Dental Brokers And Marketing A Practice For Sale
If you’re thinking about selling your dental practice so you can retire or bringing on a partner or even considering making a career move like affiliatiating with a private-equity backed dental service organization (DSO), you may be tempted to handle everything yourself. If you’ve successfully managed other large transactions in the past, such as the sale of a home, you may believe selling a practice is similar. The truth is, selling a dental practice is much more complex than selling a home. And unlike listing a home on Zillow, successfully marketing a dental practice — especially to an affiliate group, investor or DSO — requires specific skills, contacts and resources.
A dental practice is a business, so there are many additional factors involved in the sale, including determining the value of the practice and marketing it to the right prospective buyers. That’s why the American Dental Association recommends interviewing and retaining a broker with experience in selling dental practices. The right broker can help you with valuation and also assist with various aspects of marketing, like promoting and listing your practice and handling in-person and virtual tours, all while maintaining confidentially with signed non-disclosure agreements (NDAs).
[Call out: The American Dental Association recommends interviewing and retaining a broker with experience in selling dental practices.]
Selling a practice can take 150 hours or more. Meanwhile, the dentist who is selling the practice needs to focus on continuing to provide high-quality dental care in order to maintain practice value during the transition. That’s why when it is time to sell your practice, it’s in your best interest to hire experienced dental practice brokers – like our team of experts at Professional Transition Strategies (PTS) – to manage the complex tasks involved in the sale, including marketing. That way, you can focus on patient care and let us deal with determining practice value, attracting buyers or affiliates via marketing and managing offers and putting your practice in a more competitive environment.
Here, we take a closer look at dental brokers and examine what it takes to market a dental practice for sale, sharing the insight of our skilled team. We’ll cover the following topics:
- The various roles dental practice brokers play in buying and selling practices
- How dental practice brokers market practices for sale
- The questions a practice seller should ask before engaging a broker
- How a broker with the right experience can expand options, improve a seller’s negotiating position and help sellers secure the return they deserve
What Do Dental Practice Brokers Do?
A dental practice broker can help you get the most value from the sale of your practice, which will likely be one of the biggest financial transactions you make in your lifetime. A broker can help by showcasing different strategies and bringing multiple offers to the table for you to explore. But dental brokers can play various roles in the different types of transactions. While other professionals, including attorneys, realtors and certified public accountants, think they can handle practice transitions, it’s good to know what services dental brokers offer before making a decision about whom to work with when it’s time to list your practice.
We serve as a seller’s agent with dentists who are affiliating with another practice or selling their practice to a dental service organization (DSO). We also do more than that; our team works as a transaction broker with dentists who want to sell their practice to an individual buyer. Depending on the type of transaction, we handle details like practice valuation, marketing, managing inquiries, ensuring confidentiality is maintained, handling communication between the buyers and sellers. Coordinating transactions between the two parties, providing disclosure, confidentiality, accounting and reasonable care services are part of our specialty.
We ensure a smooth transition by helping the parties understand the advantages of various strategies and serving as a liaison, assisting with negotiations and making sure each stage of the transition proceeds smoothly, from the opening offer to the completed sale.
How Do Dental Brokers Market a Dental Practice?
Another advantage of working with a dental broker is that they may be able to play matchmaker between dentists who are looking to buy a practice and those who are ready to sell a dental practice, whether to affiliate with a group or sell to another individual dentist. We have an inventory of dental practices for sale, and work with buyers who are looking to invest in or purchase dental practices. That way, we have contacts on both sides of potential transactions.
If you’re selling a dental practice, you’ll want to work with a team that has deep dental practice marketing expertise. It’s a good idea to ask questions about a prospective dental broker partner’s experience with practice sales and get details on their marketing approach. It’s also important to find a dental broker who takes an active marketing approach that ensures your practice is seen by dentists and investors looking for an opportunity in your area while also maintaining confidentiality since news of a sale can impact your business.
The right dental broker can help you balance practice visibility with confidentiality and find an ideal buyer for your practice. Dental brokerage firms like us ensure confidentiality while marketing your practice by securing a non-disclosure agreement prior to providing potential buyers with identifying information about you and your dental practice.
[Call out: The right dental broker can help you balance practice visibility with confidentiality and find an ideal buyer for your practice.]
A comprehensive prospectus can be a powerful marketing tool that also gives you critical information on the value of your practice. A prospectus is a document that is typically around 20-pages long that gives a 30,000-foot overview of a practice and communicates practice value using the metrics relevant to your buyer group and dental practice specialty. It provides an overview for buyers so they can understand the practice value from the purchaser’s perspective.
When you work with the experienced dental brokers at PTS, you can also expect consulting services that help you get a better understanding of your dental practice value so that you can review all of your options in light of that information. For example, if the appraisal comes in lower than you expected, your professional dental practice broker can review options with you to increase practice value prior to a sale, as recommended on the Academy of General Dentistry site.
It’s not uncommon for dentists who are ready to retire or move on to another phase of their career to experience revenue decline prior to making the decision to sell. If left unaddressed, that can have a significant impact on the value of the practice. But we consult with you on strategies to boost practice value before listing it for sale. Here’ a list of some of the strategies practice owners can consider:
- Increase marketing outreach via advertising, expanding professional contacts through networking, guerilla marketing, etc.
- Cut expenses, taking care not to use cost-cutting measures that might affect patients or revenue-generating capacity.
- Upgrade the facility — with the understanding that you won’t get a dollar-for-dollar return.
One of the most important factors to keep in mind when researching dental brokers is to find a partner with industry experience. A dental broker who understands the market and who has helped other dentists successfully make a transition is the best candidate for the job. Make sure your prospective dental practice broker has expertise in dental practice appraisals, the competition in your area, dental practice marketing, real estate, legal and accounting work and selling strategies.
Only a dental practice broker with this skillset can offer complete transition services. We offer the full array of practice transition services and take a proactive approach to finding the right fit. This ensures that you leave your patients and staff in good hands while also minimizing the time your practice is listed by finding the right match.
Our team has extensive DSO experience and contacts, which makes us unique in the dental brokerage space. Combined with our practice appraisal expertise and deep marketplace knowledge, we have unmatched insight into private equity investment decision-making and DSO resources. This makes us the ideal team to help you fully understand your options and recommend strategies to strengthen your negotiating position.
Why Sellers Shouldn’t Go It Alone
The first step in a successful sale is an accurate appraisal, and the methods brokers use vary . Look for a dental practice broker with the expertise to tailor your valuation method to your objectives and the in-house skillset to handle dental practice marketing, accounting, practice consulting and investment and insurance advice, so that you get an accurate view of your current status and identify and address any gaps that need to be filled before a sale is completed.
Selling a dental practice is an enormously consequential decision that has significant professional, financial and emotional implications. That’s why dentists who’ve made the decision to sell their practice shouldn’t go it alone; a dental practice broker brings the objectivity, data, marketing skills and expertise needed to achieve the best outcome. Like a great dentist does for a patient, we make a necessary and complex process as easy and painless as possible, so don’t go it alone.
Whether you are selling your practice to an individual buyer, looking for an opportunity to affiliate with a group or sell 100% your practice to a DSO, the decision you make about working with a dental broker is critical. Because of our contacts and depth of experience, we present options that other dental brokers can’t access and develop strategies that improve your competitive position. So, when it’s time to sell your practice, talk with us to make sure you get the transition options and support you deserve.