Planning the sale of your dental practice should begin well before you are ready to sell. Start by understanding your practice’s value, organizing your financial records, considering potential tax implications, reviewing your office lease, planning your transition, and deciding how to handle staff. Early preparation can help make the sale process smoother, reduce unexpected issues, and put you in a stronger position when negotiating with a buyer.
Introduction
Selling a dental practice is one of the biggest financial decisions a dentist will ever make. It is not just a transaction or business decision. It impacts many people in your daily life—patients, staff, and even relationships with lab techs. As such, it deserves the same level of planning that went into building the practice in the first place.
Regardless of how far into the future your retirement or relocation may be, those who walk away with the best outcomes are the ones who plan in advance. Here are the areas we encourage every dentist to consider:
Get to Know the Market Conditions
Before a practice ever hits the market, it is worth understanding what it is actually worth. Valuation is not just about collections. Overhead, payer mix, equipment age, lease terms, and staff all factor into the valuation.
While you do not need a formal appraisal, the best place to start is to simply call us—ask questions, pick our brain (you don’t even need to provide your identity). Get informed.
Get Your Financials in Order
The sale process is paper-intensive. Buyers, their accountants, and lenders will want clean, organized financial records. Profit and loss statements, tax returns, copies of 1099s received, and staff information should all be at your fingertips and ready to deliver.
Organized financials allow us to move through the process seamlessly and provide prompt feedback and value assessments. And, as might be expected, practices with organized financial information tend to move through due diligence faster and with greater buyer confidence.
Think About Taxes Early, Not at Closing
Talk to us. There IS tax planning that occurs—and here, there can be a GREAT difference depending on the broker selected. Creativity, accounting knowledge, and a focus on the NET sale price, rather than just the selling price, distinguish our firm from others.
We will provide suggestions that even your accountant may need to look up!
Office Lease & Obligations
Your office lease is a debt. How it is transferred to the buyer makes a huge difference.
Lou Bermudez is an EXPERT lease negotiator. Having access to contract attorneys and focusing on the fine print can make all the difference in potentially being released from future liability.
So, dust off your lease and deliver it to us for an assessment of your obligations prior to considering a sale!
Transition
Decide on your preferred transition plan before listing the practice for sale. Whether you want to continue working—and, if so, for how many days, for how long, and at what pay rate—should be planned in advance and included in the overall package presented to the buyer.
Staffing Considerations
Your staff has likely been part of the practice’s success for years. Deciding how you plan their transition is another issue to consider prior to the sale. Will you tell them upfront or wait until escrow? How much notice should you provide? These are all topics that should be discussed upfront.
As you can see, the sale of a practice is not an isolated, singular decision, but rather a series of well-planned, methodically discussed, and agreed-upon topics.
Hiring a professional such as Mr. Bermudez not only ensures that all sale matters are openly discussed but also helps protect your interests through negotiation, due diligence, and closing.
In closing, let us invite you to call or reach out to us at any time in the process—you are only a phone call or text away from securing free advice from one of the most experienced dental practice brokers in the country!