The dentist is the backbone of the practice; in fact, there are many patients who become so attached to their dentist, that they will drive across town or even longer distances to see him or her. Unfortunately, when the dentist passes on, the practice is at risk of being sold at a loss or even being shut down for good - unless swift action is taken.
Dental Practice Estate Sale Tips
The sad fact of dental practice sales is that if the business is not growing, it's losing value. Following the death of the owner, it's critical that the dental practice is sold within the first 30 to 60 days to ensure that the value does not significantly diminish. Many families don't realize that often the practice doesn't have to clear probate before it can be sold; rather, the buyer can sign a contract and put down a deposit to serve as earnest money. The practice can then hire the buyer to work as a contractor until the title is cleared.
There are a number of things you can do to smooth the sale of the dental practice. The first thing you should do is to get copies of business tax returns and associate contracts for the last three years. You should also ask the landlord if the lease can be assigned.
Cash flow is the most important value of the dental practice. Typically, hard assets account for only 20% of the total value. For this reason, getting the practice appraised as quickly as possible is important. If the practice is still on the market after a month, consider reducing the price below the appraisal amount.
While you are searching for the right buyer, it may be beneficial to have another dentist come in to cover any patient emergencies and keep the practice running. This ensures that the patients and staff are at ease. However, this dentist should sign a non-compete contract so he or she cannot take any patients or staff once the sale is complete.
And remember this—when patients have developed a long-term relationship with the dentist and staff in a practice, they feel like part of the family. We always recommend sending a letter to the patients to let them know you are grateful for their support and that you and the staff are searching for the right buyer to take over the practice. Once the practice is sold, an introduction letter should be sent to the patients.
If you have come upon this article, because you have recently lost a loved one, we extend our deepest condolences.