Avoiding the pitfalls of practice sales and acquisitions
A spotlight on marketing
There are many aspects involved with selling or buying a dental practice, often making it a rather long process. In order to streamline proceedings and ensure everything is tied up correctly, Luke Moore – Co-Founder of Dental Elite – provides some advice regarding how to market a practice for the best results.
When a dental practice is initially put on the market, how it is promoted will influence the amount of interest received. This involves everything from where it is advertised to how it is presented when a potential purchaser views the property. It is important to present a business in the best possible way in order to ensure a successful process.
Paint a good light
When speaking to a potential purchaser or showing them around the practice, it’s important to paint the business in a good light, without overselling it. The vendor’s behaviour is therefore crucial. For example, if they are looking to get out of the profession altogether, it’s important for them to avoid being too negative and highlighting all the worst aspects of dentistry and running a practice. We all know there are challenges, but focusing on the negatives doesn’t send good vibes to a buyer. The same goes for talking about staff – there’s no need to complain about a certain individual, even if the grievances relate to personality clashes and nothing to do with work.
When an offer is received, it is advisable not to spend too long deliberating. If there are major reasons for turning it down, these should be addressed efficiently and in the correct manner. Keeping a practice on the market for longer than necessary can damage the goodwill value. There is also a higher risk of the buyer pulling out if they don’t think the sale is serious or that this early delay is a sign of things to come throughout the transaction. In contrast, the very first offer that is made should not be accepted lightly. The first is not always the best.
When it comes to making a decision, doing so without emotion is key. It is completely understandable that a vendor who has poured blood, sweat and tears into a business over many years will want to pass it onto someone they like personally. However, a word of caution is necessary. Particularly where there is high demand for the dental practice, purchasers will sell themselves to the vendor in order to improve their chances. It’s important to remember that this may be, at least partly, a sales pitch. The decision to accept an offer should therefore not be an emotional one, but rather, one focused on the facts.
Being flexible for viewings will encourage interest from the largest possible pool of potential buyers. That might mean being available in the evenings or on days off, but it is an essential part of a successful practice sale. It is advisable for vendors to put the business on the market when they know they have some free time over the following few weeks. When showing someone around, it’s important not to give feedback that’s too honest. Telling a potential buyer about the challenges presented by a different possible purchaser might just give them ideas. It can also come across as gossip, which some buyers won’t like. In addition, keeping a level head is vital – some purchasers might be really enthusiastic because they are caught up in the moment and may not actually follow through. Until a solid offer is received through official channels, continue booking viewings.
It’s crucial to make sure that all information provided in advertising and during viewings is up-to-date and correct. Providing misinformation or old details might hurt the deal later on in the process when the truth is revealed.
The attractive façade
Presenting the practice at its best is important during viewings. However, spending too much money and time on the appearance of the building can be a waste as buyers will see through it. It’s better to invest in the equipment, staff and protocols in the practice in order to demonstrate the quality and viability of the business. If the aesthetic is left wanting in places, it’s much better to highlight the potential for improvement, especially where only cosmetic enhancements are needed.
If you’re thinking of putting your practice on the market, but aren’t sure how to go about it, get the support you need. The experienced team from Dental Elite can help with everything from your marketing activities to your due diligence and the CQC process. Give us a call today to find out more.