There are many steps involved in preparing a dental practice for sale and the sales process. The most important step in a successful sale and transition is advance planning. A year or two* before you plan to transition out of the practice is the ideal time to contact a transition specialist. This time allows issues to be addressed in advance and ensures that your practice is more marketable and more valuable when it is placed on the market. It is our goal to identify a financially, professionally, and personally compatible purchaser for your dental practice.
It is said that there are two big mistakes a doctor can make when it is time to sell their practice. The first one is to try and sell the practice themselves; most of the time valuing it well above what is fair and marketable. The second mistake is to sell your practice too late. This results in a less marketable and less valuable practice. As production declines, future practice value is lost. Both of these errors result in effort without the anticipated results. Avoid these mistakes by hiring a qualified broker to assist you in the transition process.
The negotiative brokering style provides the greatest protection for each party yet is very effective in bringing the parties together in friendly win-win sales. We require that each party utilize their own personal representation - attorney and accountant - to review each step of the process and recommend any modifications. We can recommend counsel and accountants to parties who do not have a current relationship, but in each case the counsel is retained by and solely responsible to their client, be it the seller or the purchaser. Greatest rewards are reaped when you take the time to utilize the expertise of one of our Transition Specialists.
*Specialty practices often require more time to sell due to the significantly smaller buyer pool. back to top
When marketing your practice to potential buyers, our style is comfortable and non-confrontational. There is no pressure or hype. We simply explain the facts and figures to clients so that they can make the most well informed decision in their own best interest.
Phase II Associates maintains a database of serious potential buyers that we have personally identified through our website and direct marketing efforts. Clients and prospects may be referred to us by word of mouth; others are contacted at local, state, and national conventions that we attend.
MANY OF OUR CLIENT’S PRACTICES SELL BEFORE THEY ARE LISTED!!! This is a huge benefit to dentists who are concerned about confidentiality and the potential negative impact of revealing their intention to sell their practice. back to top
The economic model used by Phase II Associates is also licensed by other leading practice transition specialists and even lenders who specialize in dental practice acquisition financing. The model is simple in concept. We compute how much a purchaser can afford to pay for a given practice after making a successful net income and paying the practice overhead expenses. The objective is to calculate how much a purchaser can afford to pay and be successful. This resultant figure is then compared to other practices that have sold and we compare the practice price/gross ratios to see that the subject practice is also within market comparable price ranges. This methodology has been accepted by accountants, lenders, and juries as being a rational, reproducible, and precise measure of price and value. back to top
Bringing on an associate at the right time can be a valuable addition to your practice. When it is set up as a step toward a time defined buy-out, it helps to maintain the referral sources and value of the practice at the time of transition. Our practice transitions team can help you choose an associate that is right for you. back to top
Many group practices are set up as partnerships. When looking to create a partnership, Phase II’s team of dentist brokers understands that creating a win-win scenario for both parties requires more than just creating a mutually beneficial financial and legal arrangement. Utilizing our extensive experience as dentists and brokers we have developed a unique facilitative process that helps dentists determine whether they are compatible before entering a partnership. Many of our clients have created long lasting, mutually beneficial partnerships as a result of our facilitation. back to top
We understand the process of growing a business and merging independent practices. Properly implemented, practice mergers provide a win-win scenario for both parties and are powerful tools for creating wealth. Phase II Associates understands the issues that are necessary in evaluating the feasibility of a practice merger, and we can assist in locating practices that qualify as exceptional merger candidates.
For Solo Practitioners
The death of a family member is perhaps the most painful experience anyone can endure…..
This is particularly true when a dentist dies. The unfortunate reality is that with the passing of a solo dentist, the timeliness of the practice sale is crucial in maintaining the practice value. Consider the following unique aspects of solo practices.
1. Unlike group dental practices that have predetermined buy/sell agreements, the solo practitioner has no predetermined buyer and must therefore sell his/her practice in the dental marketplace. The longer it takes to appraise, market, and sell the practice after the doctor’s passing, the more the practice’s value (and sale price) decreases.
2. If you are a specialist, there is little or no availability of specialist locum tennens to help maintain a specialty practice’s production or referral base.
The emergency nature of many specialty procedures requires a specialist’s immediate attention. Referring offices are unable to ask their emergency patients to wait on treatment while a transition occurs, and must refer them elsewhere. Over a very short period of time, the referral base will dwindle and the practice value will plummet.
3. Preparing a deceased doctors practice for sale can be a terrible burden for the grieving survivors who have no knowledge of what information to collect or where to find it. They feel helpless at this moment and don’t know where to turn for professional help. Confusion grows and ultimately rules the moment when rational thinking and decisiveness are essential to protect the significant and hard earned equity remaining in the deceased doctor’s practice. It is no surprise that many valuable practices of deceased dentists are unnecessarily sold at fire sale prices, if indeed they are sold at all!
Phase Two Associates offer the Practice Protection Program as a solution to the frustration, confusion and loss of value that traditionally occurs with the passing of a solo practitioner.
The Practice Protection Program is simple. The key is having an updated practice appraisal along with other pertinent documents and a designated practice broker’s contact information in a safe place that is known to your spouse and/or attorney. We will provide you with an easy to follow appraisal check list that identifies the documents we need to complete a thorough appraisal of your practice. Along with the checklist we will send an agreement authorizing us to sell the practice in the event of the doctor’s death. Once we have the necessary documents outlined in the checklist, Phase II associates will complete a thorough appraisal of your dental practice. Keeping the appraisal current is a simple matter of using yearly profit and loss statements and tax returns to update the document. This service can be done by Phase II Associates at a minimal cost. With a Practice Protection Plan in place, you and your loved ones will enjoy the peace of mind knowing that one of your most valuable assets, your practice’s value, is protected.
A small investment of your time today can pay tremendous dividends – potentially hundreds of thousands of dollars – for your family later. The Practice Protection Program is the easiest and most effective approach you can take to protect one of your most valuable assets. Contact Phase II Associates to receive your practice protection forms, and begin the process of protecting your practice and your family today. back to top