Are you considering to sell your dental practice, but not sure where to go? Dental practice owners have always wondered if it is best to sell their office themselves or through a broker. There are advantages for each, but remember a Dental Practice Broker works on a performance basis. If the dental practice does not sell, the brokers do not get paid. By using a broker you do not receive 100% of the sale price, but you avoid dealing with buyers, advertising your practice and having to worry about the confidential nature. Whether you decide to use or not use a brokerage services, you are still required to furnish all financials, provide tax returns, submit staff information, and make sure your practice retains its production.
When selling a practice, there are 4 general areas to cover: Evaluating the practice, marketing the practice, working with potential buyers, and accepting the offer.
You have probably heard from many sources that dental practice sale prices are based on a percentage of the previous year’s collections and you would be correct! Specific to Southern California, most practices sell for up to 100% of their last year’s collections. If there are unique factors about the office, it may sell for over 100% of collections (First Choice Practice Sales has a dental office for sale in Anaheim, CA that is selling for 130% of collections!).
To ensure the highest selling price, a dentist must keep their practice’s production on track. This builds buyer confidence in the office and will command a higher selling price. In addition, if the buyer requires a lender, the dental practice will look better in the bank’s eyes with consistent cashflow and may result in up to 100% financing (View our list of preferred Dental Practice Lenders).
How does one market a dental practice as a confidential sale and provide maximum exposure? Reno Iannini, a broker for First Choice Practice Sales, tailors each dental marketing campaign for each practice based on factors such as: the geographical location, makeup of practice (patient type), the dentist profile, collections, staff information, and how the dentist runs the practice. By utilizing online and offline marketing strategies, First Choice Practice Sales is able to create your custom marketing strategy.
Most brokers should have their own database of clients who are actively seeking to purchase an office, but how does a brokerage ensure all their clients know about their newly listed practices? At First Choice Practice Sales, we provide our clients with weekly email updates for new listed practices and more. By ensuring our clients are aware of all available practices, each practice receives maximum exposure while focusing on the confidential nature of the sale. First Choice Practice Sales’ marketing campaigns have been proven to generate interest.
With our past campaign for a dental practice for sale in Laguna Niguel, we received a 21% opening rate. In West Hills, we received a 27% opening rate! Imagine the interest your practice in Anywhere, CA will receive?!
In addition to listing your practice on our website; www.firstchoicedds.com, we utilize additional external marketing campaigns both online and in print to generate additional interest for the selling practice!
Once your practice is advertised and a buyer shows interest, are you prepared to speak to with them? Speaking with a potential buyer is a fine art that can go wrong very quickly. Are you certain the buyers are ready to purchase and aren’t just tire-kickers? While there are other factors you will need to address, you can avoid this stress by hiring a full service practice broker. In the Southern California region, First Choice Practice Sales shows potential buyers your practice, screen the buyers, and assist in writing up the offer for you to review. We ensure both the buyer and seller are represented every step of the way.
One would assume once the offer has been accepted 80% of the battle has been fought, and they would be wrong. Once a seller has accepted the offer, the real work begins! Depending on the how the deal was drafted (cash buyer, financing required, carry-back, etc), a seller will be required to provide financial information for the lender, buyer(s), and possibly open their practice for a consultant to review. While there are multiple other barriers a buyer and seller must navigate, utilizing a broker will assist you in avoiding headaches and other hiccups that may occur. During a buyer’s due diligence they still have the option to NOT purchase your office!
After the buyer’s due diligence and the close of escrow, the buyer is now the proud new owner of the office! At this point, the broker’s job is usually done, but at First Choice Practice Sales we want to ensure the success of the practice. How? Through websites such as DentalAssets and The Dental Locater, First Choice Practice Sales is interested in bringing you the newest technology, equipment, and opportunities for you to increase the online presence of your office! Come take a look at the newest technologies available from around the world at DentalAssets.com, a sales, marketing, and social networking platform developed for the dental industry. In terms of growing the practice, DentalLocater is an online directory website that boosts your dental office’s online presence!
Learn more about the process of selling a practice by reading our Guide to Selling Your Practice.
Guide to Selling Your Practice (PDF)