It’s natural for you to be most concerned with your own needs, but it’s also important to understand the wants and concerns of dental practice buyers. Understanding the buyer’s perspective and needs allows you to prepare for their questions and puts you in a better position for a successful sale.
1. Provable Boos and Records
Buyers want proof of the sales and profits that the practice has made in the past.
2. Reasonable Price and Terms
Usually, buyers won’t even look at a practice that is not priced competitively.
3. Financial Leverage
First Choice Practice Sales works with all of the top industry lending sources. Most will fund 100% of practice acquisition capital. Smart buyers will want to use financial leverage to maximize their return on investment and income – i.e. use leverage to buy a bigger practice and a better bottom line with the same amount of cash down.
4. SDC – Seller’s Discretionary Cash
Discretionary income is perhaps one of the most critical factors in a buyer’s decision. How much money will a buyer make from owning this practice? Your First Choice Practice Sales Agent will work with you to re-cast your financials to reflect the actual SDC from the practice. Lenders often refer to these items as “add backs”. They are discretionary expenses that maybe non-reoccurring for the new owner and can be added to the net seller’s income.
5. Furniture, Fixtures & Equipment
Buyers will want a complete list of your equipment and will inspect it to insure that everything is in good working order.
6. Lease
Any buyer will want a good lease (whether your existing lease is assigned or a new lease is written).
7. Training
Most buyers have not owned your type of practice before and will need a transition in order to run the practice effectively, profitably, and ultimately successful.
8. Appearance
Nice looking practices sell first! Buyers deduct large amounts from their offering price for practices that are in less than top shape. Keep your practice neat, clean and in good repair to sell it faster and for a better price.
9. Covenant not to Compete
Buyers are afraid you may go into competition with them and take all their patients. A written promise not to compete with an appropriate distance and time is normal for many practices. This may also provide tax advantages for both buyer and seller.
10. A Good Reason for Sale
Buyers are always concerned about this. They are afraid you may be selling because of some undisclosed fact which may hurt the practice in the future. Buyers must see a logical reason for sale – without it they will assume the worst!
11. Time is of the Essence
Buyers are often looking at more than one practice when they make an offer. A buyer’s offer can be withdrawn any time until it is accepted and delivered back to the buyer. If you don’t respond in a reasonable time, the buyer may lose interest in your practice and move on to another.
12. No Surprises
Surprises will scare away any buyer. If we know all the facts up front, almost any problem can be solved or overcome in negotiations. Please be sure that you have told us about any problems, including the following:
• Are you behind in tax payments?
• Are there any problems with the landlord or lease?
• Are there any loans or liens against the business?
• Are there equipment leases?
• Are you in compliance with zoning, health and other regulations?
• Is there any litigation pending?