How to Properly Plan Selling a Dental Practice
You may have decided that you want to sell your dental practice for a variety of reasons. It could be that you have decided to simply retire or maybe you have spread yourself too thin by opening too many offices. Or you may think it is the “seller’s market” and now is the best time to sell your dental office, or you do not enjoy the business and management aspect of running a practice and have decided to focus on dentistry, just seeing patients, and becoming an employee. Different dentists sell their practices for different reasons, but regardless of their reasons, they should all take certain steps to properly plan their move for a successful transition and to maximize their selling price.
As experienced dental practice transition lawyers, we have represented dentists and their dental practices in selling their dental practices and based on these experiences we negotiate skillfully on your behalf and provide you with top legal representation based on great understanding of dental laws. The following are some recommendations if you intend to sell your practice in foreseeable future:
1. Set Your Goals
Setting your goals go hand-in-hand with your reasons for selling your dental practice. Although your ultimate goal is to sell your dental practice, you should focus on what you want to achieve by selling your dental practice. You may be planning for your retirement and the purchase price from selling your dental practice could add to your retirement funds. Or being unable to run too many offices, you might have decided to sell the practice to reduce the time required to manage all the different offices. Some dentists may have grown tired of the business and management aspect of running dental practices and want to work as an employee.
The various terms of your contract may vary depending on your reason(s) to sell your dental practice. For example, the restrictive covenants in your purchase agreement should be more robustly negotiated if you maintain other offices or still planning on practicing than if you are retiring. Our experienced dental practice transition lawyers will negotiate and devise a contract that will suit your personal situation and help you achieve your goals.
After going through this exercise, it will be much easier for you to decide the parameters of your contract which in turn will help your dental transition attorney in drafting a contract for you. It will also help you to look for buyers who are the best candidates for purchasing your practice.
The listing and selling price depend on multiple factors such as your practice’s gross revenues, net profits, your business expenses, the comps in the market, etc. You should also compare your current income from the practice with the valuation of your practice to see if the purchase price will help you reach your goals.
Also, as an employer, you may have a concern about the future of your employees after you sell your practice. You can alleviate those concerns by communicating with your listing agent and/or potential buyers to see if the buyer is willing to re-hire most, if not all your employees, for a foreseeable future. And such terms can be included in your purchase agreement. The good news is that most buyers not only welcome that, but they insist on keeping almost all the employees because they want the patients to feel comfortable after the Closing and keeping your current employees will go a long way to do that.
2. Get Help from an Attorney Who is Experienced in Dental Transitions
An attorney who is experienced in dental transitions can be immensely helpful in negotiating, drafting, and/or reviewing your contract and the over-all transaction. In today’s complicated and sophisticated market. most dentists opt to list their practice with a dental agent/broker. You will be hard pressed to find an agent/broker who will not require you to sign a contract with them before they list your practice. So, right off the bat you will be presented with a contract that is obviously eschewed in favor of the dental broker.
You would be wise to first have retained an attorney who will negotiate that contract on your behalf. More importantly, our experienced dental practice transition attorney will protect your legal interests and makes sure you get paid; otherwise, a buyer and/or their lawyer could present you with a contract that unreasonably chips away at the purchase price based on certain contingencies.
Worse yet, they may require you to do something unlawful that benefits the buyer. These requests are usually regarding billing, credentialing, and/or dealing with insurance companies post-closing. Knowing how to navigate these issues could make all the difference to your professional future and/or making sure you do not run afoul of various statutes and regulations that could have serious legal consequences.
3. Agents and Brokers
Unless you have already been approached by a colleague who is interested in purchasing your practice, you will likely end up hiring a dental agent to find a buyer for your practice. Assessment of the value of your practice, research about potential buyers as well as finding potential buyers will be handled by your dental agent.
For additional information please visit our website, Dental Medical Attorney. You can learn more about us, professional background, and practice areas here. And do not forget to check out our blog and FAQ pages for more information on related topics and the answers to your questions regarding dental transitions and our dental practice transition attorney.
Kamkari Law – Healthcare
Dental Practice Transition Attorney