Practice owners need to be wary of the bombardment of calls from DSOs and young purchasers offering to buy your practice for a fair price. Anytime you are dealing directly with the buyer without representation of an experienced transition consultant, you are risking thousands and possibly millions of dollars. 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 current chaotic environment.

Never in history, have sellers had so many options available to them as they currently do today. DSOs are very aggressive in their pricing, enough to be able to overbid an individual doctor, but savvy enough not to offer their highest price to an uneducated/unrepresented seller. This has made it difficult for the individual doctor to find and acquire a quality practice and thus making them more aggressive in their efforts. Sadly, most of the individual doctors are relying on a buyer advocates or information that they have researched on the net to set their valuation parameters. Buyer advocates will always advise a purchaser the practice is worth less than the true market value. Most buyer advocates also offer other services (ie. accounting, management, financial planning) for after the individual doctor acquires the practice and they want to secure that future relationship with the doctor.
Each dental practice is unique and needs to be studied and analyzed to determine who would be the best purchaser candidate for that practice. You need to be able to compare all the DSOs in your market, understand their valuation process and the post-sale requirements. For many sellers the post-sale requirements make them lean towards an individual doctor but at what cost? For the sellers willing to accept less value to avoid post-sale requirements of themselves, how much less is necessary? If you listen to a purchaser and their advocates it is way more less than necessary.

It is a seller's market for dental practices, especially those located in strong demand areas. Practices located near large metro areas and resort areas, for example, do not suffer a shortage of buyers and often see purchase prices exceeding 90% of gross revenues. 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.

Any DSO, individual doctor or 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 then accept 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!