Common Mistakes in Dental Practice Transitions | Dental Business For Sale
Dental Practice Sales & Transitions
Transitioning to dental practice ownership can be stressful for both the buyer and the seller they are purchasing from. Selling a practice can produce emotional hardship as there is a lot of time and effort that goes into building a business from the ground up. Relationships are formed with team members and patients, and oftentimes a seller has trouble knowing that their career may be coming to an end. We’ve come up with a few common mistakes that occur within dental practice transitions and how to avoid them.
Mistake #1: The Seller is not Emotionally Ready
Sometimes a seller will think that they are ready to sell their practice, but they are still too emotionally invested. They may ask for a minimum guaranteed salary or write in the contract that they are to remain employed by the practice. A few questions to ask as a buyer to help avoid this situation are:
- What are the seller’s plans after the sale?
- Do they want to continue to practice dentistry?
- Why are they retiring?
Mistake #2: The Seller is not Financially Ready
It is crucial that a seller be financially ready to sell their practice, with a retirement plan and sufficient savings in place. Occasionally a seller will list a practice and begin to navigate the selling process without making sure that finances have been evaluated. To avoid this, before you look too much into a practice, be sure to ask if the seller has consulted with their CPA or financial advisor. Determining the seller’s financial readiness beforehand will help save you a lot of stress in the long run.
Mistake #3: Trying to Transition without Representation
When working as an associate, the owner dentist may try to convince you that things can be done without legal representation. They may give you their word, or promise things, and try to get you to save money by doing the sale without a broker, attorney or CPA. Avoid doing this at all costs as it is never a good idea. You may end up paying more in these situations and it is not worth it. Always hire someone to represent you in the transition rather than trying to do it independently.
These common mistakes can easily be avoided by asking the right questions before you get too far into the transaction process. By doing your research ahead of time, it will help you to avoid a lot of the stress that comes along with these transactions. Let a professional guide you through this process to help prevent you from making these errors, and ultimately save you money in the long run. Contact our brokerage firm today for a consultation.