Do I need to pay a broker if I bring the buyer?
Selling your practice is typically a once-in-a-lifetime event. With its extraordinary occurrence, sellers should assume a steep learning curve as they navigate such a cumulative and detailed process.
The operations of your daily work may be your expertise, but the process of selling tends to surface surprisingly vulnerable emotions no matter how well you know your practice. If you are beginning the process and thinking you will simply sell to your associates, pause and speak to a health care broker to explore other options. Learning more in this scenario will only be to your benefit.
When clients come to us believing that they already know that they would like to sell to their associates, we offer the following four considerations:
1. Get an appraisal of your practice’s value before hosting any discussions about the sale with your associates.
A third-party appraisal offers a critical reference point for buying and selling dental practices because it offers a market value of your practice. Even if you are determined to sell to associates, pursue an unbiased opinion to set you and your buyer up for a healthy and transparent process.
2. Remember that your associates know the details, for better or for worse.
Value-add: When clients sell to associates, we have observed that the perspective can be more intimate than is helpful. An imperfect analogy is if you were allowed to live in a home for five to ten years before purchasing it. You would know what railings had a wobble, what plumbing needed updates, and if there were particularly noisy neighbors.
Associates have been on your team with a common goal of building up the practice over the years. They know and remember the strengths as well as the inevitable weaknesses of the practice before you even announce the sale.
3. Associates have the leverage in an in-house deal.
Related to the previous point, a relationship between buyer and seller complicates the deal because it becomes less objective. Associates have often contributed to the growth and subsequent value of the practice. Unspoken expectations can become difficult to sort through and navigate if the market value is ignored or undetermined.
4. Finding a buyer and closing a deal are not one in the same. Identifying a buyer is not always difficult, but closing a deal requires a distinctively detailed process.
Health care brokers exist to help you find the best buyer, as well as to help you close the deal. Bringing a buyer to the deal table may seem like half the job, but the truth is that it often means a more complicated and emotional sale. There is a distinct value-add in bringing in an expert for guidance through this momentous process.
As experts in buying and selling dental practices, Practice Transitions Group urges you to consider how selling to an associate and not exploring other options might leave you more exposed than you expect. When you set the intention to sell your practice, it is rational to go into the process with the hopes of handing the keys over to a practitioner whom you know and believe will do a good job. At the same time, our experience across transactions tells us that the best deals happen when clients remain open to discovering the ideal scenario for selling and closing a deal.