and showing the office after business hours.
- Work with the seller to identify the right buyer for the practice so that the staff and patients will be in good hands following the transition.
- Serve as a buffer between the buyer and seller throughout the process (particularly during price and contract negotiations) to preserve the goodwill of the practice and relationship between the parties.
- Provide draft contracts including the Letter of Intent and Asset Purchase Agreement.
- Provide an organized process so the practice sale and transition go smoothly, including managing all correspondence between both parties and all of their advisors (attorneys, accountants, consultants, lenders, etc.)
- Assist the buyer with securing practice financing.
- Assist the buyer with building an experienced team of dental advisors so that he/she is positioned for long term success following the transition.
As you can see, our team plays a vital role in the transition process. When you consider all of the responsibilities associated with owning/operating a dental practice along with the expertise and time necessary to fulfill the practice broker’s responsibilities, it is easy to understand why doctors who attempt to sell a dental practice on their own are often overwhelmed by stress and anxiety. Therefore, we encourage you to contact McLerran & Associates when it is time to start planning the sale of your practice.
Why Choose McLerran & Associates?
While it is important to understand the role of a practice broker and the importance of utilizing their services, it is also imperative that you hire the RIGHT broker to represent you in the sale and facilitate a smooth transition. In addition to handling all of the responsibilities discussed above in a professional and efficient manner, here are a few additional reasons that McLerran & Associates is the premier dental practice brokerage firm in Texas:
Experience & Expertise
Our team has specialized in providing practice appraisal and transition services to Texas dentists since 1987. We have been involved in over 1,000 successful practice transitions and understand the significant impact a practice sale has on both the professional and personal lives of our clients. With a diverse skill set and knowledge in finance, accounting, marketing, and professional sales, our team has the experience to craft a transition strategy to meet the goals of each client and expertise to properly value your practice, effectively market the practice to find a buyer who is the right fit, maximize the value our client receives for their practice, and work closely with all parties involved in the sale to facilitate a smooth transition of ownership.
We Only Represent Sellers
At McLerran & Associates, we work diligently to structure a win-win transaction for all parties involved in the transition but our fiduciary responsibility is solely to the seller. By exclusively representing the Seller, clearly disclosing this fact to the buyer, and assisting both parties in building a strong team of advisers, we have the ability to represent the seller’s best interest while ensuring the buyer has proper representation and is positioned for success following the purchase. Beware of working with a broker who advocates dual representation, in which they represent both the buyer and seller. Under this arrangement, the broker is obligated to share all details with both parties, including any statements made by either party concerning pricing or terms. Since the buyer’s and seller’s financial interests are typically converse to one another, it is nearly impossible for the broker to fairly represent both parties under the dual representation arrangement.
Marketing Your Practice
McLerran & Associates employs numerous effective marketing strategies to ensure that we identify a buyer who is the right fit for your office in a timely manner and maximize the value you receive for your practice at closing. We confidentially market our listings via our website (which ranks very highly on Google and provides your practice with strong national exposure), online dental communities such as Dentaltown, local and state dental journals, and local dental conventions and dental society/study club meetings. However, that is just the starting point. We are heavily involved in the local dental community and spend a great deal of time educating and cultivating relationships with potential buyers. When a buyer makes initial contact with our office, our focus is to get to know them (background, career goals, practice philosophy, personal financial condition, etc.) and determine what type of opportunity they are looking for. Because we place a high priority on developing meaningful relationships with potential buyers, we maintain a strong pipeline of qualified buyers and can immediately reach out numerous doctors who may be the right fit for your office immediately upon listing your practice.
Involvement in the Local Dental Community
At McLerran & Associates, we feel that it’s imperative to play an active role in the local dental community in order to keep a pulse on current market conditions and cultivate relationships with potential buyers and sellers. We accomplish this initiative by regularly attending and sponsoring local dental society and dental study group meetings, hosting seminars to educate buyers and sellers on the transition process, and networking with professionals who serve as valuable resources for our clients (attorneys, accountants, consultants, equipment reps, etc.). We also volunteer our time and make considerable monetary contributions to charitable dental organizations such as the Capital Area Dental Foundation.