Practice Negotiating Tip: Increase the Perceived Value of Your Practice

If the price you are asking is supported by a valuation report and it reflects true market value, but you are still experiencing kickback on the price, then you are probably experiencing a value-proposition perception issue. Basically, the buyer does not feel that what they are buying is worth what you are asking. This can turn into a 6,000-pound elephant in the room, one that is sitting between you and the buyer. It can pose a seemingly insurmountable hurdle.

To overcome this, the best course of action is to add value to the proposition rather than cut price. The more you get to know what motivates the buyer and discover their needs, the better you will be able to add value to the deal. In my experience, the most common areas to do this relate to financing and real estate. Often buyers are keen to own the practice’s real estate but are unable to get full financing. In this case you might consider offering a seller’s mortgage for the shortfall.

At other times, it’s related to the buyer’s circumstances. For instance, if you can solve a major problem they are experiencing, you can make the deal more attractive. I’ve seen sellers help the spouse of a buyer find work in the community, or offer to mentor a young dentist who is concerned about the financial exposure of the purchase due to their inexperience. Solving key issues that are making the buyer nervous, adds value to the deal and can overcome price resistance, or commitment-hesitancy.

Rather than browbeating the buyer into accepting a deal on your terms, take the time to understand what they want from the deal and devise your negotiation strategy accordingly. As you negotiate the sale, if you experience price resistance, summarize all the benefits of the deal. This will help build value in the buyer’s mind. If you know your price is fair, the only deal-breaker is that the buyer fails to “see” the value. In short, never defend price, promote value.