Selling your dental practice can be scary, right? There are a lot of unknowns and little details in the transition process, and it can really become stressful at a time when you’re preparing to wind down, not spend even more time on your practice. As we approach Halloween and the season for “scaring,” we thought we’d look at some ways that sellers have scared off potential buyers, either unwittingly or due to lack of qualified assistance selling the practice. Make sure to avoid these six transition mistakes as you look for the next owner of your dental practice!
A Difficult Broker, or Not Having One at All
If your dental broker is difficult to work with, either for you or potential buyers, it’s a problem. The broker should always have your best interests at heart, communicate clearly and be responsive, and be willing to work with potential buyers and their teams. A broker who doesn’t know how to negotiate or communicate well can leave your practice transition in peril.
On the flip side, if you decide to go without a broker at all, you’re opening yourself up to countless pitfalls and mistakes that can either significantly slow down the sale of the practice or prevent it from happening entirely. A knowledgeable dental broker who knows the industry and your marketplace is well worth the money, and in many cases they can help you get a better price in the long run.
Offer of Sale to Associate with No Buy
If you’ve offered your practice to an existing associate, but he or she didn’t want to buy it OR the deal fell through, any buyer will be on edge and want to know why. Did they not have the money? Were they not interested? What’s going on behind the scenes if an associate didn’t want it? It’s important to choose your transition plan and potential successors wisely. If money is an issue, there are partnerships and buy-in structures that work well over time. But if the associate simply didn’t want the hassle, you’ll want to find out why before you sell, and work on fixing any glaring errors in production, staffing, or practice management before you expect an outside buyer to step in.
Dodging Questions or Being Unresponsive
Although the process of transitioning your dental practice can become stressful at times, it’s not a good idea to leave people hanging. Whether it’s your broker, financial advisor, or potential buyers, make it a point to respond to all questions quickly. If you’re not sure how to answer buyer questions, let your broker coach you on appropriate responses. It’s okay to say “I’ll get back to you soon”; it’s not okay to ignore your advisors or potential buyers.
Telling Staff or Patients Too Early
Even if a buyer tells you in an email that she intends to purchase your practice, it is still too soon to inform patients or staff! Wait until you have a signed purchase agreement to break the news. It’s preferable to have a communications plan in place before you tell patients or staff, so they can feel comfortable that their future is in good hands. Telling them too soon can not only jeopardize their relationship with the practice – they might look elsewhere – but if the sale falls through, you lost credibility.
You Still Intend to Practice Elsewhere
If you own or operate more than one dental practice in a similar area, or intend to open another practice closer to home, let’s say, those are all red flags to potential buyers. Even though you might want to scale down your practice, focus on one thing, or move and open a new practice elsewhere, the buyer may rightfully be concerned about you taking patients with you. If this is the case, expect to sign a non-compete agreement before a sale can be finalized.
Do you just want to be rid of your practice and will agree to any terms the buyer sets forth? If you come across too eager, too willing to sell quickly, buyers might be left wondering why. There might not be a reason except that you simply want to retire and the price and terms don’t matter. Or maybe there’s a medical reason you’re leaving quickly. We have seen many scenarios (on the buyer side) of sellers with disingenuous intentions, so If there’s something else going on that you’ll take the first buyer regardless of situation, be transparent with your reasoning so your overeager behavior isn’t seen as suspect.
Not sure you’re going about the transition process correctly? Don’t want to scare away potential buyers? Contact N/L Transitions with questions about how to make the sale of your dental practice smooth, stress-free, and definitely not scary.