While the average sales price of a dental practice from a national perspective is approximately 65% of the most recent year’s revenue, there are a number of other factors that can influence value in either direction, including revenue trends, profitability, type of patient base, type of dentistry, location (urban vs. rural, high visibility vs. low visibility), quality and age of equipment, curb appeal, etc. To avoid these mistakes, we encourage you to contact us at least three years in advance of your practice transition. When you consider all of the responsibilities associated with owning/operating a dental practice along with the expertise and time necessary to fulfill the practice broker’s responsibilities, it is easy to understand why doctors who attempt to sell a dental practice on their own are often overwhelmed by stress and anxiety. Here are some of the key considerations you should take into account when planning your practice transition: For many doctors, their dental practice is one of their most valuable assets and the proceeds from the sale of their office will be utilized to fund a significant portion of their retirement. Assist the buyer with securing practice financing. At McLerran & Associates, we work diligently to cultivate relationships with prospective buyers to understand their needs, goals, and skill-set then match them with the appropriate practice. We have found that our clients typically receive a higher value for their practices, have a more amicable relationship with their buyers following the sale, and experience much less stress and anxiety during the transition process than their counterparts who try the “do it yourself” approach. McLerran & Associates has the experience and expertise to help you navigate the transition process from start to finish, including developing a customized transition strategy for your individual situation, finding a buyer who is the right fit for your practice, and maximizing the value you receive for your practice. One of the most overlooked part of the Dental Practice Sales process is the sales negotiation. To sell a dental practice, many brokers will simply list a description of your practice in various journals and on their website with the hope of coming across a buyer who is a good fit. Unlike a start-up practice, an established practice has … Since most buyers will require 100% financing, it is important for your buyer to work with lenders who are familiar with dental transactions. In an asset sale, the buyer purchases some or all of the assets of the dental practice. Therefore, it is imperative to be educated about the process and employ the services of experienced professionals (McLerran & Associates, attorney, accountant, etc.) Average annual earnings Typically, historical financial information of the practice is utilized to produce the calculated value under these scenarios. Considering these facts, many dentists will make the wise choice to entrust the responsibility of selling their practice to a professional who has the knowledge and experience to facilitate a successful transition … a dental practice broker. As a medical professional, you also likely will have legal obligations related to communicating how your patients' medical records will be maintained in the future. How strong is my emotional connection to my practice? D&M Practice Sales and Leasing is an independently owned and operated Dental Practice Sales Brokerage that has served Southern and Central California since 1994. Once an ideal buyer has been located, the next step in the process is to agree on the terms of the purchase in a Letter of Intent (we provide our clients with a draft LOI), which should detail the proposed purchase price, intended closing date, assets included in the sale, and a list of contingencies that have to be met before the transition is completed. I can not say enough about how excellent my experience was with the sale of my practice. An existing practice offers instant cash flow. Dustin Hill is the former owner and publisher of a Midwest business journal and has been reporting on small business since 1992. When writing a news release announcing the sale of the business, keep it brief but be sure to include information on how a reporter can contact you for more details. Over the past few years, market conditions have been favorable for sellers, as there has been strong demand for dental practice acquisition opportunities coupled with a limited supply of sellers and lenders have been providing buyers with 100% financing at historically low-interest rates. Therefore, we encourage you to contact McLerran & Associates when it is time to start planning the sale of your practice. In addition to handling all of the responsibilities discussed above in a professional and efficient manner, here are a few additional reasons that McLerran & Associates is the premier dental practice brokerage firm in Texas: Our team has specialized in providing practice appraisal and transition services to Texas dentists since 1987. A full service transition firm staffed by industry experts. If you deal with a relatively small number of suppliers, you may want to contact them personally and then follow up with a more formal letter to document the end of the business relationship. While market conditions remain favorable at the moment, we are expecting several changes to occur over the next few years that could have a significant impact on practice value. With a diverse skill set and knowledge in finance, accounting, marketing, and professional sales, our team has the experience to craft a transition strategy to meet the goals of each client and expertise to properly value your practice, effectively market the practice to find a buyer who is the right fit, maximize the value our client receives for their practice, and work closely with all parties involved in the sale to facilitate a smooth transition of ownership. We have been involved in over 1,000 successful practice transitions and understand the significant impact a practice sale has on both the professional and personal lives of our clients. Write a short, straightforward press release that can be sent to newspapers, radio stations, television stations or online sites that cover business news in your area. However, that is just the starting point. The reason for this is simple: to protect the goodwill of the practice. When a buyer makes initial contact with our office, our focus is to get to know them (background, career goals, practice philosophy, personal financial condition, etc.) The current doctor has a great reputation and is looking to retire. Make sure your staff is prepared to answer questions when patients come into the office. It was a pleasure to have such a … Identify and accomplish the seller’s goals for the transition – Every doctor and practice is unique so it is imperative for us to spend the time to understand the seller’s individual situation and goals and formulate a transition strategy to meet their needs. One of the least thought about but most often negotiated issues in selling a dental practice is the allocation of the purchase price and the associated tax consequences. This document should be specific to a dental transition and be a win-win agreement that protects both sides and discusses how common issues, such as accounts receivables and credit balances, will be handled after the sale occurs. We are heavily involved in the local dental community and spend a great deal of time educating and cultivating relationships with potential buyers. Check with your state licensing agency to determine what forms of notice the law requires. ABOUT D&M. H… When buying or selling a dental practice, a key question to accurately answer is: How much is my dental practice worth? The next step is to find the right dentist for your practice. DENTAL PRACTICES FOR SALE Find your perfect practice from our listing of dental practices for sale. Provide draft contracts including the Letter of Intent and Asset Purchase Agreement. Solely represent the seller’s interest throughout the process – While our goal is to put together a win-win transaction for all parties involved, our responsibility is to solely represent the seller’s best interest during the transition process. In that situation, the doctor’s options are relatively limited in regards to the type of transition strategy they can utilize to sell their office. We also volunteer our time and make considerable monetary contributions to charitable dental organizations such as the Capital Area Dental Foundation. Involve the new owner in all of the details of announcing the sale. This dental practice is successful and established in a charming city in Maryland. While it is important to understand the role of a practice broker and the importance of utilizing their services, it is also imperative that you hire the RIGHT broker to represent you in the sale and facilitate a smooth transition. Contact us by email at: info@dentaltransitions.com, TREC Information About Brokerage Services. to help you navigate the process, protect/maximize the value of your practice, and ensure your transition is as smooth and successful as possible for all parties involved. Doctors who are preparing to sell a dental practice often ask us what our role in the process will entail. Home. Timing of this introduction, how the initial meeting is handled, and training the staff to explain the transition to patients is a critical step in ensuring a smooth transition of ownership and maximum patient retention following the sale. Assist the buyer with building an experienced team of dental advisors so that he/she is positioned for long term success following the transition. Determine a fair market value for the practice, maximize the value the seller receives at closing, and be able to support and articulate the value to interested buyers and their advisors. Ensuring that you both agree with the message is important. The opportunity to sell a practice reflects the culmination of years of hard work and one of the most satisfying moments of a … He has a Bachelor of Science in journalism from the University of Kansas and currently works as a government and business reporter for a daily newspaper. Welcome to First Choice Practice Sales Inc. The first step in the transition process is to obtain a practice valuation from a local, reputable practice broker so you and your financial advisors can determine if you are financially prepared to sell your office. Should a buyer determine that your practice is a good fit after reviewing the profile and visiting the office, a follow-up meeting will likely be arranged to allow both doctors to get to know each other. Another advantage of beginning the process three to five years before a sale is the ability to address and correct issues that could have a negative impact on practice value, thus ensuring that you maximize the value of your practice upon the sale and position the future practice owner for success. Visit Frank Taylor Associates’ website and view our extensive list of dental practices for sale. If you plan to continue working in your office following the sale, are you willing to adopt an “associate mentality” and be accepting of change? Generating Approximately $2.5M in Average Annual Revenue. You don’t want to leave money on the table or get shortchanged in the process. Construct a detailed marketing profile and cash flow analysis for the seller’s practice – The marketing profile includes all of the pertinent information a potential buyer and their advisors will need in order to evaluate your practice. With so much at stake, you really need … PITFALLS TO AVOID WHEN SELLING A DENTAL PRACTICE By Ron Lebow, Esq. This typically involves meeting the selling doctor, reviewing patient charts and practice reports, inspecting equipment, and consulting with an accountant to evaluate practice financials. Also explore buying an ad with local media to announce the sale and thank the community for its support. Selling a dental practice is an emotional process for any doctor because of the relationships developed with their patients and staff over the years. Every contact between buyer, seller and broker, from initial discussion to closing, is an opportunity to lay the … Young … McLerran & Associates employs numerous effective marketing strategies to ensure that we identify a buyer who is the right fit for your office in a timely manner and maximize the value you receive for your practice at closing. Beware of other practice brokers who offer “dual representation”, as it is impossible to represent the best interests of both the buyer and seller simultaneously. Provide an organized process so the practice sale and transition go smoothly, including managing all correspondence between both parties and all of their advisors (attorneys, accountants, consultants, lenders, etc.). My PARAGON consultant was exceptionally helpful throughout the entire process. You bought that couch in the waiting room for $1,000, depreciated it over the last five years on your tax returns, and then valued it at $200 on your list of assets when you sold the practice. Since the buyer’s and seller’s financial interests are typically converse to one another, it is nearly impossible for the broker to fairly represent both parties under the dual representation arrangement. The first step in this process is to collect all of the information we will need to complete a practice valuation/appraisal: practice reports, financials, office lease, equipment list, pictures, etc. This approach doesn’t cut it! By asking yourself the above questions and dealing with these feelings prior to putting your practice on the market, you will be in the position to minimize your anxiety as you navigate the transition process. Dental Practice Purchase Agreement This is a simple asset purchase agreement elegantly constructed by (Brian Rogers), then modified for the sale of a Dental Practice. Am I ready to give up control of my practice? In an asset sale of a medical practice, let’s say you, the seller, have made a list of all the furniture and fixtures that are part of the sale. If you deal with a large number of suppliers, a letter alone is appropriate. In doing so, you will gain valuable insight regarding the current value of your practice and the key factors that impact practice value and marketability. Beware of working with a broker who advocates dual representation, in which they represent both the buyer and seller. Our professional dental brokers facilitate and assist in the purchase and sale of dental practices, as well as provide assistance in obtaining practice acquisition financing, locating and negotiating dental … Dental Office – General Dentistry. Therefore, it’s imperative to meet with our team at McLerran & Associates well in advance of a sale to determine the best transition strategy to accomplish your individual goals. Because we place a high priority on developing meaningful relationships with potential buyers, we maintain a strong pipeline of qualified buyers and can immediately reach out numerous doctors who may be the right fit for your office immediately upon listing your practice. 2019 Revenue was … This information will also provide you with sufficient time to develop a customized transition strategy to meet your individual needs, make changes to your office that will enhance value, and avoid mistakes that may negatively impact value. Handle all inquiries from potential buyers and their advisors regarding the practice, including conversations, email correspondence, and showing the office after business hours. FACT: A dentist will typically sell a dental practice only once during his or her professional career. While some practice owners may be able to identify a buyer who is interested in purchasing their practice with little difficulty, getting from that point to the closing table is the most challenging component of a practice sale. As the closing date approaches, our team at McLerran & Associates will work closely with the buyer and seller to ensure that all the details of the transition are completed prior to closing, including transferring/establishing service provider accounts (utilities, phone, etc. If handled properly, it should be a rewarding and profitable transaction for all parties involved. Gather your employees and tell them of the sale. ), PPO credentialing, drafting a transition letter that will be mailed to active patients upon closing, and ensuring the lender receives all necessary documentation to fund the buyer’s loan on the closing date. We also oversee all communication with potential buyers and their advisors and handle initial practice showings after office hours. Selling a dental practice is not like selling a home … it is a complicated process which extends far beyond simply finding a buyer and closing on the sale. Serve as a buffer between the buyer and seller throughout the process (particularly during price and contract negotiations) to preserve the goodwill of the practice and relationship between the parties. At McLerran & Associates, we feel that it’s imperative to play an active role in the local dental community in order to keep a pulse on current market conditions and cultivate relationships with potential buyers and sellers. Capitalized excess earnings 2. Common valuation methodologies: 1. Henry Schein Professional Practice Transitions provides the comprehensive support you need to locate a dental practice for sale that fits your needs, budget and career goals. That includes tangible assets like equipment, inventory, and possibly accounts receivable. Annual net receipts 4. The sale of a dental practice is one of the most significant events in your professional career. FACT: A dental practice is typically the doctor’s most valuable and prized possession. Therefore, to ensure your practice transition is successful, it is imperative to follow these crucial steps: While this list covers the most significant steps required to sell a dental practice, it is by no means comprehensive. Typically, the group of assets that would be sold between the selling party and buying party would include dental supplies, furniture, fixtures, and equipment used in the practice, patient files, and goodwill of the … You will want to make sure employees, key customers and suppliers learn of the sale before the general public. Asset value 3. Send a letter to your patients. … Patient confidential information constitutes Protected Health … NW Washington, DC – Premiere, General Dentistry Practice For Sale In NW Washington DC. Therefore, it’s important to ask yourself these questions before making the decision to sell: It is also worth mentioning that the emotional implications associated with the sale of your practice will increase once you accept an offer and begin navigating the closing process. As previously mentioned, selling a dental practice is a complicated process which extends far beyond simply finding a buyer and closing on the sale. California Practice Sales, Inc., provides nine-page written appraisals of dental … Asset purchases can also … Here are our primary responsibilities as your practice broker: As you can see, our team plays a vital role in the transition process. We have found that the emotional process of selling a practice often plays a more significant role than the financial implications. When announcing the sale of a business, timing is important. These emotions can be even more intense for those doctors who do not have other interests or hobbies outside of practicing dentistry. As practice brokers, we are often contacted by practice owners on the day they are ready to sell. Confidentially market the practice to qualified buyers and advertise the practice on a local, state, and national level via the web, print ads, seminars, trade shows, etc. At McLerran & Associates, we play an active role in referring the buyer to several experienced dental lenders and helping position their loan request in a favorable light with each lender to enhance the probability of securing financing approval. and determine what type of opportunity they are looking for. You also will want to coordinate the announcement with the new owner to ensure that you both present an appropriate message. Making the decision to sell your dental practice requires a great deal of thought regarding when and how you would like the transition of ownership to occur. It is also important to remember that selling your office is not synonymous with retiring, as there may be opportunities for you to continue generating personal income following the sale by working as an associate in your office or outside of the non-compete radius. The most valuable type of dental practice continues to be orthodontics at 79.81% of collections. Suppliers likely will have a different set of questions than patients, such as whether billing addresses have changed, which party is responsible for balances due, and whether there are any other management changes taking place at the practice. Selling a dental practice might be the single biggest decision of your professional career. At McLerran & Associates, we provide the parties with a draft Asset Purchase Agreement and encourage each doctor to obtain their own legal counsel (with experience in dental transitions) to review the APA and other agreements involved with the sale. This involves understanding each lender’s unique underwriting requirements, presenting a comprehensive practice prospectus and cash flow analysis, and proactively addressing any potential red flags up front. There are countless ways to sell a dental practice. Copyright 2021 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. We confidentially market our listings via our website (which ranks very highly on Google and provides your practice with strong national exposure), online dental communities such as Dentaltown, local and state dental journals, and local dental conventions and dental society/study club meetings. This practice was opened in 2009 but the doctor is … We also offer dental practice … NEW LISTING! It is important that a dental practice valuation is performed by an experienced professional to ensure it is thorough and accurate. In the sale of a dental practice, confidential information concerning patients, however, requires further protective steps. Once you have determined that you are financially prepared to sell your practice, it’s time to move onto considering the emotional implications of the sale. You will find a host of dental practices for sale throughout Georgia, which includes listings in Atlanta, Columbus, Savannah, Sandy Springs, Macon, Roswell, Albany, and every other Georgia city with active … At McLerran & Associates, we work diligently to structure a win-win transaction for all parties involved in the transition but our fiduciary responsibility is solely to the seller. • Practice consistently collection over $1.8M • Established practice with 6 equipped operatories • Doctor would like to work for the buyer post-sale • Paperless office, with Open Dental and digital imaging • Building available for sale Include the information required by law, but also try to anticipate questions they will have, such as information about the new owner, how ongoing care and records will be handled, and the policy for dealing with outstanding payments that are due to the dental office. We accomplish this initiative by regularly attending and sponsoring local dental society and dental study group meetings, hosting seminars to educate buyers and sellers on the transition process, and networking with professionals who serve as valuable resources for our clients (attorneys, accountants, consultants, equipment reps, etc.).
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