Looking to Sell Your Dental Practice?
Selling your dental practice is more complex than finding the right buyer and closing the deal. It takes a great deal of practical and emotional preparation. What you once nurtured as your baby, is now ready to be handed over, for a greater tomorrow. You could sell a practice to expand growth, or because of shifting bases, but dental practice transitions need strategic planning.
With Magnus Practice Transitions, you are in the best hands. Our team of expert dentists, dental brokers, legal professionals, and marketing and management teams ensure that you sell your practice successfully, and stress-free, to someone who will uphold your legacy, patient base and staff.
Here is a step-by-step guide on How to sell a dental practice the right way:
STEP #1 Sales Consultation
At Magnus Practice Transitions, we begin with a detailed sales consultation. Ideally, experts say that you should plan your dental practice sale 3-5 years in advance. In case you haven’t, fret not. Allow us to pitch in and we take it from here.
Selling your dental office is a big decision; it needs careful planning. Starting as early as possible gives you scope for a good sale price, to take time with negotiations, make improvements, and also prepares your patients and staff for the next phase.
Our consultations include a walkthrough of the practice sales process involving professionals like experienced dentists, dental brokers, CPAs, and attorneys for better planning. We work together to decide on the type of sale—forming a partnership, creating agreements with associates, selling to another practice, or a dental support organization (DSO). We help you weigh the pros and cons of each, so choose what suits you best.
STEP #2 Practice Valuation
Practice valuations give you the right market value for your dental practice. Are you wondering how much your dental practice is worth and if you are cutting the right deal? That’s where the transition advisors step in.Taking some time to plan your value for the practice. It helps you evaluate, improve, and set the right price—what we call practice valuation. It gives you the current market assessment so that you propose a reasonable market price when selling dental practice. This helps prepare an accurate appraisal of all the unanticipated events or financing applications as well. Not all valuations are the same. We use different approaches, like different valuation methods: income-based, market-based, and net asset. It’s best practice to work closely with the practice owner.
You can slowly update the clinic interiors, improve cash flow, reduce liability, and attract new patients. Collect all the important documents, like:
- Lease agreements
- Employee pay/benefits
- Equipment lists
- Tax documents
- Profit and loss statements
- Licenses and Insurance
- Loan documents
STEP #3 Listing Period
Up next is listing your practice to find the right buyer. The listing agreement, is like a mental switch for the seller and helps them plan and act on selling their practice. That will be our first step. We then start marketing your dental practice listing.
This will include advertisements through print ads, online listings, and listings on dental association websites. The listings have details of building ownership, patient base, staff count, vacancies for future roles, and buyer qualifications. It’s best to be transparent & clear about these. It can help find the right buyer. Dentistry is a specialized, niche sector. So it may take some work to find a buyer. This marketing a dental practice during the listing period, crucial.
STEP #4 Review Offers
During the listing period, you’ll get multiple offers. You have to review every one of them.
When you receive an offer to buy your practice, make sure you fully understand the terms. Check to see if the buyer can afford to buy the practice and if the offer includes the opportunity to continue working as an associate. Also, check to see if any other team members need to agree to stay for the deal to be completed. It is not enough to simply choose the highest offer; other factors must also be considered.
In case you have a promising offer coming your way, the dental practice transitions broker attempts to negotiate a favorable agreement for the seller. This takes us to the next step of negotiations & due diligence.
STEP #5 Due Diligence
Once the expert negotiators and you have fairly negotiated the price practice valuations, the legal help aboard our team will help you with the due diligence.
To avoid misunderstandings, we record the agreed-upon terms in a document called “Heads of Terms” after negotiating the contract.
Once both parties have reached a common consensus, the buyer will do legal, clinical, and financial due diligence. This includes delivering documents like financial information, patient lists, and property lease agreements. If you are selling dental practice, please maintain transparency throughout the process and provide all documents as requested.
STEP #6 Closing & Transition
The buyer’s lawyer often asks for a documented guarantee from the seller that verifies that all the information provided is accurate. We term it the Standard Purchase Agreement—it covers the sale of the practice and its assets, transfers, treatments, staff, non-solicitation restrictions, guarantees, and other terms. Once both parties have agreed, their lawyers will consummate the transaction.
Our team offers a handheld approach to the sales process. You receive the money online and send it to your bank account. Be cautious when spending, as you may face a capital gains tax obligation.
Selling a dental practice involves strategic planning with the help of an expert transition advisor. Every step is well-curated and involves documentation. Feel free to reach out to our team at dental practice transitions to help you streamline this process.
