Many practice owners don’t realize that they will pay a broker about 10% of the value of their practice to assist with the sale. This amount ($100,000 on a $1,000,000 practice) does not usually include the attorney’s fee OR official valuation (the broker will set a price for the owner – however it’s not always valid, and rarely done by a CPA/CVA).
A broker traditionally provides a way to put your office up for sale without other dentists or staff finding out. That used to be the only way to do anything semi-anonymously, and it worked for many years. But the year is 2024 and with the technology available today it’s quite easy to achieve anonymity without going through a broker…
We know that people are conditioned to think they should never tell anyone they are selling their practice, but maybe rethink why that is important.
A broker wants to hide the fact you are selling from your team because your team knows how the practice really functions (the good, the bad, and the ugly). A broker wants NO ONE (especially a potential owner) to ask ANY questions that could potentially screw up the deal. They also don’t want questions to be asked because it can slow down a sale. Even if it’s a great practice, there are things that need to be understood before the sale of a business. If someone is rushing you to make a huge decision, it’s almost always in their best interest and not yours.
Technology (our member website and mobile app included) allows delaying disclosing your identity until both the seller AND potential owner feel it is in their best interest to do so. I do understand the need to keep things somewhat private, but as someone that did a transition with my staff knowing every step of the way, maintaining reasonable openness is not such a bad idea. Some practice owners think their team members are just waiting for them to mention selling and then they’ll give notice – but why would they wait till then, especially in this workforce situation? If your staff are unhappy – they’ll leave now. If they are satisfied in your office already, and involved in bringing in the new buyer, they’ll be happy to have been consulted as the new person is joining. Those practices that sell one day and the new unknown boss shows up the next day will often find the team feels incredibly hurt and surprised. So even if the new owner is phenomenal, they start off with the team upset with them day one. This is not the best way to start off one of the most important days of your career.
When are brokers helpful?
If you are selling to a DSO.
However – keep in mind that a lot of brokers get a finders fee paid by the DSO to find them large practices, so in those cases, who is the broker working for – the seller or the DSO?
We purposely stay out of any DSO deals. We have zero desire to be part of that segment of dentistry.
If you are a single owner selling your practice to a single buyer, there is no reason for a broker. If you need an idea for the price you could reasonably sell for, we offer a flat fee valuation through a licensed CPA/CVA. Attorneys charge their normal fee for buy/sell agreement (usually under $10,000). If you are able to find a seller by posting on our state specific member website, you will save tens of thousands of dollars when selling.
Happy Matchmaking!
