In practice transitions, negotiating harder does not always produce better results. In fact, it often produces the opposite. Over years of facilitating dental practice sales, we have observed that the dentists who secure the most favorable overall outcomes are often the ones who ask for fewer—but more strategic—things. The reason lies in a concept we refer to as negotiation capital. One of the most important roles a practice broker plays in the sale of a dental or dental specialty practice is helping buyers and sellers negotiate the terms of the transaction. It is in this transition phase that a broker has the greatest opportunity to add real, tangible value. Over time, we have observed a consistent but often overlooked dynamic at work in successful transactions—negotiation capital. Simply put, negotiation capital is the finite goodwill between a buyer and a seller, allowing either party to request and receive concessions during the negotiation process. Every “ask” draws upon that capital. A large request—such as a meaningful reduction in the purchase price—consumes significant negotiation capital. Smaller requests—such as post-closing availability to answer questions—generally consume very little.
With this concept in mind, we frequently caution clients to be intentional about how they spend their negotiation capital. Too often, parties expend goodwill on issues that ultimately have little long-term value. That value may be financial, but it can also be emotional or intangible, such as pride, legacy, or peace of mind. Effective negotiation requires identifying what truly matters most to you, understanding what matters most to the other party, and prioritizing accordingly. In short, it requires choosing your battles wisely.
This raises an important question: how does one increase—or lose—negotiation capital in a transaction as significant as a practice transition? In our experience, the answer comes down to two forces. Trust tends to increase negotiation capital, while selfishness almost always erodes it. Life is full of paradoxes—ideas that seem contradictory on the surface but reveal deeper truths upon closer examination. Negotiation capital is no exception. Paradoxically, the more a party is willing to give, the more they often receive in return. Trust is built on competence, honesty, and kindness, and it is sustained through transparency, reliability, and consistent communication. The more clearly the other party feels understood and respected, the more trust is established. Clients will sometimes withhold information about their practice out of fear that disclosure may weaken their negotiating position, often assuming it will lead to a financial disadvantage. In our experience, the opposite is frequently true. Transparency may not eliminate every concession—such as a price adjustment—but it often builds the trust necessary to gain flexibility in other areas of the deal, ultimately leading to a more balanced and successful outcome.
Selfishness, by contrast, almost always diminishes negotiation capital by eroding trust. By definition, selfishness prioritizes personal gain without adequate consideration for the other party. Like rotting garbage, selfishness is easy to detect. It seeps into negotiations through unreasonable demands, inflexibility, or dismissive communication. Left unchecked, it strains relationships, escalates tension, and can derail an otherwise viable transaction. Because selfishness is a common human trait—particularly when significant sums of money are involved—it is important to recognize and manage it. One effective way to do so is to consult a trusted advisor, such as an experienced practice broker, who can evaluate requests objectively and without emotional bias. This requires humility and a willingness to hear uncomfortable feedback. What feels justified in the moment may, in fact, be unreasonable.
We once worked with a seller who struggled to make a $500 concession in a transaction where he was receiving $1.8 million in cash. The buyer’s request was entirely reasonable, yet the seller strongly resisted. Upon deeper discussion, it became clear that the resistance was emotional rather than rational—and rooted in selfishness. Addressing that dynamic allowed the transaction to move forward successfully. Another effective safeguard is the simple application of the Golden Rule. Try viewing the transaction—or even a single term—from the other party’s perspective. How would you feel in their position? What would seem fair? What would you be willing to accept? This exercise not only builds empathy but also often increases trust and makes concessions easier to offer without resentment.
Whether you are currently navigating a practice transition or contemplating one in the future, understanding the concept of negotiation capital can meaningfully influence your outcome. When trust is protected and selfishness is kept in check, negotiations are more productive, relationships remain intact, and agreements are more likely to succeed long term. An experienced practice broker can play a critical role in this process—not simply by negotiating terms, but by guiding the parties toward a transaction that is both fair and sustainable.
