FAQs

Frequently Asked Questions

For Buyers

  • Q: How does the process of buying or selling a practice work?

    A: See the link here to our general overview

  • Q: Are buyers charged any fees?

    A: As a buyer, you will never pay Doctor’s Choice a penny. Be careful though, not all dental brokers operate this way. Various brokers will charge the buyer a percentage of the purchase price while others will require you to sign a dental supply agreement for “x” amount of years. In short, make sure you ask other brokers how they operate. You will however have to hire an attorney and / or CPA to review contracts as well as advise you on tax implications.

  • Q: Who does Doctor’s Choice represent in the process?

    A: We act as a transaction broker. What this means is that we are a neutral party and help facilitate the deal. Other brokers act as “duel representation” which means they represent the buyer AND the seller. We are still trying to figure out how ethically this makes any sense…Then you have seller representation which means that the broker represents just the seller. We have found that it makes buyers very uneasy about moving forward when your intentions are to only help the seller in the process and maximize their return. Therefore, we have found it best if we guide both parties through the process both don’t take ‘sides’. Contact us for further clarification.

  • Q: How much money can I get financed for the purchase of a practice?

    A: Banks are HOT to lend to dentists due to the fact that they have one of the lowest default rate of ANY business. Because of this, you will be able to obtain 100% financing for the practice and real estate (if applicable). Getting pre-approved or speaking with a bank should be done before even going to meet with a prospective seller. At this time, rates are anywhere from 3% to 5.5% depending on the bank and your financial credentials.

  • Q: how long does the process take?

    A: Depending on the buyer and seller and how diligent they are, on average we have seen this process take about 6 weeks AFTER you have found a practice of interest and submitted a letter of intent. The process can be longer or shorter depending upon the situation at hand.

  • Q: How is a practice appraised or evaluated?

    A: First thing to know is that when we evaluate a practice that we will tell you, the buyer, what we feel is the fair market value. The seller typically then puts it on the market for that price however the seller can ask for more. If they do ask for more, we will be sure to tell you what we think is the fair market value. Remember, we are not here just for the seller as a transaction broker.

    With that said, when doing an evaluation we looks are multiple variables but the 3 MAIN items are: cash flow, technology / equipment, and location (both city and where in that city). If you would like to know more specifics, give us a call and we would love to keep you some more insight. As a buyer you want to know how much money will I make if I purchase this practice as well as how likely am I achieve these numbers that the seller was doing. There is an exhausting list of other items we look into before putting a value on a practice. We can discuss these if you wish to know more.

  • Q: Will the staff stay after the transition?

    A: This is always a concern to a buyer however it is generally not an issue as these staff members have to work somewhere whether it be with you or another doctor. Our advice is to not change their pay or any other job functions and you will not run into any problems with losing them more than likely. Running through their mind is the fact that they will have to find a job at equal pay elsewhere as well as hope that they like the new doctor and staff members therefore they mine as well give you a chance. It is then up to you to keep them. As a buyer, if you see staff members that are older in age, you should approach the seller to see if they have hinted at retirement in the past but in most situations this is almost never an issue.

  • Q: Is it necessary to keep the seller on post sale?

    A: No, most dental practice sale transactions do not require the previous owner staying on as an associate particularly if the practice being sold is a general practice. If the practice is large enough and can support more than one working dentists it could be an advantage to the buyer to have the seller stay on if they are agreeable to do so however in most cases there is not enough chairs or dentistry there for two doctors. Every situation and practice is different so we are speaking from a general perspective. A FFS style practice may require a seller to stay on for a longer period of transition time post sale to help transfer the goodwill and introduce patients.

  • Q: Will the patients stay to see me now that the seller is gone?

    A: People are creatures of habit. Just as we explained in the section ‘will the staff stay?’ – same rules apply. The patients have to see a new dentist regardless so they mine as well see if they like you. You have their dental records and they know the staff members. Usually having the front desk and hygienist stay on board is a MUST. Then as long as the buyer is a good fit and matches the seller’s philosophy and doesn’t try and make too many changes, you will see patient retention in the 90%+ range. This is a proven FACT.

  • Q: Is it necessary to use an accountant and/or attorney?

    A: As a broker we recommend both seller and buyer seek counsel from an accountant and/or attorney. Only an attorney can offer legal advice and only an accountant can offer financial advice. Buyer and seller are welcome to use any attorney or accountant they wish, we just recommend that they use someone familiar with the business of dental practices so they will be adequately represented and protected. Referrals for accountants and attorneys can be given.

  • Q: Shouldn’t I work as an associate for a few years to help pay down student loans then look at practices for sale?

    A: We advise that directly out of school or residency that you work in the ‘real world’ for a minimum one year. We say this not as an attack on your clinical skills but you need to observe how others are managing their businesses and for you to learn the ropes. However, if you can find a seller who is willing to stay on long term and help mentor you whether it is clinically or business wise then it may be an opportunity you can pursue right out of school. These opportunities may be ideal but they are hard to come by.
    In regards to cash flow and supporting your lifestyle and family, finding a practice typically will NET you more than an associate position. Buyers typically are scared to take out another loan on top of their existing student loans. As this can be discouraging, buyers need to find a practice that will NET them more than their associate position after all expenses. Banks are lending buyers 100% financing. Why? Dentists have one of the lowest default rates of ANY profession.

For Sellers

  • Q: Let’s get right to it, you as a seller want to know how much do our services cost?

    A: We as a broker just like when you sell your home, charge a percentage of the purchase price. This percentage varies depending on the purchase price of the practice. Call us to find out specifically for your situation what we would charge.

  • Q: What should I consider when hiring a dental practice broker?

    A: The most important factor in selecting a broker is finding one with a superb track record and a quality reputation. Selling your dental practice requires significant knowledge of the dental industry and practice sale which includes the specifics of your local market. For instance, you may be in an area where there are more buyers which translates into a higher value. Further, finding a buyer is just step one and making the process seamless and positive for both buyer and seller is the important part.
    For more information on ‘Why Doctor’s Choice’, read our article here.

  • Q: How long does it take to sell my practice?

    A: There is no answer for this question. We use the analogy it is like fishing - you could go out one day and catch 20 fish, then the next day, none. On average we estimate this process to take 3 to 6 months depending on how attractive your practice is and where it is located. Practices in rural settings can take one year plus. It is important that you reach out to us well in advance of when you are ready to sell so we can give you tips and advice of what potential buyers are looking for.

  • Q: How does the process work?

    A: See the link here to our general overview.

  • Q: Who does Doctor’s Choice represent in the process?

    A: We act as a transaction broker. What this means is that we are a neutral party and help facilitate the deal. Various other brokers will act as “duel representation” which means they represent the buyer and the seller. We are still trying to figure out how ethically this makes any sense…Then you have seller representation which means that the broker represents just the seller. We have found that it makes buyers very uneasy about moving forward when your intentions are to only help the seller in the process and maximize their return. Therefore, we have found it best if we guide both parties through the process both don’t take ‘sides’. Contact us for further clarification.

  • Q: Is it necessary to use an accountant and/or attorney?

    A: As a broker we recommend both seller and buyer seek counsel from an accountant and/or attorney. Only an attorney can offer legal advice and only an accountant can offer financial advice. Buyer and seller are welcome to use any attorney or accountant they wish, we just recommend that they use someone familiar with the business of dental practices so they will be adequately represented and protected. Referrals for accountants and attorneys can be given.

  • Q: Is everything confidential?

    A: All buyers sign a confidentiality before we release ANY data. This contractually obligates them to not share any of your practice data as well as your name with any other person(s). It is understood that 99% of sellers want their staff and colleagues to know nothing about the sale of their practice. We take this matter VERY serious. Fortunately for a seller, it works both ways as buyers do not want their employers to know they are looking elsewhere either.

  • Q: As a broker, do you just find a buyer and I do the rest?

    A: NO. At Doctor’s Choice, we are here with to help you from start to finish. We work with you, the buyer, and supporting parties to ensure a successful transition. Finding a buyer is usually the easy part as getting the deal structured fairly for everyone and to close is the difficult part. Ask yourself these questions when considering if you can do this on your own: What bank should a buyer talk to? Will you have to hold paper? How much is a fair sale price? What do you and the buyer need to have in place prior to closing? Who pays for what during the transaction? These are just a few of the ,many questions that buyers and sellers ask.

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