Why Use A Broker In A Private Sale?
To obtain the highest value and best transition for your practice in today’s market.
We have completed over a thousand practice valuations over the past twenty-five years. Some valuations are for public sales and other for private. Over the last five years, practice values have increased to record high prices.
There are many purchasers looking for a bargain when negotiating a private sale. Within the last four months, we have been involved in three private sales. With the assistance of an experienced dental broker, those vendors received between $100,000 to $400,000 over the original asking price. Still worried about paying commissions?
Why Do Sellers Need A Broker?
So, you have decided to sell your practice. Technically, it is a business venture you started many years ago, to obtain and sustain a nice lifestyle, while helping people with good oral health.
Somewhere between year one and year twenty-five, this practice became like family. And now, you want to sell your family. Starting to understand the picture?
In addition to the emotional stress of selling your practice, it is imperative you maintain that level of success during the sales process. This can be easily achieved by keeping your focus on your practice and patients. The sales aspect will be handled for you, by the broker.
Once the evaluation is complete and you have a fair market value for your practice, the process can begin. In a private sale, the purchaser has been selected but that is only the beginning.
Selling a dental practice is not as straightforward as it may first appear. Do you want your staff and patients to know the practice is on the market? Contracts, valuations, and accounting and tax considerations can overwhelm even the most business-oriented dentist.
Professional guidance facilitates a successful sale at a fair price. The process starts with a valuation that can be completed by your broker or an outside agency specializing in dental practice valuations. Considering the valuation, pricing right for the market can determine whether or not prospective purchasers even consider your practice.
By utilizing a broker, you can maintain confidentiality and minimize the disruption to your practice routine. Involving a third party reduces liability and avoids misrepresentation that may unintentionally arise when you are emotionally involved in the sale of your practice.
A good broker will look after the details: completing the valuation, showing the practice, qualifying potential purchasers and answering their questions. Potential purchasers sign a confidentiality agreement prior to any information being released. Showings occur after hours, so as not to disrupt the operation of the practice.
Brokering in Canada is a regulated profession. Brokers will negotiate the sale and facilitate the transition. When necessary they can refer you to other qualified professionals such as bankers,lawyers and accountants that specialize in the dental market which facilitates closing the sale.
Buyer’s Benefit When A Broker Is involved?
As a buyer, it is difficult to know what is available. With confidentiality a priority on both sides, finding opportunities can be a challenge. Dental brokers are experts at valuating and selling dental practices. Dealing with someone exclusive in the dental field will give you the best results in achieving the best transition.
Brokers assist throughout the purchasing process. They can help with dental practice valuations/dental appraisals, due diligence, referrals to reputable professionals, cash flow analysis, strategic consulting, financing options and more. They will help you make an informed decision.
How Long Will It Take A Broker To Sell My Practice in A Private Sales?
The time frame to sell is individual. A very general guideline is between one to four months. The length of time it takes to sell your practice depends upon the type of practice, its financial performance, location, price, terms, and local market conditions. The time varies based on the time to complete the due diligence; chart audit, equipment inspections and legal and accounting reviews. In addition, the time line is dependent on the amount of notice needed to be given at their current practice.
Where Do I Find A Broker?
Dental brokers are best found based on experience, ethics and education. There are consultants that facilitate practice sales, but are not licensed brokers. Credible dental practice brokers are approved by financial institutions, advertised in dental journals, seen supporting local dental association fundraisers, and speaking and networking at local dental meetings. Referrals from happy colleagues are a good starting point.
Preparation yields the greatest results. An experienced dental practice broker will bring the best outcome in a private sale, while allowing you to focus on your business, caring for your patients.