If you’ve poured your heart and soul into building your dental practice, selling the business may be bittersweet. You’ve spent countless hours perfecting your craft and building a successful practice, and now it’s time to move on.
Selling your practice may be the most substantial financial transaction that you’ll engage in during your lifetime. It’s also likely to be one of the most meaningful events of your life, marking a major transition and positioning you for the comfortable retirement that you’ve earned.
Medical practice ownership transitions can take many forms and there’s no one-size-fits-all approach to selling your business. That said, there are some general stages that you should plan on navigating as you move toward a sale.
If you’re ready to discuss your dental practice sale with our team of advisors, contact Duckett Ladd. To help get you prepared for this major transition, review the steps described below for a high-level overview of the sale process.
1: Find a Dental Broker
The first step toward selling your dental practice is to find a dental broker that you’d like to work with.
A dental broker is a real estate professional who specializes in the buying and selling of dental practices. Dental brokers offer guidance and administrative support. Broker services are typically customizable to your level of need, depending on how much of a hands-on seller you prefer to be.
2: Prepare Your Financials
With the assistance of your broker and/or your financial advisor, you’ll need to prepare your financial documents. This process provides a great opportunity to get organized and gain a more nuanced understanding of your practice’s finances.
Financial documents you’ll need to gather or prepare include a profit and loss statement, balance sheets, and tax returns. These documents will be provided to potential buyers to inform them of the financial health of your practice.
During this time, you can set a valuation for the practice based on its existing assets, outstanding debts and liabilities, and projected revenues. Your broker will then help you choose a listing price based on the practice’s valuation and the current market climate.
3: Create a Marketing Plan
Your broker can help you develop a marketing plan. This should include the presentation of key info about the practice, such as location, patient demographics, and services offered. Your marketing materials should also include pricing info and specify which sale components you’re open to negotiating.
4: Find Potential Buyers
Brokers hunt for buyers by connecting with their network of fellow brokers and other dental industry professionals. Brokers may also advertise and promote your listing via:
- Listing on their website
- Direct mailing and email
- Digital marketing and social media
When your broker comes into contact with a potential buyer, your broker will schedule a time for the potential buyer to visit your office and meet with you.
Initial meetings with potential buyers may start with the signing of a non-disclosure agreement. The two parties can then discuss buying and selling goals, share financial information, and establish timeline commitments for proceeding with a potential sale.
5: Negotiate the Sale
Once you’ve found a motivated buyer, sale negotiations can begin in earnest. Your broker will help you negotiate a fair price for your practice, serving as an intermediary and providing recommendations that you can choose to follow or not. Once an agreement has been reached, both parties will sign a sales contract.
6: Close the Deal
After signing the sales contract, it’s time to complete the sale by transferring ownership of the practice to the buyer.
Transferred assets may include real estate, equipment, assets, and other materials. Agreements may also be worked out to transfer possession of patient medical records and to transfer employment contracts with your current staff. Your broker will help you through this process to ensure that everything goes smoothly.
7: Get Paid
Soon after the deal is closed, you’ll receive payment. This may be made in a lump sum or in installments, depending on the terms of the sale.
Get Expert Guidance for Selling Your Dental Practice
At Duckett Ladd, we’re a team of CPAs and advisors that works exclusively with the dental industry. We provide expert guidance to dentists in all career phases, from year one to retirement. Our services include:
- Dental practice growth advising
- Dental practice mergers and acquisitions assistance
- Accounting business services for dentists
To learn more, contact our team of dental industry experts today.