Sell Your Dental Practice With A Dental Practice Brokerage or Dental Office Brokers.
You Want to Sell – Now What?
Valuation of Your Practice
Document Collection
Once you’ve formulated a transition strategy for your dental practice, your next critical step involves assembling the necessary documentation to facilitate a practice valuation and determine its market worth.
Ensure you gather the following essential documents in their original copies:
- Tax returns for the last three calendar years
- Year-to-date profit and loss statement and balance sheet
- Lease agreement
- Employee compensation and benefits information
- All pertinent licenses and insurance policies
- Loan agreements and associated documents
- Comprehensive equipment inventory
Conducting Practice Valuation
In addition to compiling the requisite documents, it’s imperative to undertake a comprehensive practice valuation to ascertain its true value.
Three primary valuation methods to consider include:
- Income-based valuation
- Market-based valuation
- Net asset valuation
For detailed insights into these valuation methodologies, refer to our informative blog post on How to Increase the Value of Your Dental Practice.
After completing the valuation process, your subsequent step involves contemplating the engagement of a broker or professional to facilitate the sale.
Broker or Professional Assistance
Upon obtaining a valuation for your dental practice, it’s advisable to seek the expertise of a qualified broker or professional to guide you through the sales process.
Key discussions to have with your advisor include:
- Reviewing the appraised value
- Establishing a fair asking price
- Listing the practice for sale
While it’s acknowledged that engaging a broker may incur commission expenses, the benefits typically outweigh the costs. A skilled broker can attract a broader pool of qualified buyers and potentially secure bids closer to your desired asking price.
Your final phase entails initiating marketing efforts to promote the sale of your practice effectively.
At Triumphant Transition Partners, we are committed to making the transitional process as smooth as possible for all our clients. If you’re looking for an experienced partner to sell your dental practice, look no further than TTP.
Marketing, FInding Your Buyer & Final Negotiations and Asset Purchase Agreement
Market the Sale in a Confidential Manner
Upon conducting a practice valuation and considering hiring a broker or another professional to assist you, your next step in the sale process is to start marketing the sale in a confidential manner.
Ways you can market your sale:
- Advertisements
- Online listings
- Association websites
Identify the Buyer
Once you start marketing your practice and responding to inquiries, you may want to schedule a meeting with your potential buyer to see if it would be a good fit, both from a financial and practice management perspective. As you would want your patients and staff to be in good hands once you step away from the practice.
Now that you have identified your buyer, your next step is to draft and submit a letter of intent (LOI).
Letter of Intent
Why is it Important?
The Letter of Intent (LOI) is important because it details the buyer’s interest and sets out some of the basic business terms.
While these terms are non-binding, the document ensures that you and the buyer are on the same page, and once you agree to the LOI, your next of business is to negotiate and agree to the Asset Purchase Agreement (APA).
Final Negotiations and Asset Purchase Agreement
What Should Be Included in the APA?
Now that both you and the buyer have agreed to terms in the LOI, your next step is to negotiate and agree to the most important document involved in the sale, the Asset Purchase Agreement (APA).
Some items to consider in the APA include:
- Purchase price and closing date
- Assets included in the sale, such as:
- Dental instruments
- Furniture and equipment
- The website, phone number, and social media sites
- Accounts receivable, if included
- The property, if applicable
- Handling of the transition process
- Retreatment
- Details regarding practice staff
- Restrictive covenants including non-competition agreements
- Warranties and representations
- List of contingencies
- Employment agreement, if you decide to stay on
The APA serves as a legally binding document that details the terms of the sale and lays out ways to protect both parties.
After agreeing to the APA, the next step is to introduce the buyer to your landlord, assuming there was no real estate involved in the transaction.
Closing Preparations with Triumphant Transition Partners
As the closing date for your practice sale approaches, there are several crucial tasks to address to ensure a seamless transition. These include:
- Transferring or establishing service provider accounts, such as utilities and phones, to facilitate continuity of operations.
- Arranging payroll and benefits for staff members to ensure a smooth transition for all involved parties.
- Completing PPO credentialing processes to maintain insurance affiliations and patient accessibility.
- Providing necessary documentation to the lender to secure funding for the buyer’s loan on the scheduled closing date.
With these tasks completed, you’re on the brink of finalizing the sale of the practice you’ve dedicated years to building. However, there are a few last-minute items regarding the transition and transfer of ownership to address.
Transition and Transfer of Ownership
In the final steps leading up to the transition, it’s crucial to ensure all loan documentation is finalized, including proof of satisfaction of any outstanding liens.
Furthermore, safeguarding the practice’s goodwill is paramount. This involves transparent communication of the transition to your team members and training them to relay this information positively to patients. Additionally, sending letters to patients to communicate the change can help maintain patient retention post-sale.
For further insights into effectively announcing your practice sale, we encourage you to explore our resources on communicating dental practice transitions to your team and patients.
Closing Thoughts
While selling a practice may evoke mixed emotions, it also signifies the beginning of a new chapter in your journey. Embrace this transition and the opportunities it presents as you embark on your next endeavor.
Remember, Triumphant Transition Partners is here to support you every step of the way – before, during, and after the sales process. We wish you the best of luck in your future endeavors!
Expanding on these sentiments, it’s important to emphasize the significance of proper legal and financial preparations in the closing stages. Engaging legal counsel to review contracts and ensure compliance with regulations can mitigate risks and streamline the process. Similarly, seeking financial guidance to optimize tax implications and manage proceeds from the sale is essential for long-term financial security.
Moreover, as you prepare to step away from the practice, consider the impact on your personal and professional relationships. Maintaining open communication with staff, colleagues, and referring partners can ease the transition and foster continued collaboration in the future.
Lastly, take time to celebrate your achievements and reflect on the journey that brought you to this point. Selling a practice is a significant milestone, marking the culmination of years of hard work and dedication. By embracing the opportunities ahead and leveraging the support of trusted advisors like Triumphant Transition Partners, you can confidently navigate this transition and embark on the next chapter of your career with optimism and excitement.
Ready to Hire Experienced Dental Brokers? Find Someone That Cares About You.
You are, of course, not expected to know everything about the process of selling a dental practice – but dental brokers are. The industry landscape is changing daily, and it is our job and passion to stay up to date with it all. We see this as a true partnership, and picking the right partner can mean the difference between a successful transition and a poor one. Our team truly cares about you and your dental practice and is committed to providing the best transition experience possible.
What is a Dental DSO or Dental DPO?
A and Dental Partnership Organization (DPO) contracts with dental practices and dental groups to provide non-clinical operations support services and core business management services.
By law, in most states, dentists must own and operate their dental practices. DSO/DPO-supported dentists can free up time to do what they love, practice dentistry, and leave the operational tasks to others who have created efficient systems. This allows dentists and dental groups to earn more income and flexibility in their professional and personal lives.
DSO/DPOs may be referred to synonymously as dental management service organizations, dental practice management firms, group dental organizations, dental management organizations, organized dental groups, and dental management service organizations. A broad term for Dental DSO/DPOs is Corporate Dentistry, but they are so much more.
At first, some dentists are afraid to relinquish control of the day-to-day dental practice business operations to a Dental DSO/DPO. In our experience at TTP, joining the RIGHT Dental DSO or DPO can be one of the most freeing experiences of your entire dental career. The key is to find the RIGHT Dental DSO/DPO Partnership structure for you. Did you know there are over 4,000 Dental DSO and DPOs in the United States? Finding the right fit for you is where our expertise comes in.
Dental DSO/DPOs can provide support services for:
• General administrative services
• Human resources and staffing
• Payroll and billing
• Insurance coding and insurance services liaison
• Advertising and marketing services
• IT services – Information technology
• Building and facilities management services
• Procurement services – durable and exposable goods
• Accounting services
• Regulatory compliance
By freeing up the numerous hours spent on these time-consuming tasks, solo dentists and group dental practices can have free time to balance their lifestyles, have a higher quality of life, and expand their clinical skills to deliver higher levels of service to their patients while building generational wealth.
Free Dental Practice Valuation
An accurate valuation greatly contributes to the overall success of your dental practice’s sale and ensures you receive the highest possible value. At Triumphant Transition Partners, we offer free dental practice valuations and consultations. Call us at 512-924-8808 or schedule a 15-minute courtesy consultation.