Dental Practice Sales MLS
Dental Practice Sales MLS
Real Estate has primarily adopted a very successful way of marketing properties under their MLS system. I believe Dental Practice Sales has been left behind and there is an opportunity to bring the same success with dental practice brokers.
Blog By:

How to know it's really time to sell your practice

How to know it's really time to sell your practice

8/29/2018 4:51:29 AM   |   Comments: 0   |   Views: 46

How to know it's really time to sell your practice

How to know its really time to sell your practice and how you can help ensure you get what it is worth. Delaying selling too long can drastically decrease the money you get for your practice AND make it harder to find someone to buy your practice. As you lose enthusiasm, reduce your office hours, do not invest money in your practice the value of the practice will decrease and selling it will be more difficult. Finding a Buyer who will give a Seller what they think its worth and invest a great deal of time and additional money in the practice is not financially feasible today. There are Buyers who want the Seller to stay and work as long as possible as the Buyer concentrated on modernizing the office. Dentists can stay on as employees for many years under these circumstances.

The new owner can build it up easily

I hear this all the time. The seller dentist says the buyer will be able to do all these easy things that will make the office far more valuable.  If its so easy to do then the seller dentist needs to do it BEFORE listing it for sale. No buyer is going to pay for what an office potentially would be if they invested time and money into growing that practice. It might give them the incentive to buy this practice because it has excellent growth potential. But, they are only going to pay for what it is worth when they buy it. If they buy it and then invest time and money growing it then that growth is their new equity in the practice. Just like buying a fixer-upper house below the prices of other houses in the neighborhood. You buy a fixer-upper at a discount; put time and money in, and then the house will be worth what the other houses on the block are worth. And if you did it right then the price you paid plus the time and money you put in is equal to or less than the value of the other homes on the block. Otherwise, you might as well have bought a house that didn’t need all this fixing up and winds up costing more in the long run.

How to know when its time

Many dentists experience a Semi-Retirement period, caused by burnout, stress, chaos and or personal issues. Interestingly, once the problem has been eliminated or resolved, a new energy is experienced, and the dentist is again enthusiastic about practicing.

One of the most common examples of this is the transition of a practice, bringing on an associate or partner with a buy-sell expectation. Once the pressure is off the selling dentist, they begin to enjoy dentistry again,  and delays, often to the chagrin of the buyer, the sale.

One or more of the following should define the exit stage:

  • The acknowledgment of a physical or mental impairment
  • The financial ability to retire with real financial freedom
  • The desire and excitement to pursue new and other interests
  • The willingness to walk away from the practice, the patients and the professional relationships that have developed
  • The real distaste or dislike of the practice of dentistry

We find that unless a dentist has reached the point of financial security and embraced the real desire to retire to do something else, there is a good chance they will find a void in their life and the desire or need to return to practice.

Beyond that, even with the economic climate being as it has been, we often encounter dentists who have an unrealistic value of their practice, or an unrealistic need for the proceeds from a potential sale.

The bottom line is this: It simply does not matter how much you think your practice is worth, its actual value is only determined after it has been purchased, whereby the buyer and you have agreed upon the price. If your asking price is too high, it will not sell, if your asking price is too low, you will not receive your due compensation for your business.

Get an expert appraisal

As is spoken of time and time again, to accurately value a dental practice it is best to engage an expert who performs dental practice appraisals and does them on a regular basis with standard, accepted business valuation methodologies. Further, they need to have specific knowledge of the dental practice, how it functions and how the operations correlate to the income (profit and loss) statement and tax returns.

It's important to note, too, that the dental practice marketplace is different from any other profession and has many facets that are completely unlike any other business. Average Market Value Formulas may not apply to your particular practice.

It would be the same as if you were told a patient has a toothache and without seeing that person you decide she has an abscess. It may or may not be an accurate diagnosis and would not be definitive until you examined the patient. The same goes for appraisals; contact a knowledgeable professional for a thorough evaluation!

Don't forget about tax consequences

Another extremely important issue when considering the sale of your practice is the tax consequence of your sale. Proper allocation of the purchase price can save thousands of dollars. A professional transitions specialist/expert can work with the allocations, while a competent accountant who has dental practice experience should be consulted to ensure unreasonable tax liabilities or consequences are not present.

Start planning

This just skims the surface. Beyond the idea of retirement itself as well as the various aspects of an actual valuation, there are the intricacies of the type of transition itself and then the corresponding details that go into developing and executing the plan. This is where the true expert shines.

Not only does it allow for specific planning for the transition, beyond selecting the right path, it allows you to properly position the practice for a transition while concurrently allowing for the maximum amount of personal take-home income and retirement funding. While a few years is nice, even five years or more can prove to be invaluable when it comes to true retirement.

You are not alone if you are struggling financially

Dentists today are for the majority struggling financially. Insurance companies hold down the reimbursements while expenses continue to rise. The ability to save money for retirement has diminished as the profit margins on practices have remained level at best or in many cases been reduced. The lump sum of money available to dentists when they retire is not enough money to live comfortably for a lifetime. There are no pensions in dentistry so dentists are working many years beyond the average retirement age for other industries. Not because they want to but because they have to.
Younger buyer dentists have already run up so much debt attending a dental school they need high paying jobs just to pay back their loans. Many are financially strapped so to take on even more debt to purchase a practice is usually scary and sometimes not financially possible as banks will not lend them money beyond their cash flow requirements. A practice that needs a sizable investment to remodel and update and has lower profit margins every year is not going to pass the underwriters scrutiny at the banks. Dentistry has serious financial difficulties as yesterday’s business model is no longer working. But, by working together we can make things work in our favor.

Seller Only Broker Commissions with US Dental Practices

We can not change what is going on in the dentistry marketplace. However, we can work to bring down the costs associated with practice transitions. When we started this company the first thing we did was eliminate charging buyers a fee. In the NYC area, the majority of dental practice brokers are paid by both Buyer and Seller. Buyers are paying as much as 5% commission to the brokers ON TOP of the money paid to the brokers by the Sellers. We did this by not only eliminating the Buyer fees so we represent interests of the Sellers entirely while be honest with our Buyers

More Like This

Total Blog Activity

Total Bloggers
Total Blog Posts
Total Podcasts
Total Videos


Townie Perks

Townie® Poll

Do you allow parents into the operatory?

Site Help

Sally Gross, Member Services
Phone: +1-480-445-9710

Follow Dentaltown

Mobile App



9633 S. 48th Street Suite 200 • Phoenix, AZ 85044 · Phone: +1-480-598-0001 · Fax: +1-480-598-3450
©1999-2019 Dentaltown, L.L.C., a division of Farran Media, L.L.C. · All Rights Reserved