When working with dentists on the sale of their practices, I’ve observed two distinct types of sellers: those who elevate their selling process and those who inadvertently hinder it. Engaging a credible dental practice broker is often the most effective strategy for sellers. These brokers ensure confidentiality from interested parties and represent your practice honestly yet favorably. They possess expertise in securing financing, structuring sales for optimal tax advantages, marketing to reach the widest audience, and mitigating the risk of post-sale legal issues.
One of the most common mistakes made by sellers is mispricing their practice. Lacking the necessary objectivity and training, many sellers struggle to evaluate their own practices accurately. They often believe their practice is unique and worth significantly more than comparable ones. Although there are exceptions, practice values typically fall within established statistical ranges. Only an experienced dental practice broker, familiar with market trends, can provide an accurate dental practice valuation, especially if the practice deviates from these norms. Along these same lines, not knowing the difference between an Opinion of Value and not a Valuation can also be a costly mistake.
Focusing exclusively on one potential buyer is another error sellers make. Not being open to other prospects, who may actually be better qualified and easier to work with, can result in much wasted time, effort, and emotional energy. When they discover that their preferred candidate is not a suitable buyer, the seller is reluctant to go through the marketing process again, even though they still have the goal to sell their practice.
Usually, sellers worry that their employees will find out about their plans to sell and try to hide it from them. My experience has shown that involving dependable, long-term employees in the process will result in their support of the owner. It is much better for the staff to hear about the sale from the seller and not by mistake from inevitable loose lips. If members of the staff leave, it is preferable to have a substitute in place than to have the buyer lose a crucial employee on day one.
Patience is also crucial for sellers, as practice sales can often take years in some regions. In an attempt to expedite the process, some sellers suggest lowering their asking price. They mistakenly believe that it’s the price that deters potential buyers. Based on my experience, the price typically does not prevent inquiries; interested parties will simply present lower offers if they deem the price too high. Prematurely reducing the price during a lull in activity is like bidding against oneself at an auction.
Another costly mistake is discussing pricing and terms too early in negotiations with prospective buyers. Brokers advise against this as this often leads to unintended concessions. A single casual conversation can significantly decrease a seller’s potential earnings. In one instance, a seller offered to finance both the practice and building for a buyer when we had already secured long-term bank financing, ultimately placing both parties at a disadvantage.
The process can unravel when sellers, who usually have little to no experience in selling a dental practice, attempt to exert control over the sale. My strongest recommendation is to trust your broker’s expertise and heed their guidance. Brokers have extensive experience and know the best strategies to achieve a successful sale.
To ensure a smooth, successful sale of your dental practice, avoid these common mistakes and trust the expertise of a qualified broker. At ADS Dental Practice Transitions, we specialize in guiding dental practice owners through every step of the selling process, from valuation to closing. Contact us today to connect with an experienced broker who can help you maximize the value of your practice and achieve your goals.
Christine Elliott is a Licensed Real Estate Broker specializing in dental practice transitions. Christine worked for over twenty years in the financial industry after graduating from Florida State University. She has held positions ranging from Investor Support Services Manager to Vice President in the Capital Markets division of JP Morgan Chase. With her transition experience and access to over 38 years of experience, Ms. Elliott is experienced in all aspects of transition management and possesses strong communication, problem solving and decision-making skills.
LinkedIn |  Facebook |  Instagram
