Tips for Sellers

With demand for dental practices high and capital gains taxes and interest rates low, now is the time to sell your practice.

By following these tips, you can get TOP DOLLAR for your practice:

1. Make sure your annual revenue doesn’t fall below the prior year’s level.

Declining revenue is a red flag for many buyers. Moreover, banks use only results from the most recent year when assessing the value of a practice.

2. Invest in modern equipment.

Even small investments in new equipment can significantly boost your sale price.

3. Isolate and identify discretionary expenses

Discretionary expenses affect income negatively and don’t allow the income statements and tax returns to accurately reflect the financial position of the dental practice.  These must be explained or the buyer will think the practice is less profitable than it really is.

4. Investigate the transferability clause in your lease

If necessary, have an attorney look into how you can transfer your lease.  This has bogged down deals, so that if this can be dealt with at the beginning of thse process, deals can be much easier to negotiate and complete.

5. Present credible data.

Ensure that the data on your practice is verifiable and well-organized. Reports on multiple data points – including demographics, insurance, practice management, accounts receivable, and profit and loss statements – should be provided to buyers. Young buyers will demand to see this information before they agree to a transaction.

6. Ensure that your office is very clean

Cleanliness is extremely important to prospective buyers.  Floors, carpets, and walls must all be clean, while operatories, labs, rest rooms and the front desk area must be spotless. All of the equipment has to shine, and supplies must be well-organized.

7. Tabulate financial and statistical data

Buyers will want to evaluate your financial and statistical data before visiting your office. If the data is not saved on a computer, you should, for a period of a few months, write in your appointment book the zip code of each patient and the procedures performed on him/her.

8. Sell your practice NOW!

We are in a seller’s market, with demand far outpacing supply. Many dental school graduates are saddled with high levels of debt and are desperately looking for profitable practices. Meanwhile, banks are lending at very low rates. These great conditions won’t last forever. Interest rates are already starting to rise. Now is the time to sell!

Sellers can recruit their own buyers. We will continue to work with such sellers and we will help them close their deals. Moreover, they will get a significant discount on our commission fee.