01 Oct Reasons to Use an Advisor to Sell Your Dental Practice
By Tabitha Jaquay Fernandez at Jaquay Enterprise
Looking to sell or buy a dental practice?
Consider hiring a broker that specializes in your industry. Brokers have a repository of potential buyers and sellers. They can advise you on how to value and market your business. There are far more drawbacks associated with selling or buying a dental practice yourself versus utilizing the expertise of a dental transition consultant.
Risks of selling a dental practice on your own:
- You may waste countless hours with flaky purchasers who are either simply “tire kickers” or think they can wait you out for a lower price.
- When you finally locate the perfect purchaser only to later watch him or her become offended by your attorney or accountant and walk away from the deal.
- Or the purchaser you finally come to terms with will be unable to secure the financing for the purchase.
- You will eventually get weary of the entire process and negotiate away large sums of money just to get the sale finalized.
- You might not receive the full fair market value of your practice and sell it for much less than it is really worth. In my professional experience, this actually happens frequently.
Case in point, we recently learned that a doctor selling the practice on his own undervalued the practice and his building by $330,000. If he had engaged a dental transition advisor like Jaquay Enterprise:
- We could have appraised the practice and building, provided all the necessary information to potential buyers, helped find the buyer, handled all contracts for the practice sale and the real estate sale, and assisted the buyer with getting the best rates on financing–all in a timely manner.
- Considering most national transition companies charge 10% and real estate transactions incur fees, had Jaquay Enterprise been engaged, we would have represented both the seller and the buyer. The practice transition fee is split between the two parties, and because we are local, we keep our fees lower. This would have put an additional $300,000 in his pocket even after splitting the transition fee.
Risks of buying a dental practice on your own:
Buyers trying to purchase a dental practice on their own without seeking professional broker assistance can also run into difficulties. The amount of time it takes to locate practices for sale can be quite cumbersome. The time involved to call and obtain information and try to determine if the practice is even in an area you are interested in (due to the confidentiality) presents another issue. You may not know what questions you should be asking. Or if the numbers look off, you may not know what reports you should request.
Advantages of using an advisor:
- Advisors have banking relationships to assist the buyer in setting up financing so you are not stuck seller financing the transaction.
- Advising both the seller and buyer creates a win-win for both sides. Unlike attorneys, accountants and practice brokers who represent only one side of the transaction; a dental transition consultant is someone who has proven his or her value and ability to be fully trusted by both sides to be competent, fair and objective. With Jaquay Enterprise, you and the purchaser can proceed forward in confidence toward your mutual objectives, knowing that everything will work out successfully.
- Advisors know buyers who are looking for practices already.
- They know how to find you the “right” buyer. Personality and the buyer’s treatment philosophy make a world of difference as to whether they are the right fit for your patient family. An advisor pro can determine whether this doctor has the ability to grow the practice or at a minimum sustain the current numbers.
A Successful Transition
Your advisor should be competent and confident in financial and legal matters. They should be capable of coaching and interacts with the lawyers and accountants who will likely be involved. An advisor who works in this capacity to the fullest extent will save you thousands in legal and accounting fees and ultimately will help ensure that the transaction happens successfully.
If you are at an important crossroads in your career and looking to sell or buy a dental practice, let Jaquay Enterprise help you make a smooth transition.
Tabitha Jaquay Fernandez
Practice Transition Advisors
Phone 833.ADVISRS (238.4777)