Tom Smeed
Some dental markets have an abundance of buyers for dental practices and others have a shortage of buyers. In those markets where there is an extreme shortage, finding a buyer can become a major problem. In some cases, sellers have not even been able to give their practices away. You can imagine the disappointment of some doctors or their estate when they find that it is close to impossible to find a buyer for their practice.
To determine what the market is like for selling a dental practice, ask around to find out what practices have sold for in your area and how easy or difficult it was to sell them. Dental-supply sales people, local dental societies and dental-practice brokers can be a good source for this information.
If you find out that it is difficult to locate buyers, ask these people why. It could be that the practice was priced too high, the office did not show well or the seller was uncooperative. It could be that the location did not have much appeal for many dentists and their families. This could be the case in some rural areas, as well as in some areas of a city that are turning into less desirable areas to live and work. Another problem could be that the location has an abundance of dentists at the present time. It could be that the selling doctor`s fees were low or too high or that the patients have a low dental IQ and don`t seem to want to save their teeth. It could be that weather conditions are not to their liking, or that there is not access to major sports teams, cultural events or other activities that buyers might be interested in for themselves or their families. As you can see, when all of these factors (and many more) are taken into consideration, the number of buyers who might be interested in your practice could be very limited.
Once you determine what the reasons were for other dentists having a difficult time selling their practice, you can look at your practice to see what you might possibly do to make it more appealing to potential buyers. Maybe you need to spruce up your office by doing some painting and cleaning both inside and out. Maybe you need to do a better job of running your recall program, do a better job on collections, charting information on your patients, having good income and expense records, developing your and your staff`s people-skills, etc.
To help you determine what to do, you might consider hiring a practice broker or consultant to work with you well in advance of the time you may wish to sell your practice. Not only can they help you make your practice more desirable to a buyer, but they will list and broker your practice by using their reputation and knowledge of your area. Some brokers have a number of sources to help with the marketing of your practice. Some brokers have access to the Internet, contacts with dental-practice brokers all over the United States, some advertise regularly in publications like Dental Economics` classified section, some are putting on seminars in their market area, contacting students in the local dental schools and doing other things to help them identify as many buyers as they can.
Here`s an example of what you might do if your practice is located in a remote rural area. If you find that your practice is going to be difficult to sell because it is in a rural area that is not attractive to many buyers, you need to find ways to make it more attractive. This can be done by gathering as much information about your community and the surrounding area as you can. This might help in showing a prospective buyer that the community is a nice place to live and to bring up a family. Show prospects that you have very little or no managed care in your area and that your cost of running your practice is low and the profit is great. As one doctor told me, "While we have to go to a larger town to do some of the things that my family occasionally likes to do, we are making enough money that we can afford to go places when we wish to."
There usually is someone out there who will buy your dental practice. Getting the information out to as many prospects as possible is one of the major keys to success. Another major key is to make your practice look as appealing as possible in appearance, clinically and financially. Also important is to make sure you have time on your side. If you have to sell in a hurry or a set period of time, you may have to sell your practice for less to get a buyer. If time is not a factor, you can wait until you find a buyer who will pay a fair price for the practice.
Tom Smeed is founder and president of Healthcare Practice Management, Inc., a dental broker, appraiser and dental practice-management firm. He is one of the founding members of American Dental Sales, the largest group of dental brokers, appraisers and consultants in the United States. For details, contact the ADS member in your area (See the ADS Classified ads).
