Closing the sale: 7 “Must-do’s” to maximize practice value
If you are planning to sell all or a portion of the dental practice here are some tips to turn your valuable practice asset into cash.
- Allow lots of time. Don’t rush to book the airline tickets to your retirement home in New Zealand. Don’t wait until health problems force your hand. Purchasers are astute. They can sense very quickly if you are in a hurry to retire, all of which is reflected in a lower offer.
- Never let billings slip. It does not matter how much money you made in the last 15 years, the revenues and the cash flow in the year of the sale is what counts. A practice with slipping profitability is a hard sell.
- Be involved. Unlike a home sale where the broker does all the work and the purchaser does not really care. If he ever meets you in a practice sale, on the other hand, you are the best salesperson. When you and the prospective purchaser “hit it off”, you can bet that the practice sale will go smoothly. Personal bonding is the glue which will keep the deal together.
- Do some housekeeping. Make sure that your practice has curb appeal. It means that your office is in good repair with fresh paint and clean carpets.
- Be realistic. Set a reasonable price and have it backed up with a professional Practice Valuation.
- Make sure that long-term commitments can be assigned. Ensure that the lease for the premises can be assigned and without your continuing personal guarantee.
- Prepare professionally looking documents. This would include a practice and patient profile, as well as up-to-date financial statements and billing records. If you are in a group practice, make sure that the cost-sharing and buy-sell agreements are up-to-date.
