In working with dentists in the sales of their practices, I’ve encountered sellers who have enhanced their sale process and those who have undermined their sale process. A seller’s most successful approach in their practice sale is to enlist a reputable practice broker. Brokers will protect your confidentiality from curiosity seekers and present your practice in its best, but honest, light. Brokers know where to obtain financing, how to structure sales for maximum tax savings, how and where to market for maximum exposure, and how to minimize the risks of post-sale lawsuits.
A common seller mistake is in the pricing of the practice. Sellers lack the objectivity and training to make an accurate assessment of their own practice. They may feel that in the universe of practices that theirs is unique and more valuable than all the others. While there are some notable exceptions, practice values are clustered fairly closely around statistical norms, and only a broker who understands the market for practices can accurately estimate when a practice significantly deviates from those norms.
Another seller mistake is deciding there is only one prospect they want to sell to. 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. Discovering that the "chosen one" is not the person they imagined and having the sale collapse often results in so much frustration that the seller is reluctant to go through the marketing process again, even though they still have the goal to sell their practice.
Sellers are typically concerned about their staff discovering their sale plans. In my experience, bringing longterm loyal and trusted staff into the process will result in their supporting and protecting the owner. If a staff member does leave, it’s better to have a replacement in place rather than have the buyer lose a key employee on the first day. The staff will find out about the sale, and it’s crucial that they hear about it from the owner first.
Sellers can become impatient when their practice doesn’t immediately sell. In the region where I work, practice sales may take several years. In an effort to hasten a sale, sellers tell me to reduce their practice price, thinking that the price is deterring prospects from inquiring. My experience is that the advertised price does not deter prospects from inquiring about a practice. Anyone interested who thinks the price is too high will simply make a lower price offer. Lowering the price when there is an absence of activity is like bidding against oneself at an auction.
Brokers advise sellers against talking price and terms with prospects. Invariably, when sellers do this they tend to make major concessions. One little conversation can cost a seller tens of thousands of dollars. In one sale we structured, the seller offered to finance his practice and building for a buyer, when we had obtained long-term bank financing for the buyer. The seller’s offer, while well intentioned, would have put both parties at a disadvantage.
The wheels come off of the wagon when sellers, who for the most part have never sold a practice, try to control the sale process. My best advice is to trust your broker and follow his or her advice. It’s not the broker’s first rodeo, and brokers know better than anyone the pathway to the most successful sale.