Planning to sell to your Associate? There might be opportunities you are missing!
Selling your dental practice to a willing Associate may seem like an ideal scenario, but the process is often more complex than it appears. Read our latest article to understand why the assistance of a third party is crucial to successfully complete the sale.
Opting to sell to trusted Associates is typically viewed as a less intricate and less stressful process than listing a practice for general sale. The buyer is already an integral part of the practice, well-acquainted with the staff, patients, and day-to-day operations.
For a Principal Dentist who has identified a Buyer within their practice, it might seem that the hard work is mostly done. They might think there's no need to engage an agent since a Buyer is readily available, and the sale can proceed with minimal hassle. However, even when a Buyer is in place, a tailored brokerage service is still necessary to navigate potential obstacles and ensure a smooth transaction.
The importance of a practice valuation
The importance of a customised brokerage service cannot be overstated. The first step is always a practice valuation. Even when selling to an Associate, it's vital to determine the practice's true value in the current market conditions. A competent broker will assess the practice as if it were going to the open market, ensuring a fair price for the seller, without the risk of undervaluing the practice due to a preexisting relationship.
Furthermore, a broker should handle all negotiations with the Buyer. Negotiating with a colleague can be challenging for a Business Owner due to personal emotions and subjective perspectives. A third-party broker can maintain objectivity and ensure fair negotiations for all parties involved, while also emphasising the seriousness of the transaction and the need for a fair market price.
Prepare for the unexpected
Having a contingency plan is essential, as sales to associates are more prone to falling through than open market sales. Unforeseen challenges can arise months down the line, potentially causing the deal to collapse. In such cases, access to a third-party broker's extensive database of prospective Buyers can be invaluable. With the valuation completed and the sale process initiated, it's natural to want to explore offers from other interested parties immediately.
Financial commitment is another key aspect. After accepting an offer, the broker typically requests the Buyer to sign a deposit schedule and provide a deposit to secure the sale. This not only demonstrates the Buyer's commitment but also protects the seller financially, covering abortive fees if the sale doesn't proceed as planned.
Guidance and support throughout the sale process is an ongoing necessity, as the sale of a dental practice can take up to nine months on average. Brokers must maintain regular communication with both parties' solicitors to ensure they are working towards the same goal, address any issues that arise, and ensure that all necessary documentation is ready for inspection by the Buyer's solicitor.
Lastly, satisfying the Care Quality Commission’s (CQC) requirements is a complex but crucial part of the practice sale. Properly following CQC procedures and avoiding application mistakes is essential to prevent serious delays in the sale process. Henry Schein MediEstates, with its extensive experience in the sector, offers a tailored CQC support service to meet individual requirements.
In conclusion, professional help from an experienced broker is essential when selling a practice to an Associate. It ensures a stress-free and smooth transaction. If you are ready to sell your practice with a buyer in place, contact Henry Schein MediEstates, the UK's largest specialist broker of dental practices, to set everything in motion and ensure your practice sale journey moves in the right direction.
Are you looking to sell your practice? Contact our team today for a Practice Valuation.