You have started to think about transitioning your practice or are ready to bring in an Associate. Perhaps, it’s because your practice is too big for one dentist? Maybe you want to be prepared to transition the practice to a partner in the future? It might be that you need to sell for a personal reason, so you need to get your plan started immediately! Whatever the reason or timing, you are overwhelmed by the thought of transitioning your practice. You don’t know where to start or how to make your transition successfully. Wisely, you’ve turned to Henry Schein Professional Practice Transitions who has effectively completed thousands and thousands of successful transitions for practice owners like you. Our consultants’ expertise, knowledge, and firsthand experience can help make it easier for you, thus giving you peace of mind. What follows is a partial list of the steps involved and some helpful hints to get you started:
- Identify Your Goal. You must first identify what you are trying to achieve and what is most important to you. Is your ultimate goal to maximize your financial return, so your time to execute a plan is a little more flexible? Or do you need to transition by a particular date, thus placing time as the single most critical factor? How important is it to you that you find a buyer who will retain your staff? Sometimes you need to compromise, so it’s important to know what you will and won’t negotiate at the outset.
- Conduct a Practice Valuation. Know what your practice is worth today and how to maintain its value until you are ready to sell. Then you can determine a listing price (get input from your broker if using one).
- Consider a Broker or Professional Assistance. Discuss the appraised value, determine the asking price, and list the practice for sale (The listing agreement gives the broker the “right” to sell your practice.). Often what you pay in commission, you more than make up by getting a more qualified buyer sooner or a bid closer to your asking price.
- Implement Marketing. This includes advertisements, website listings, online marketing, and association websites (done, of course, in a confidential manner).
- Respond to Inquiries. Be sure to qualify candidates (e.g., will they qualify for financing, references on potential associates, skill).
- Financing. The Buyer must prepare the financing request (loan package), unless it’s an all cash deal, discuss the transaction with finance vendors, and secure the financing commitment. If you have a broker, often he/she can help, which is an advantage of hiring a broker.
- Final Negotiations and Preparation of “Practice Sale Agreement” (And possible Employment Agreement if you remain on). Completed by the buyer, seller, and their representatives (e.g., attorneys and accountants).
- Operational Preparation for Closing. There are many small but important tasks that need to be completed prior to closing. Some of these tasks include announcements to patients and staff, ensuring new owner opens a business checking account, making payroll arrangements, etc.
- Finance Closing. Ensure final loan documentation is completed (i.e., proof of satisfaction of unpaid prior liens).
- Close transaction. The average practice sale involves 100-200 hours. A transition involving an associateship leading to a partnership may typically involve more than 200 hours.
While these steps can be accomplished with just the assistance of your attorney and accountant, it is clearly best if your representatives include a specialist in dental transitions. Henry Schein Professional Practice Transitions’ role is to facilitate these arrangements based upon the knowledge gained from our years of experience involving thousands of transitions. Many of our consultants are dentists themselves who have been successful practice owners or have been involved in the dental transition industry for years.
- Experience matching the right buyer to the right practice
- Aggressive marketing plans that leverage both online and traditional channels. We have qualified buyers looking for practices NOW!
- Agreement and document templates that can help save you time and money and provide guidance to your attorney and accountant
- Financing sources and other tools to help get deals closed
- Full, accurate practice appraisals that help you determine what your practice is worth and how to price your practice for sale
- Experience making the transition experience smooth and seamless for you, the buyer, your staff, and your patient
- Peace of mind. You can relax, because we make it easy!
Whether you do it yourself or with a broker, know your goal up front, take it step by step, and you can be relaxing sooner than you think.
Tom Snyder, DMD, MBA