As experienced dental practice brokers in Australia, my team and I are always amazed at the misconceptions that some dentists have about the process of selling a practice. In this article, we thought we would address some of the more common seller misconceptions that we hear:

Seller Myth #6 : A buyer will not want me work in the practice post sale because they will want all of my patients.

While you may not be enough patients to keep 2 dentists busy full time, most buyers would still like for you to stay and work post sale in at least reduced capacity post sale (say 1- 2 days per week) for 6-12 months. 

You working alongside the purchaser:

1. Allows you to finish cases, 
2. Allows you to help with the history of patient or practice issues
3. Provides an implied endorsement to the patient base and in this way helps with patient transfer and retention.
4. Keeps patients like immediate family and close friends of the vendor in the practice that would be less likely to transfer easily.

Seller Myth #7 : I will sell after I renovate – the practice will be more attractive and worth more then.

While the aesthetics can make a practice more or less attractive to a buyer, the primary driver of what a buyer will pay (and what a bank will lend a buyer) will be the proven maintainable financial return.

The general rule that I tell vendors is that any major reinvestment that they are considering has to be reflected in the practice financials in increased income or reduced expenses for at least 12 months before you put the practice on the market in order for it to make an impact on the price.

Seller Myth #8: I am worried that when my staff find out that I am selling they will start looking for another job.

The truth of it is that people don’t stay at their jobs purely out of a love of their boss. Most of them stay because they like some combination of:

• Their pay,
• The job description,
• The location of the job and how convenient it is for where they live or where their kids go to school,
• The team including their boss.

Staff that are otherwise happy with the pay, team, job description and location of their job wont quit and risk not getting these things at another job just because the boss changes. In the vast majority of cases when a practice sells, the staff stay and give the new owner a chance to prove themselves.

Seller Myth #9:  A lawyer is a lawyer… 

When you are selecting a lawyer to represent you in your transaction, please look for one that is:

1. Available and quick to respond. 

There is a saying that “Time kills deals”. When you have a deal on the table and both sides are excited to accept, you want that excitement to help carry the deal to the finish line. Any delay can break that momentum and allow circumstances inside the practice (e.g., staff quitting, or downturn in figures) or outside the practice (another offer comes in, changes in economic circumstances, etc.) to interfere with that momentum.  Lawyers that can work on your matter and respond quickly are much more likely to get you to the finish line.

2. Professional and polite in their approach. 

A lawyer that is antagonistic and combative or rude in their correspondence can kill a deal.

3. Experienced in vet practice sales

Most veterinarians would cringe to hear of someone in their profession selling themselves to clients as able to do complex clinical work that is outside of their abilities. Work that should be referred to someone else. This is how I feel when a buyer tells me that they:

• Will be using a lawyer to help them buy a practice that they used for their divorce, immigration or buying their house.
• Have a lawyer that “does a bit of everything”.

Buying a practice is an expensive and complex transaction, with many moving parts. To give yourself the best chance of success, you need specialised help from a commercial lawyer.

Part 1 of this article with Seller myths 1-5 can be found here