Almost all dentists ask one common question when they want to sell a dental practice. That question is “How long does selling a practice take?”
As a former dentist and current dental practice broker, Dr Gary knows dentists don’t like facetious answers, they like facts and data. So, if you’re thinking about selling, the quick answer is dental transitions take between six to nine months to find a buyer who is a good fit for your practice. After more than a decade of presenting dentists in the buying and selling of practices, Dr Gary admits this is a very general statement that needs to be explained better.
This article will examine three factors that make the process of selling a dental practice take six to nine months on average.
They are:
- Your readiness to sell
- The market readiness of your practice
- How quickly roadblocks and problems can be eliminated
Am I ready to sell my dental practice?
This is the area where the selling dentist has the most control. Only you will know the triggers that will prompt you to think that it is time to move on to a different stage in your life. No one, not a broker or a buyer, can determine when you are ready to sell. That is a point you determine in your timeline according to your life goals.
With that being said, being ready also means being prepared. Preparations need to begin long before your practice is listed. This is where an experienced dental broker is helpful. Markets fluctuate. That’s the law of any business. Ideally, you will want to match your desire to sell with the high points of what the market will bear.
That’s why it’s best to call Dr. Gary when you’re first thinking about selling your practice. You’ll avoid a lot of mistakes and missteps if you avail yourself of the resources he has to help you create an exit plan that’s smooth and profitable.
What resources do I need to sell my practice?
The best resource you can have to sell your practice is a professional broker. Many dentists share a common belief that because they have been in charge of starting and running their practice, they need to be in charge of selling it also. This is not correct. As the owner of your practice, you are only in charge of the selling side of the negotiations. The rest is determined by the market, the buyer, and the many moving parts they bring with them. As the seller, you need only focus on your own goals, not the process it will take to get there.
So, let’s assume you are starting to think about selling your practice. What’s next?
Is my practice “market ready”?
Your practice may be market ready even if you don’t have the most up-to-date equipment or technology. The success of your sale will depend on balancing the kind of practice you have with the buyer’s needs. Market conditions and financing also play an important role in determining what offer your buyer will make. There is no need to start renovating or changing your office until you’ve determined what your market conditions are. You don’t want to waste money unnecessarily. It’s best to get expert advice on what, if anything, needs to change.
Most dentists who are running a thriving practice have no firsthand experience with what today’s would-be buyers want. They don’t have time for market research and besides, what people say they want and what they will pay for are often very different.
Determining how your office matches up with buyer expectations and other competing sellers requires specialized expertise that only comes from dealing with hundreds of transactions. It’s a waste of the selling dentist’s time to get overly involved in this area. It takes a large network of contacts to bring together a seller and buyer who can agree on all the complicated terms and conditions that must be dealt with in the sale.
Putting the focus on your future
As you move forward in finally putting your dental practice up for sale, you need to focus on serving your patients and continuing to provide a good environment for your staff members. You can not allow your practice to fall off because this will affect the amount of money you will get for your sale. Prospective buyers may interpret that a small drop off now indicates a big decline in future earnings. This could scare them off entirely.
On the other hand, your practice has been your life’s work. You deserve to get the most amount of money possible when you sell. So, if you’re ready and the practice is market ready, will the rest go smoothly? Not likely without help from a competent broker.
Solving problems, unblocking bottlenecks, minimizing red tape
Selling a dental practice is an involved process and the stakes for everyone are very high. There are often up to ten players who each have a role in moving the ball across the goal line. What is important to understand is that legally the agents on the seller’s and the buyer’s side can’t communicate directly with one another. All communication must go through the buyer’s and seller’s lawyers.
This can create bottlenecks and delays as the sales contract gets negotiated and various performance milestones occur. Unfortunately, people are human, and mistakes happen. Essential people may become suddenly unavailable or simply drop the ball. This could lead to the collapse of the whole deal. Starting over is frustrating, disappointing, and a waste of time. Let’s not let that happen.
As a seller, you need to be aware that much of the sales process is out of your control. It’s also out of the buyer’s control. Even the lawyers don’t have full control. Lawyers are limited in what they can do as well. It’s easy to lose sight of the common goal, which is to transition the practice from the seller to the buyer.
Dr Gary makes every effort to keep a good deal together. In his role as broker for your dental practice, he is the only member of the entire team of participants that can communicate directly with any other member. This is one of the most valuable aspects of hiring dental brokers. He is the only one who can serve both parties fairly, pick up the ball if it gets dropped, and move the sale forward.
Closing within 6 to 9 months
So now you have the fast answer: A closing for the average dental practice will take six to nine months. As you can undoubtably tell, fast answers aren’t always the best answers, but they are a starting point. They satisfy an initial curiosity and establish a basis for going forward.
About Dr Gary
Dr Gary started his business, Health Care Practice Sales, LLC, after a disappointing experience selling his own three practices. In his trial by fire, he learned how to broker a successful sale by satisfying all parties involved. He’s spent nearly a decade lifting the burden of what to do next off his clients’ shoulders. By taking care of all the details of the transaction, he allows the seller and the buyer to focus on their own goals. He helps give them the future they want.
If you’re interested in selling or buying a dental practice, you can call Dr Gary at 201-663-0935. He answers his phone 24/7 every day of the year except Christmas and Easter. You can also email him at drgary@dentalpracticeguide.com or fill out our contact form.
Curious about dental practice valuations?
Check out our article on Dental Practice Appraisals and Valuation Methods. Just click here: https://dentalpracticeguide.com/dental-practice-appraisals-and-valuation-methods/
