Broker versus No Broker
Broker/Production/Collection Consultant, Omni Practice Group
Thinking of selling your practice but don’t want to pay the broker’s commission? Think again. Do you ever refer out procedures because you know the specialist has more experience, may get a better result, and take less time? History shows that any time you sell your business and/or real estate yourself, the chance of failure of the transaction is over 50%. A 7-10% commission will be much more digestible than the result if you try to do it yourself. I receive calls from senior dentists stating they sold their practices and took payments and it didn’t work out. After one year, they often must take the practice back and struggle to resurrect it to try and sell again. This is typically an experience that is new to both buyers and sellers. It takes time, marketing expertise, sales experience, buyer and advisor contacts, and lots of patience.
Your broker may spend hundreds of hours on your transition and your time is better spent at the chair and planning your retirement agenda. Brokers do lots of specialized marketing which can be costly and time-consuming, and it includes many weekends and evenings meeting with potential buyers. When working with a broker, the average practice sells in about 6 months so selling it alone can be much longer. Your broker should have a list of qualified buyers and a real estate license. If you own your space, it’s critical to sell the building at the same time or get a solid agreement together for future purchase. Time and time again we see senior dentists sell the practice and lease the space with a loose agreement and lose their renter. The buyer decides they like a newer building down the street and leave you with an empty dental building.
A good broker will determine the value of your practice and there is much that goes into this process. It’s not just about collections. Everyone’s goal should be to sell at a fair price in a timely manner. If the price isn’t “right”, the banks won’t finance, and you certainly don’t want to carry the loan. If you get pressured to sell too low, which we often see, you can lose tens of thousands of dollars. Brokers spend a lot of time working with all the trusted advisors you need such as dental specific banks, CPAs, and attorneys to determine the value of your practice and facilitate a smooth and successful transition.