What matters in your selling agent?
Do I need to hire a local broker? It depends on who you are selling your practice to.
If you’re selling to Dental Service Organizations (DSO), you don’t need a local broker. The buyers are most likely not going to be local, so having somebody local to represent you does not matter. At Practice Transitions Group, we have closed deals across the country, from California to New Jersey, without ever meeting the doctors in person.
Instead of worrying about location, here are two things that matter more for your broker in a sale to DSO than them being local:
- Your broker understands the business, understands the terms, and understands your value. They should be able to both underwrite the deal and get the best possible deal, pushing the process along.
- Your broker has good relationships and knows the deal points. You want someone who has a national network and knows people all over the country. Their connections will ultimately influence the size and quality of the buyer pool.
On the other hand, if you’re participating in a doctor-to-doctor sale, the importance of having a local broker depends on your local market.
Here are a couple of reasons why a local broker might be helpful in this kind of sale:
- It helps if your broker knows the doctors in town looking for practices to purchase. A local broker will likely attend study clubs and know of associates who are looking to purchase a practice firsthand.
- In a bigger city with a robust network of practices, the pool of transaction activity and potential is greater. Having detailed knowledge from a local broker within these networks may be beneficial. In a smaller town, it becomes less important to have a local broker because it is more likely that the buyer will be from outside your local network.
- It may take longer if you choose to hire a broker who isn’t local. If you are not selling to a Dental Service Organization, corporate systems are not driving the process and timeline. Doctor-to-doctor sales require more customized practice transitions, which a high-quality, experienced local broker might be better suited to construct.
When considering whether or not you need to hire a local broker, think through what kind of partner you need for your deal type. A good broker will know whether or not they can add value to the sale of your practice once they understand what your goals may be. Pay attention to what your expectations are, and look for a representative who will make the long process a bit smoother for you and your team.