Selling a dental practice is an exciting process, but you need to make many important decisions before you complete the sale. Similar to building a practice, the best approach is to create and follow an organized strategy designed to help you achieve your goals. With that said, every dental practice sale is different, so you need to tailor your approach based on the goals financially you want to achieve.

Selling a dental practice

With the above in mind, attracting prospective buyers, setting realistic expectations, and ensuring an overall good deal is not always straightforward.

In this article, we’ll go over everything you need to know about dental practice sales. We’ll cover common seller questions, go over the cost of selling a dental office, and provide a simple checklist to ensure a smooth transition.

How to Sell a Dental Practice: Sellers’ Questions

It’s common to have questions while learning how to sell a dental practice, even if it’s not your first time. Every dental office is unique, so besides determining the actual value of your practice, you also need to ensure that the deal works in your best interest.

If you haven’t already, make sure to organize all of your practice’s documents, like accounts receivable, cash flow documentation, gross revenue for the previous five to ten years, and anything else that can be of value from the buyer’s perspective.

Here are a few answers to common questions you may have.

How Long Do Dental Practices Take to Sell?

The single most common question that dentists ask when interested in selling their practice is “how long will it take to sell my business?” but the answer to this varies tremendously.

In some cases, it may take up to six months or more to sell your practice. This varies depending on the location, size, revenue, market, asking price, and other variables.

Dental practices usually sell for a significant amount of money, so it’s not surprising that it may take some time to sell this type of business. If you want to make as much money as possible during your sale, you need to be patient, find the right buyer, and wait for the ideal time to sell. If not, you may end up taking a lower price than the market value.

How Much Can You Sell a Dental Practice For?

Similar to the timeframe question, the actual amount of money you can sell your practice for varies based on variables like your location, revenue, and business size.

Additionally, you also have to consider debts, equipment, and existing agreements. This includes any subscriptions with a dental service organization and dental program platforms like Membersy. To find out more about Membersy and how it can help you grow your practice before selling, contact us today or sign up and register now.

Dental practice sales can be complex to maneuver from this point forward. If you’re having a hard time determining the value of your office, hiring an appraiser and organizing a practice valuation can simplify the process for you.

Is There a Best Time to Sell Your Dental Practice?

Yes, there is definitely a “best time” to sell your dental business. But, as a dental practice owner, it’s also your job to figure out when this time is.

Rather than thinking about seasonality, consider your sale in the same way qualified buyers do. In other words, look at your business as an investment. Companies that have minimal debt, growing revenue, and high upside potential will sell faster.

Best Time to Sell Your Dental Practice?

Once you analyze this part, you can start thinking about when to promote your business based on the tax ramifications it can have. Additionally, global events, like the COVID pandemic, can also influence the price of your practice as well as the offers you get.

What’s the Cost to Sell A Dental Practice?

Although exciting, the sale of your practice will also incur some expenses. Therefore, it’s best to keep these in mind before you decide to sell your dental practice in the first place.

Besides the cost of hiring an appraiser to value your business, the cost of selling a dental care business also includes:

  • Legal fees
  • Sales commission
  • Business consulting services
  • Real estate fees (if you own the building)

Selling Your Dental Practice: How to Do It Right

As we mentioned earlier, you need to create a tailored strategy to help you complete your sale successfully. With that said, there are a few general steps you’ll likely have to take in order to complete the transaction.

Let’s take a look at our selling a dental practice checklist.

Create an Exit Plan

In addition to providing the resources the incoming dentist needs to run the business, you should also take the time to create an exit plan. You should notify your team and patients about the switch, as well as any other stakeholders that are important to your business.

Determine the Cost of Your Practice

We’ve covered this briefly, but it’s essential to get an accurate estimate of the value of your dental practice. The rest of your sale will depend on this value, so make sure to work with a valuator that specializes in the dental industry.

Hire Reliable Advisors

Whether you’re selling your practice to a single practitioner or to a partnership, it’s also important to work with a financial advisor. As a matter of fact, many practice owners build a team of specialists to help attract qualified buyers and accelerate the selling process.

Should Your Practice Be Sold Along With Your Building?

Practitioners that own their office building have two options, which are to sell the property with the practice or to lease it to the new owner.

female dentist preparing medical tools on dentist table

Including the building increases the total sale price and eliminates any responsibility to the new practice owner. The lease, on the other hand, provides a steady revenue income over a prolonged period of time, but it represents more responsibility and bigger tax consequences later on.

Steps to Take Before Selling Your Dental Practice

Dental practices usually have a high price tag, so selling this type of business can become a complicated process. But, there are a few steps you can take before you start the selling process in order to accelerate it and get faster results.

For instance, you can:

1. Improve the Office Aesthetics

First impressions only occur once, so you need to make sure that your practice is immaculate before potential buyers start asking to see your office.

2. Conduct Due Diligence

Conducting due diligence on your own business early on will help you reduce waiting times and increase the chances of buyers taking the leap.

3. Communicate Your Business and Patient Philosophies

The more prospective buyers understand your practice, the more likely you are to find the right fit. Rather than selling your practice as a blank slate, consider communicating your business and patient philosophies to the nest owner. This will help ensure that the new owner meets your patient and employee expectations or communicates changes accordingly.

Conclusion

Completing the sale of your dental practice may take time. But, with the right team of advisors, you should be able to achieve all your financial goals and find potential buyers relatively quickly.

If you want to learn more about the benefits of Members, contact our team today.