Only Hurting Yourself – A Reflection on Negotiating When Buying a Dental Practice
Time and time again we see buyers get caught up in meniscal details when working out deal terms during the purchase of a dental practice. Doctor’s will often view buying a practice the same as a car or even buying a house. That could not be further from the truth! As a broker, we are here to help both buyer and seller work through the process as seamlessly as possible and give guidance as to what is fair. One of the main points we push upon buyers is to not negotiate the sale price after we determined a fair market value for said practice. You may be thinking to yourself, of course, the broker doesn’t want me to reduce the price! There is a lot of trust and integrity that can be put into your broker and in you should absolutely have them go through the evaluation with you to explain how they came up with the price being quoted. If all checks out and seems fair, leave it be! It should also be noted that every broker works differently. You need to ask the broker you are working with if they are a transition broker or representing just the seller in a sale. If that broker is representing just the seller then disregard this article as you need to get professional help on your side.
The purpose of this article is to just help you understand the mentality of a seller during negotiations and if you plan on offering a lower price to be wary when doing such. I can promise you that post-sale you will need the seller in some capacity whether that be having the seller work back as an associate or simply Dr. Seller taking a phone call and answering any questions you have about a case that was done on Mrs. Jones. A common example that buyers will run into is when the seller is working back to introduce you to patients and transition the practice. Do you want the seller to go above and beyond to help you do such? Of course. Do you think if the seller feels they did not get a fair price and you piss them off that they are going to do this? Absolutely not! There is a big difference in “Hi Mrs. Jones, I sold my practice and I plan to retire. I wanted to introduce you to the new doctor in Dr. Buyer”. Opposed to prepping your seller as to how you want it presented to a patient in “Hi Mrs. Jones, a pleasure to see you again! I want to introduce you to Dr. Buyer who is going to be taking over my practice as I phase out. They grew up in Miami and we met at a world-renowned continuing education class to where I met him or her. I know you will love them! Let me go get Dr. Buyer and introduce you to them!”. Which would you prefer them do? This is a basic example of various items that come up post-sale to where a seller can HELP or HURT you.
Take it or leave it but when you lose out on your dream practice because you wanted to try and save $20,000.00 or the patient attrition post-sale is above average, remember reading this article. You are not buying a new car and you need to get that mindset out of your head. This is not even taking into consideration the fact that in the state of Florida it is a complete sellers’ market.
