Your dental practice is your most valuable asset and represents a significant portion of your retirement nest egg. Therefore, selling your practice has massive financial ramifications. Selling your dental practice is far more complicated than finding a buyer and closing the deal. To strike the best deal, you need to prepare both mentally and financially.
To sell your practice, it’s important to position yourself in the best possible light so you get the right value for your dental practice. To make a great impression on your buyers, you must work with dental consultants who offer dental practice management solutions to improve your dental practice.
If you want to sell your practice and don’t know where to start from, here are some tips to help you out.
Identify Your Goals
Start by defining your goals for selling your dental practice. Think about what’s most important for you and what are you trying to achieve with the transition.
Are you looking for maximum financial return and don’t have any time constraints? Flexible timing can make the transition easier to execute as opposed to when you have a particular date in mind. If time is a critical factor, you may have to compromise on other aspects such as the price.
As a responsible owner, you might also be worried about your staff. You don’t want any of your employees to lose their job after the sale. Thus, your aim should be to find a buyer who will retain your staff.
Having clearly defined goals helps you negotiate the terms, determine where you have to compromise, and ultimately, make the right decisions.
Have Realistic Expectations about the Value of Your Practice
It’s pretty common for dental practice owners to have an inflated view of how the market will view their practice. For example, a seller might believe that the buyer will pay them 3 to 5 times the EBITDA (earnings before interest, tax, depreciation, and amortization), which small businesses could expect in the past.
However, things are more complicated now. For instance, a 64-year-old dentist who is supposed to retire in a year or two might have patients from the same demographic. A potential buyer will take this into account and think of the patients as depreciating assets.
While they won’t point this out, they will be willing to pay a price much lower than you expect. To have realistic expectations about what your dental practice is worth and determine a reasonable listing price, opt for dental consulting services. Dental consultants will tell you the true worth of your practice and how you can increase the value of your practice.
Keep Essential Facilities and Equipment Well-Maintained
Evaluate your dental facility to ensure that everything is up to date so as to maximize the value of your practice. Address all issues so that the buyer won’t have to incur any significant expenses after stepping in.
You don’t want to give them any opportunity to lower the price. However, this doesn’t mean that you spend way too much on the equipment because the large amounts you invest may not lead to big changes in sale price. Once you’ve agreed on a timeline for the sale, make incremental improvements to ensure that all significant assets are kept up to date.
Arrange Visits and Disclose Important Information
If you’re the owner of the dental practice, you should be able to sell it better than anyone else. Try to arrange visits for potential buyers when you are around.
This way, you have the opportunity to deliver your sales pitch, explaining the key benefits of your dental practice, as well as sort through the serious buyers.
Keep in mind that visitors may request information, such as details of the property lease, accounts, CQC registration details, management accounts and profiles of the dentists serving at the practice, so gather all the necessary documents and stay organized. However, make sure that the prospective buyers sign the non-disclosure agreement before you share any information with them.
Market Your Practice
In a confidential manner, of course, start marketing your dental practice through online marketing, website listings, and association websites.
Unless you are a dental practice owner with a business degree, you may struggle with advertising your dental practice. In that case, you can hire a professional.
Prepare Your Staff
If you want the transition of the sale to have minimal impact on your staff, you will need to ensure a few things without even informing your staff of your plans. What you should do to prepare them is make sure their contracts are up to date and signed.
Similarly, confirm the validity of their immunization, GDC, and indemnity certificates and make sure they are all up to date. Also, look into whether they are up to date with their CDP training.
Stay Honest and Upfront
Hiding things or being dishonest could not only impact the agreed upon price but also trigger a legal case. Misrepresenting information or a breach of warranty is not good. To avoid any such issues, stay upfront and honest throughout the sale.
Seek Dental Practice Consulting Services
During the transaction process, the prospective buyers may have some terms and conditions. To make sure those terms are in your favor, you need expert advice. Dental practice is a niche market and therefore, before you go through with the sale, you should opt for dental practice consulting services. Dental consultants possess in-depth knowledge of the industry and offer valuable guidance.
White and Associates Practice Consulting has the experience, business expertise, and skills to strike the best deal. Our team consists of highly experienced dental business experts with a solid passion for dentistry. Our members seek to work closely as your partner and offer proven ROI-driven dental practice management solutions.
When it comes to selling your dental practice, the company’s dental coaches are always available to guide you through the sale process and offer insightful dental practice transitions services. To talk to one of the company’s expert coaches, call today at 952-432-3322.
Author Bio: Christian specializes in all areas of practice management. His strong background in the financial services industry gives him a fresh perspective that helps dental practices succeed on the business side. He has consulted many dental clients on “The New Patient Cycle” in dentistry: Discovery, Conversion, Loyalty, and Referral. Christian earned his Bachelor of Arts in Business Administration, specializing in finance, with a minor in Management Information Systems from Augsburg College in Minneapolis, MN.