AFTCO

Practice Values Are At An All-Time High!

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 a dental practice in this economic environment. The typical approach of presenting the practice to numerous purchaser candidates without regard to suitability will create an illusion that purchasers have too many choices and they can just pick and choose any practice opportunity they want. 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 the best purchaser candidate would be for that practice. If you try to sell the practice to the wrong purchaser, then the purchase price becomes the primary focus by the purchaser rather than the uniqueness of the practice opportunity. If the purchase price becomes the primary focus, then this leads to prolonged negotiations, injured pride, hurt feelings and both parties feeling that their needs were compromised at best, and this is a lousy way to sell a practice.

It’s always been a “buyers market” for practices involved in estate sales or by disabled sellers because time is critical and that always works in the buyers favor and they will use it to their advantage every time. Rural practices in hard-to-sell areas are and have always been at the mercy of the occasional buyer, and as the economy tanks, the economic risk of practicing dentistry in rural areas will pull down practice selling prices.

However, dental practices located in good areas, either in or near large metro areas and/or resort areas for example, do not suffer a shortage of buyers for their practices. There are still many more young dentists looking to locate a practice to buy where they can enjoy the social, cultural and educational benefits that big city life has to offer. The same rule applies to practices located in desirable resort areas that offer 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, and each one should be sold based on locating the best purchaser for that practice. Some financially challenged dental practices being sold would be better off being sold and merged into nearby existing dental practices because of the economy of scale that results from a practice merger. The profitability to the purchaser who merges the practice is so great that price is not the driving issue.

Any practice broker who tells you that there are more sellers than purchasers is only saying that they do not take the time to educate their purchasers on the real, long-term advantages of buying a dental practice (and in this case, your practice). They allow their purchasers to focus on the purchase price alone and this results 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 the seller will end up settling on a much lower selling price (justified by the broker insisting that it is a “buyers market” rather than the result of an incompetent service).

Yes, practice values are at an all-time high if the sale is handled correctly and the right purchaser is located. If you would like to realize the full, uncompromised value of your dental practice then call AFTCO today at 1-800-232-3826 or visit our website at www.aftco.net. It’s time to call AFTCO!

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