Don’t listen to the doomsayers; dental practices are selling for higher prices now than ever. It’s all a matter of knowing how to market your dental practice in this economic environment. The typical approach of presenting the practice to numerous purchasers without regard to suitability will create an illusion of having too many choices. The truth is, there is the right purchaser for every practice, and there is the right practice for every purchaser. Selling your practice to the right purchaser is the key to getting the full value for your practice.
Each dental practice is unique and needs to be studied and analyzed to determine who would be the best purchaser candidate for that practice. If you try to sell the practice to the wrong purchaser, then the purchase price becomes the primary focus rather than the uniqueness of the practice opportunity. It leads to prolonged negotiations, wounded pride, hurt feelings, and both parties feeling that their needs were compromised; and this is a lousy way to sell a practice.
It has always been a “buyers market” for practices involved in estate sales or by disabled sellers because of the critical time factor. Dental practices located in hard-to-sell rural areas will always sell for a lower price.
However, it's a seller's market for dental practices located in strong demand areas. Practices located near large metro areas and/or resort areas, for example, do not suffer a shortage of buyers. There are still many more purchasers looking to buy a practice in an area that offers the social, cultural and educational benefits of big city life. The same rule applies to practices located in desirable resort areas that provide a more relaxed practice environment and access to all the benefits of a resort lifestyle.
There are good practices, and there are those that are not so good. These practices should be sold to the best purchaser for that practice. Some low-grossing, financially challenged dental practices would be better off being sold and merged into a nearby dental practice instead of being sold to a new dentist. The economy of scale and increased profitability that results from a practice merger provides the motivation to buy at that practice for a higher price.
Any practice broker who tells you that there are more sellers than purchasers is only expressing their ignorance of the marketplace. These brokers allow their purchasers to focus on the purchase price alone resulting in many practices being sold for much less than their real fair market value. Discount brokers will always quote a lower commission rate to get a practice listed, and then the seller will end up accepting a much lower selling price because the broker claims it is a buyers market, which is just not true.
Yes, practice values are at an all-time high if the sale is handled correctly and sold to the right purchaser. If you would like to sell your practice for its full, uncompromised value, then call AFTCO today at 1-800-232-3826 or visit our website at www.AFTCO.net. It’s time to call AFTCO!