Selling Your Dental Practice: How to Protect the Goodwill Your Practice Has Earned
When selling your dental practice, the most valuable component of the price is the portion allocated to “goodwill.” Goodwill represents the intangible assets of a business—the difference between an established, successful dental practice and one that has yet to achieve success.
In an established dental practice, goodwill consists largely of the name, reputation, and skills of the dentist and team, all the factors which have led to a strong, loyal patient base and a consistent inflow of new patients. For the buyer, goodwill greatly increases the likelihood of continued cash flow from retention of that patient base and from new patients.
During the process of selling your dental practice, preservation of your business’ goodwill is paramount to a successful dental practice transition.
A young dentist who purchased an established practice in Southwest Florida recently emphasized that point. “The goodwill of the seller in my transition was priceless,” he said. “His vote of confidence to our patients has increased retention and allowed me to succeed on a level I never would have been able to do otherwise.” Learn more strategies for selling your dental practice in our earlier post, “How to Prepare for Successful Dental Practice Transitions”.
Keep on Building Your Dental Practice’s Goodwill
To assure that you retain goodwill both prior to selling your dental practice, and throughout the critical transition period, during and after the sale, you should maintain your reputation within your practice and the community at all times.
Through the transition process and even afterward, you can continue to promote the goodwill of your practice by staying involved in study clubs, the local dental association, community organizations, and volunteer groups such as Rotary Club. This will not only help ensure that you receive proper compensation for your years of practice building, but also that your buyer receives full value.
Even after you retire, positive support and praise for the new dentist in social settings will go a long way toward continued goodwill and retention of patients in the new practice.
Choose a Reputable Dental Practice Transitions Broker
Working with an experienced and ethical transition broker during the process of selling your dental practice is key in preserving the goodwill and value of your practice. The right broker will perform a legitimate dental practice appraisal and determine the value of your practice in a manner that reflects the true anticipated cash flow following the sale, rather than telling you what you may want to hear. Selling your dental practice at an inflated price could subsequently lure a buyer into a bad deal that destroys all the hard-earned goodwill of your practice.
The right transition broker will also work to find a buyer who is an appropriate fit for the practice, one whose abilities, ethics, and practice style match your own, preserving your reputation and the reputation of the practice.
They will guide the entire process, working with lenders, accountants, and counsel who are knowledgeable in dental transitions. The right broker will also work toward the goal of having a satisfied seller and buyer, preventing negative interactions that can sometimes occur when working with an inexperienced or self-serving advisor.
Establishing the goodwill of your practice took years of strong leadership, hard work, and a relentless desire to create a dedicated dental health team, high standards, and exceptional services. Now it’s time to ensure that the goodwill of your dental practice shines brightly to your buyer.
Henry Schein Professional Practice Transitions, Inc. is a national leader in dental practice transitions. A subsidiary of Henry Schein, Inc. they provide expert guidance for selling and buying dental practices, assessing partnership and associateship opportunities, performing dental practice appraisals and valuations, and advising on dental practice management and fees.
