It is not uncommon for me, or any broker, to receive phone calls from doctors asking me to help sell their practices. The "kicker" is that they want to sell it in a month or two. When I talk with many of these doctors, I find out that they have been thinking about selling their practice for quite some time. This is like the patient who calls the dental office and wants to get in right away because he has an emergency. When the staff member asks when the patient was first aware of the problem, the patient often replies that they have had the problem for many days. The staff member privately thinks, "If this is a real emergency, why didn`t you call sooner?"
When you think you might want to sell your dental practice, call your dental broker and find out what time frame it might take to sell the practice. Find out how fast or slow other practices have sold in your area. Find out why some practices might have taken a long time to sell and why some practices sold in a short period of time. In some areas, where there is great demand for practices to purchase, the broker may have buyers just waiting for a practice to come on the market. In like manner, you may find that the last three doctors who tried to sell their practices found it took more than a year to find a buyer or never found one at all.
If you find you are in an area where it has taken a long time to sell a practice, get your practice on the market as soon as it`s prudent to do so. An example might be a doctor in a rural area who is thinking about retiring in the next two to three years. If the doctor finds out that it is hard to find buyers for dental practices in his area, he might want to consider the following.
> Put the practice up for sale as soon as possible with the idea that if a buyer is found you would be ready to sell.
> During the wait for finding a buyer, do what is necessary to make the practice as salable as possible.
> Maximize the profit of the practice, and set that profit aside. The additional money will replace the money you did not receive from a sale, if you have to sell the practice for less.
Since only a few buyers may be interested in your practice, you will have a better chance of getting your asking price if time is on your side. If the buyer feels you are "under the gun" to sell, he may make a low offer.
The buyer`s sentiment may be that, if he doesn`t buy it, you may be unable to sell the practice to anyone else. One doctor told a prospective buyer that if he didn`t buy the practice the selling doctor was going to walk away from it. What kind of message do you think that sent to the buyer? The message was: Make a low offer. If the seller doesn`t accept it, let him leave town and then you can start your own practice. That is exactly what was done.
Once a buyer is found, it may take at least two months to complete the agreements, get financing, etc. Not putting yourself in the position where you have to sell your practice in a short period of time can help assure that you will receive a fair price for your 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 more information contact Mr. Smeed at (913) 642 1988 or the ADS member in your area. See the ADS classified ads in the back of this issue for the name and address of the ADS member in your area.