Get rewarded

The time has come to sell your dental practice. Your revenues and profits are at their peak. Your overhead is under control and your practice looks ready for listing. You have worked extremely hard for many years to set the stage for your transition. In your opinion, you have all of the pieces in place for a successful sale at the highest and best sale price and terms and conditions of settlement.

What next?

To begin the process, retain an excellent practice evaluator with solid credentials in the dental world to assess the value of the dental practice. After your appraisal is completed, a dental practice broker with experience and good marketing skills and contacts should be hired to list the practice for sale. This step takes away the bias of listing a practice at a price that is not realistic and is based solely on the owner’s opinion. An independent source is the most realistic evaluator for placing a fair market price on the practice to help it sell.

A buyer will probably have to finance the acquisition price and a lender, just like in the sale of a house, will look at an independent appraisal with more credibility than at an amount placed on the practice as the value by the owner. Lenders are key elements to the sale process and can greatly assist the buyer as well as the seller in a realistic approach to the transition.

Listing agreement

You will want your attorney to review the listing agreement before you sign it. Remember that a patient comes to you for advice regarding oral hygiene. Don’t pretend to know the intricacies of the fine points in a document that may result in the largest financial transaction of your career.

Retain an attorney with experience in reviewing dental transactions. Typically the practice broker or your CPA, if experienced in dental sales, will be able to give recommendations about who to retain as the attorney. Don’t hire your best friend, the “plaintiff’s” attorney with a specialization in personal injury law to assist you. You will want an expert on your side leading to the sale of your dental practice and throughout the process where advice will be needed on a very frequent basis so that decisions can be made in a reasonable time frame.

Finding a qualified buyer

The dental practice broker should have the ability to find one or more qualified buyers for you. Once the buyer is ready and has agreed upon the purchase price and has obtained the appropriate financing, consult with a CPA who has experience representing dentists in practice sales. The CPA with an expertise in representing dentists will be able to assist you in the allocation of the purchase price so that you pay the proper amount of tax liability resulting from this type of transition. A CPA with audit knowledge and expertise in procedures regarding manufacturers, as an example, probably lacks the knowledge to be of much assistance to you in assisting in the sale of your dental practice.

A CPA who has experience working with dentists will understand equipment valuation guidelines, inventory and supply amounts typically available at a closing, non compete and non solicitation agreements and their geographic terms and time frames and guidelines for goodwill allocations, among other peculiarities common among dentists. Many times a buyer needs assistance in the early stages of the transition period. Are you prepared to remain for a short time to help the buyer? This is an important question that the practice broker will have you prepared to answer.

Settlement preparations