Why More Buyers Means a Better Practice Transition and a Better Sale Price
For many dentists, selling their practice is one of the most significant decisions of their career. Yet, when it comes time to transition out, some practice owners unknowingly limit their buyer pool, and in doing so, reduce their chances of both maximizing the sale price and finding the ideal successor.
Here's why casting a wide net matters, and how certain common missteps can narrow the field in ways that may not be obvious.
1. Do-It-Yourself (DIY) Sales: Limiting by Design
Some dentists attempt to sell their practice independently, relying on a small circle of professional contacts, CE acquaintances, or word of mouth. While this approach may seem simple and cost-effective, it severely limits exposure. Connecting with one or two potential buyers is statistically unlikely to uncover the best-fit candidate from a pool that could include hundreds or even thousands of qualified buyers.
Without broad market exposure, significant marketing, and proper vetting, sellers risk leaving money on the table and possibly handing their life’s work to someone who may not align with their treatment philosophy or commitment to staff and patients.
2. Dual Representation: Conflicting Loyalties
Some national brokerage firms operate under a dual-agency model, representing both buyer and seller. In dental practice brokerage, dual representation creates similar ethical challenges as seen in the practice of law. A broker’s duty of loyalty and confidentiality to each party can come into conflict when information that benefits one side disadvantages the other. Savvy buyers frequently walk away from dual-agency situations, unwilling to risk a process that may favor the seller and lack objectivity. The result is discerning buyers may never have access to your practice information, resulting in a smaller buyer pool. To save embarrassment, a dual agent broker may not even disclose these inquiries to you.
3. Inexperienced Brokers: Hidden Risk
Everyone has to start somewhere, but a practice sale is not the place for on-the-job training. Some brokers tout impressive resumes in dental equipment sales or lending but lack actual deal experience. Worse, many aren’t even licensed to handle the lease or sale of the dental office, a key element in nearly all transitions. Sellers should look for brokers with specific credentials in dental practice sales, a strong reputation, and a track record of closing deals at or above market value.
Bottom Line: The more qualified buyers you attract, the greater your leverage in negotiations, and the more likely you are to find a successor who honors your legacy. Don’t let short-sighted choices limit your opportunities. When it's time to sell, make sure you're working with someone who can open every door, not just the most convenient ones.
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J. Robert “Bob” Brooks, CEPA, CBI
J. Robert “Bob” Brooks, CEPA, CBI, leads Practice Endeavors, an Ohio-based practice brokerage and dental realty company. His company provides practice owners with the tools they need to prepare well for life after practice ownership and to find the best price/best fit buyers for their seller clients. Bob was integral in starting the first of its kind dental practice broker credentialing for the International Business Brokers Association.