NAPB Oregon Washington Dental Practice Broker - Omni Practice Group

Selling Your Dental Practice

By Rod Johnston, MBA, CMA of Omni Practice Group

Every day, dental practice brokers field questions from dentists asking about their dental practice transition or their dental practice for sale. With the economy improving, we’re seeing an increase in interest from dentists thinking that retirement may now be more within reach. While our job is to facilitate the sale of dental practices, we don’t always recommend that option without considering numerous factors bout the seller’s individual situation and goals. Our job is to give existing and potential practice transition clients the best possible advice and tools to make that decision.  Here are a few points to consider when thinking of a practice transition:

Consult your financial advisor or CPA – Can you afford to retire or cutback?  What does your portfolio look like?  What income do you need to live off of for the rest of your life? You need to go into this decision with your eyes wide open and all the facts at hand.

Get a Dental Practice Appraisal – If you’re thinking about a transition, you need to know what your practice is worth. In other words, you need an expert dental practice valuation.  A rule of thumb will give you a ballpark estimate, but may not be accurate.  Have an NAPB professional appraise your dental practice for sale.

Consult your Tax Accountant on the ramifications of a sale –Are you an S-Corp or a C-Corp? If you’re a C-Corp, you may want to figure out how to switch to an S-Corp. Do you have an employment agreement? You may want to terminate it.  Seek good tax advice and counsel prior to a transition.

How’s your practice health? Are your numbers looking good?  Still getting new patients?  Technology  up to date? Décor up to date, or do you still have olive green appliances in the staff room?   Consider a remodel if you’re 5 years or more away from retiring.  If it’s closer, consider a cheaper update like paint and carpet.

What is the capital gains outlook? Does uncertainty or any potential upcoming changes make it more attractive to sell sooner rather than later? This is another important subject to discuss with your tax accountant.

Do all “key” employees have non-compete agreements? If you have an associate, that is essential.

Clean up your accounts receivable. Do you have a lot of credit balances?  Are there a lot of accounts greater than 90 days old?  Clean it up now and you will reap the rewards both now and when it’s time to sell.

Do you own your building? Get an appraisal if you’re thinking of selling it as well.  Or, if not, get a market rate on what the lease should be. Dental practice brokers who are immersed in this everyday will be your best ally.

Start planning with your dental practice transition consultant well ahead of time. An NAPB dental practice broker can help get things in place prior to your transition. Providing you access to our nationwide Dental Practice Listings.

By doing a little homework now and getting the answers to these questions will position you for a successful practice transition, whether selling a dental practice or looking to buy a dental practice. You’ll not only eliminate stress and anxiety, but have a more successful outcome when you do decide to do a practice transition or practice sale and seek retirement.


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McLerran & Associates Dental Practice Brokers Texas Austin Houston

What NAPB Can Do for Your Dental Practice

By Brannon Moncrief of McLerran & Associates

FACT: A dental practice is typically the doctor’s most valuable and prized possession.

FACT: A dentist will typically sell a dental practice only once during his or her professional career.

Considering these facts, it’s not surprising that many dentists entrust the responsibility of selling their practices to a professional who has the knowledge and experience to facilitate a successful transition … a member of the National Association of Practice Brokers. In my experience, these dentists typically receive a higher value for their practices, have a more amicable relationship with their buyers following the sale, and experience much less stress and anxiety during the closing process than their counterparts who try the “do it yourself” approach.

Selling a dental practice is not like selling a vehicle… it is a complicated process which extends far beyond simply finding a buyer and closing on the sale. While some practice owners may be able to identify a buyer who is interested in purchasing their practice with little difficulty, getting from that point to the closing table is the most challenging component of a dental practice sale. Determining the market value of the practice, finding the right buyer, negotiating the purchase price, drafting the asset purchase agreement, formulating the transition plan, negotiating the lease assignment, and obtaining practice financing are just a few of the key areas where a potential practice sale can be derailed and the experience, expertise, and guidance of a dental practice broker can prove to be invaluable.

Doctors who are preparing to sell a dental practice often ask us what our role in the process will entail. Here are the primary responsibilities of an NAPB dental practice broker:

  • Identify and accomplish the seller’s goals for the transition – Every doctor and practice is unique so it is imperative for the dental practice broker to spend the time to understand the seller’s individual situation and goals and formulate a dental transition strategy to meet their needs.
  • Solely represent the dental practice seller’s best interest during the transition process. Beware of practice brokers who offer “dual representation”, as it is impossible to represent the best interests of both the buyer and seller simultaneously.
  • Complete an expert dental practice valuation to determine a fair market value for the practice, maximize the value the seller receives at closing, and be able to support and articulate the value to interested buyers and their advisors.
  • Construct a detailed marketing profile and cash flow analysis for the seller’s practice, including all pertinent information that potential buyers and their advisors will need in order to evaluate the office.
  • Confidentially market the practice to qualified buyers and advertise the practice on a local, state, and national level via the web, print ads, seminars, trade shows, etc. It is critical that all potential buyers are required to sign a Confidentiality Agreement prior to receiving any information on the seller’s practice.
  • Handle all inquiries from potential buyers regarding the practice, including conversations, email correspondence, and showing the office after business hours.
  • Dental practice brokers serve as a buffer between the buyer and seller throughout the process (particularly during price and contract negotiations) to preserve the goodwill of the practice and relationship between the parties.
  • Provide draft contracts including the Letter of Intent and Asset Purchase Agreement.
  • Assist the buyer with securing practice financing.

As you can see, dental practice brokers play a vital role in the dental practice transition process. When it’s time to start planning the sale of your practice, an NAPB dental practice broker can save time, increase value and eliminate unnecessary stress. Please contact us for a free dental practice transition consultation.


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NAPB Oregon Washington Dental Practice Broker - Omni Practice Group

Finding the Right Dental Practice Loan Services

By Rod Johnston, MBA, CMA of Omni Practice Group

There is good news on the dental practice transition front. The financial climate for dental practice loan services is improving, making it easier for dentists to buy a dental practice or when selling a dental practice.

Obtaining dental practice financing can be a huge obstacle to the smooth transition of a practice from one dentist to another.  Getting smart advice and guidance from a member of the National Association of Practice Brokers can facilitate making this important piece of the puzzle fit. NAPB dental practice brokers are constantly on top of the lending situation in their market areas, and can offer invaluable advice that will save time and money for all involved.

A couple of years ago, in 2010, banks that financed dental practice buyers tightened their credit requirements.  They began requiring dentists be out of school at least two years, and they would only finance up to 80% of the last 12 months’ production. In some cases they would require the seller take a note back for part of the loan.  In addition, they would absolutely not finance new dental school graduates and many would not consider lending to a dental practice start-up.  Rates were up around 7% or higher.

It was a rough year for sellers looking to do a dental practice transition or sale and equally tough on buyers looking to get financing. Dental practice sales were completely in the tank. Thankfully, those conditions have changed.

Fast forward to the present: bank rates are as low as 5.25% and most around 5.75% to 6%.  Many financial institutions will finance up to 85% of a dental practice’s last 12 months production, and typically no longer require the seller to take a note back.  They will even finance dental real estate purchases if the real estate is available at an attractive rate.  If you’re in the market, and think you can’t buy a practice or sell your dental practice because banks are not financing dental practice sales, think again.

Banks are back on the field of play and ready to loan money so get in the game! The National Association of Practice Brokers (NAPB) have extensive experience helping secure dental practice financing, along with established relationships with both national and regional lenders.  They can help source, evaluate and execute the best lending solution for your individual needs.

NAPB dental practice brokers are consultants, CPAs or attorneys with an average of 20 years of industry experience. They’re proven professionals who have executed every kind of situation: associate to partnership agreements, retirement transitions, relocations, and complex real estate sales and leasing arrangements.

Contact NAPB dental practice broker members in your area to discuss your personal situation and goals and get an up-to-the-minute picture of your local market.


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The first steps to buying or selling a dental practice

If you are a dental professional who has a dental practice for sale, or if you would like to buy a dental practice, your first step should be to contact the NAPB. The professional dental practice transition specialists at NAPB will capably guide you through the process step-by-step and provide you with excellent dental practice transition services.

The National Association of Practice Brokers exists to bring qualified dental practice buyers together with dental practice sellers in order to create a successful and profitable dental transition experience.

Learn About Partnering with NAPB Dental Practice Brokers

For more information on how to sell a dental practice, how to buy a dental practice, or the dental practice broker services provided by the practice brokers of NAPB, contact our office today to make an appointment for a free dental transition consultation. Please check our comprehensive dental practice listings page for lists of fully vetted dental practices for sale.


NAPB | National Association of Practice BrokersDENTAL PRACTICE BROKERS

Dental Practice Transitions Selling a Dental Practice
Dental Practice Valuation Dental Practices For Sale

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