Seller Articles

We have talked about what buyer’s want in the practice, but here are some things that buyer’s hate to see.

1.  High overhead – even though it can be corrected, this is something dental practice buyers often don’t have the vision or knowledge on how to correct.  Even in high producing practices, if the overhead is too high, the buyers freak out.

2.  No way to increase the practice production or income.  If you are doing everything from root canals to orthodontics, you may be maxing out the practice.  I’m not saying it’s impossible to find the right dental practice buyer, but if you’re doing all of the procedures, it can be a bit more challenging.

3.  Old practice from equipment to the shag green carpet and the orange laminate counters.  If it’s been 30 years since you have updated anything in the practice, don’t expect a premium price.

4.  Remote practice – A practice in a small town 3 hours from any major city is harder to sell than a practice in a desirable area.  Give yourselves 2 years to sell dental practices in remote areas.

5.  Relatives working in the practice.  It’s okay to have a wife or child as an employee.  But if you have a wife, sister, daughter and son working in the practice and two of them will be leaving upon the close of the sale, you will have problems selling the dental practice.

These are some of the things to look at as you get closer to retirement, or just want to transition out of your dental practice.

​We have talked about what buyer’s want in the practice, but here are some things that buyer’s hate to see.

1.  High overhead – even though it can be corrected, this is something Veterinary practice buyers often don’t have the vision or knowledge on how to correct.  Even in high producing practices, if the overhead is too high, the buyers freak out.

2.  No way to increase the practice production or income.  If you are doing everything from general checkups to emergency procedures you may be maxing out the practice.  I’m not saying it’s impossible to find the right Veterinary practice buyer, but if you’re doing all of the procedures, it can be a bit more challenging.

3.  Old practice from equipment to the shag green carpet and the orange laminate counters.  If it’s been 30 years since you have updated anything in the practice, don’t expect a premium price.

4.  Remote practice – A practice in a small town 3 hours from any major city is harder to sell than a practice in a desirable area.  Give yourselves 2 years to sell Veterinary practices in remote areas.

5.  Relatives working in the practice.  It’s okay to have a wife or child as an employee.  But if you have a wife, sister, daughter and son working in the practice and two of them will be leaving upon the close of the sale, you will have problems selling the Veterinary practice.

These are some of the things to look at as you get closer to retirement, or just want to transition out of your Veterinary practice.

Whether you have owned your veterinary practice for 40 years, or owned it for 5 years, selling your  practice does not mean you are done practicing.  We often meet with doctors who are sick and tired of managing their staff, doing the bookkeeping, playing the games with the government agencies, dealing with the ups and downs of the economy, changing environment of the profession and on and on.  The doctors are about to crack, but think they cannot yet sell their practice as, according to their CPA or financial advisor, are not yet financially ready to retire.  We counter this by asking them “who said you need to retire?”  You can “harvest your equity” and either work back in the practice, or go work for another practice.  What the CPA’s and financial advisors may not see is that your veterianry practice collections numbers are going down.  Or, your blood pressure is sky rocketing due to the above mentioned challenges of managing your practice to the point of a heart attack coming right around the corner.  If you have a good amount of equity in your practice, we can sell your practice and you can put the cash in the bank and work as an employee until you are ready to retire in 5, 10, 20 years, or as long as your heart desires.  Transitioning out of your practice may be the way to enjoy your profession again.

Selling a dental practice is a complicated process.  Don’t go at it alone.

Selling a dental practice is a complicated process that involves numerous steps including determining the market value of your practice, finding the right buyer, negotiating the purchase price, purchase agreement and lease assignment, and facilitating the transition of ownership (just to name a few).  Employing the services of a trusted professional can make a tremendous difference in the success of your transition.  Here are the top 5 reasons to hire a practice broker when selling a dental practice:

1. To formulate a transition strategy to meet your individual needs
Not all practices and all doctors are the same.  A good dental practice broker will listen to your specific needs and goals to develop an individually tailored transition strategy that fits your situation.  There are many ways to structure a practice transition, including a walk away sale, associate to purchase, phased sale, and partnership arrangement.  When selling a dental practice, choosing the right transition strategy for you and your practice is the first step towards a successful transition.

2. To confidentially market your practice to find a buyer who is the right fit 
Utilizing the services of a practice broker will provide you with the opportunity to market your practice to a broader range of potential buyers, thereby increasing the likelihood of finding a doctor who is an ideal fit for your office as well as shortening the time frame required to complete the sale.  The broker will oversee all communication with potential buyers and their advisers, which can take a significant amount of time and effort.  Delegating this responsibility to a seasoned professional will allow you to focus on the operation of your practice and enjoy your personal time rather than spinning your wheels talking to countless potential buyers.  To protect the value of your practice during the marketing process, the broker should require each potential buyer to complete a confidentiality agreement prior to receiving any information regarding your practice and show your office only after business hours.

3. To maximize the value you receive for your practice
Your dental practice is one of your most valuable assets and the proceeds of the sale will likely be used to fund a significant portion of your retirement.  Therefore, it’s crucial that you maximize the value of your office at the time of sale.  Determining the market value of your practice, articulating the practice value to potential buyers and their advisers, and maximizing the price you receive at closing are key responsibilities of a practice broker.  Practice brokers are typically paid a commission based upon a percentage of the practice sales price.  It is in their best interest to get you the highest possible price for your practice.

4. To represent your best interest during the transition process
A dental practice broker’s goal should be to structure a win-win transaction for both parties. Rather than trying to force a square peg into a round hole, they work to ensure that the needs of the buyer are met through the opportunity that the seller is presenting. The broker also serves as a buffer between the buyer and seller to preserve the goodwill of the practice and relationship between the parties during negotiations.

5. To provide a structured closing process to ensure a smooth and timely transition of ownership
Navigating the closing process is often the most tedious and stressful part of selling a dental practice.  Once you have identified a buyer for the practice, there are numerous steps involved in completing the sale, including negotiating the practice purchase price, letter of intent, asset purchase agreement, assigning the lease, securing practice financing, announcing the sale to the staff and patients, etc.  A dental practice broker will walk you through each step of the closing process to ensure a smooth and timely transition of ownership.

These are just a few of the reasons to employ the services of an experienced practice transition consultant when selling a dental practice.  Planning in advance and building a strong team of advisers will ensure that your practice transition is a success.

-Rod Johnston, MBA. CMA

By working with trusted industry specialists, dental practice owners can ensure a swift profitable sale for their business. The team at Omni Dental Practice Group has many years’ experience within the dental practice marketplace. They have helped hundreds of owners understand the sales process and worked with a range of clients to ensure their practices are sold with a seamless precision for lucrative returns. In this article, their experts explain the business sale process and how Omni Dental Practice Group prepares business owners for the sale of their dental practice.

1. Financial Reporting
A critical element in the sale of any business property is financial reporting. Buyers will complete due diligence on the company they are purchasing and it is important all financials are in order and ready for review. Omni Dental Practice Group helps business owners complete the financial reporting process. They gather the required documents and ensure the documents are completed accurately and according to the strict standards within the industry.

2. Consolidating Business Resources
During the search for a local dental practice for sale, buyers will be reviewing the market for practices that are lean and do not have excess resources to manage and pay for over the long term. After assessing the finances of the practice, Omni Dental Practice Group works to consolidate the business’s resources, removing unnecessary expenses related to vendors, staff, and equipment and helping business owners understand the resources that are important to their company and potential future buyers.

3. Remodeling Work
In consulting with dental practice owners, Omni Dental Practice Group will advise them on potential remodeling requirements. They will guide owners on the paintwork and property upgrades required to ensure the practice is sale-ready. This process is completed alongside trusted building inspection teams that analyze all areas of the property to determine whether any upgrades are required before placing the practice on the marketplace. Any issues in the practice will be highlighted by the buyers’ representatives during their due diligence on the practice, and so sellers that finish remodeling work proactively and ensure all problems are resolved can showcase their commitment to the sale.

4. Analysis of Practice Value
When getting their dental practice ready for sale on the marketplace, owners must consider the optimum value for the company and how they can harness this valuation to attract the right types of buyer for the organization. Omni Dental Practice Group has significant experience in this area of the marketplace. They can help business owners detail the most important elements that determine a practice’s value. For example, they know that margins are more important to buyers than gross production levels. And so they can use this knowledge to value the practice at the highest rate possible according to market demand.

Omni Dental Practice Group is a clear leader within the local industry. To learn more about the company and its services, contact their offices directly today at 877.866.6053 or visit their website at omni-pg.com.