Do-It-Yourself (DIY) projects are usually a great source of pride for the person undertaking the project. They are a way of putting your unique touch on something, creating a personal vision or an ideal, from formless raw materials - often saving you money at the same time.
It’s a great idea when you have some experience in the field - the stakes are low, you aren’t relying on the outcome of the project in any real way, and it doesn’t really matter if, after making an attempt and failing, you start again and redo the project, as there won’t be much in the way of real, lasting damage to your wellbeing or your way of life.
Many people reading this article would agree that safe territory for DIY projects might include gardening, carpentry, painting, assembling IKEA furniture, low-level recruitment…
They would equally agree that unsafe territory for untrained DIY projects could be electrical work on your house, lion taming, asbestos removal, or practicing dentistry (if you’re not a dentist).
Most home owners recognise the value of engaging a real estate agent to sell their house, rather than putting a home-made sign in their front yard and trying to sell it themselves as a DIY project.
Somehow though, many practice owners will still attempt to sell their own businesses.
For some reason, they feel this is safe territory for first-timers to enter into.
If you are a practice owner and are thinking of selling your practice yourself, here are three reasons why this might be a bad idea:
1. The stakes are too high
Re-doing a DIY carpentry project may cost you some wood. Redoing a DIY gardening project may cost you some plants. Your business, however, may have taken decades to build, and there is no undoing its sale. Once it is gone, it is gone. Doing a bad or sub-optimal job will cost you more than wood and plants. It could cost you dearly in your retirement plans and lifestyle.
2. A re-do leads to sub-optimal results
Many practice owners believe that they can try it themselves first and then, if that doesn’t work, engage a professional to do it. However, selling a business isn’t like baking a cake, gardening or carpentry, where you can scrap the results from the first attempt and start from scratch.
The market has a memory. People are suspicious of a good business that has sat on the market for a long time. In short...restarting a failed selling campaign is like trying to restart a fire with burnt wood.
3. Any savings are a false economy
Most dentists who choose not to engage a broker to help them sell their practice will do so in order to save themselves a brokerage fee. However, any savings can be a false economy in time and price paid, as the dentist has cost himself:
Time taken. Any dentists thinking of selling their own practice should make sure they have the available time to dedicate to the task, as a compromise in time-spent will no doubt mean a compromise in the result.
The average practice sale can take about 100 hours of work in:
- Gathering and collating information and documentation (from lawyers, accountants, bookkeepers, dental software and the local council)
- Distributing the appropriate information and documentation to buyers, their financiers and lawyers
- Showing interested parties through
- Answering potential buyers’ questions in person and through correspondence
- Negotiating price and terms
- Keeping lawyers on track and away from each other’s necks during the finalisation of drafts of the purchase and sale agreement, the premises lease and the vendor’s employment/contractor agreement, post-sale.
Even if the vendor has the time to dedicate to doing all of the above properly (which is not easy), and could get the same result as a professional broker (even more difficult), they should factor in the opportunity cost of the time spent doing this, in between seeing patients and running a practice.
Price paid.
I don’t think many would argue that a professional, experienced in a task, will almost always do a better job than a first-timer. This isn’t because of the professional’s innate talent, physical or mental attributes, but rather because the professional has done that task over and over again.
The professional broker knows the craft, the pitfalls and how to get the best results at their job. The first-timer does not.
A dental practice business broker spends every day selling dental practices. They know the tips and tricks, the moving parts, what buyers look at and what they don’t, where the appropriate buyers look for practices, where the hidden wealth and opportunities in dental practices lie, and how to highlight them in order to maximise the purchase price. A first-timer does not.
Who is more likely to:
- Make a better cabinet – a cabinet maker or a dentist with a workshop in their basement and a book on carpentry?
- Make a better gourmet meal – a professional chef or a dentist with a cookbook he got for his birthday?
- Get a better price for the sale your dental practice….?
It is perhaps no surprise that DIY projects are a popular concept among business owners. After all, good business owners are creating something from a vision. However, as with any DIY project, it is important to realise when it’s time to get some help from a professional. The test of this usually has to do with the stakes associated.
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