FAQ | NÜVA Smile - We Buy Dental Practices
How do I determine who the best party is to do a deal with?
This will likely be one, if the not the biggest decisions and transaction you will ever make. Getting it right is important for not only your financial future and security but also for the staff you are leaving behind.
Also, finding the best “fit” for you will make the process go more smoothly as well as whatever transition period that may be required of you.
There are no guarantees, but you are in control of the process and shouldn’t cede this control to outside advisors or Attorneys to make key decisions on your behalf. They can sometimes make a situation more complicated than it needs to be, especially if they don’t have experience in closing these types of transactions.
A couple of considerations:
You don’t have to be best friends with the purchaser but being generally aligned on big stuff like a fair valuation is a promising start. Nobody wants to feel they are being taken advantage of or low balled, that wouldn’t be a strong foundation for the relationship.
Gaining an understanding of the purchaser’s vision for the practice, the staff and what they value might be important to you, don’t be afraid to ask.
Ask for references from other Dentists they have acquired practices from, if they are hesitant for you to speak with them, this is a big red flag. Expect if they didn’t conduct and honor their commitments to other practices/Doctors, they more than likely won’t with you.
You may want more granular details on the process and timelines, including a transition plan. If they don’t have one, it might be a very bumpy road ahead.
If they ask questions about your staff and patients in a caring way that reflects your values this is a terrific sign.
What is required of me after the sale, do I need to stay with the practice for a certain amount of time?
There are a usually (3) options and scenarios that can evolve, many of which you have a say and influence upon.
The first scenario, a mutual transition plan and timetable is agreed upon, usually 1-2 years, this allows the staff, new owners, and outgoing Doctor to ensure an orderly transition.
In the second scenario, the Doctor sells all their equity but stays with the practice as a Practitioner for an unspecified amount of time, simply practicing dentistry.
The last scenario is a little more complex, this is one where you could sell a majority of ownership but maintain a portion of your equity, let’s say a 49% stake. You agree at some point in time to sell the balance in the future, perhaps in 3 or 5 years at whatever the future valuation might be. Leaving “skin in the game can provide upside (or downside) to the sale.
If I sell my practice, how does it impact my staff and how should I tell them?
Your staff are part of the value proposition of the practice and critically important as a prospective acquirer will look at the sustainability of what they are purchasing. Well trained and efficient staff will check a lot of boxes for a potential acquirer. Especially so if the primary doctor is ultimately transitioning out, what is left are the staff and their relationships with your patients. Don’t undervalue the significance of this!
The office culture and chemistry you have created should endure as well as keeping the staff in place in their current roles as much as practical and feasible.
When the time comes, be truthful and share as much information as you feel your relationship with them warrants. Regarding longer term staff, you may want to personally share more. Especially since they are more invested in the relationship with you as well as the desire to make sure if they are asked questions from others, they are prepared to answer in a manner you would like them to.
At NUVA Smile, we feel that staff are a very important part of an ongoing and successful transition, thus staff retention is something we evaluate and value.
What if I am not sure about when to sell, what should I do in the meantime?
Start learning about the various types of transactions that might apply to you, there are complex legal, financial, real estate and tax implications that you should be thinking about well in advance of a transaction.
Like selling a house, be thoughtful about what type of improvements and equipment you purchase, this may benefit or hurt you when you sell.
Continue to make process improvements and invest in your staff, they are one of the most valuable assets in a well-run practice. If you have family working at the practice, start to transition them away or be prepared to have them step away when you do.
Focus on the revenue side of the practice, staying focused on collections is paramount. While building patient retention as well as incoming new patients make a practice more attractive and valuable for a purchaser.
NUVA Smile offers Dental Practice Management services, so you can benefit from the depth of resources of a DSO offers prior to making a long term commitment. We liken it to dating before you get married.
How and when should I start thinking about sell my dental practice?
There are many reasons you may be considering selling your practice, time and time again many Doctors have this goal and aspiration but not a plan.
A clear and concise Dental Practice Transition Plan is the best way to ensure you are on the right path to achieving your goal. Much like parents start saving for their children’s college education years in advance of them going off to school, this is no different.
The most common reason we hear to sell is to start to extract value from what they have built by taking money off the table. Here are a few other considerations:
How a practice is valued and what goes into the appraisal and valuation of a dental practice are critically important to forming a realistic view of what it may be worth to a purchaser.
You may want less headaches of operating the business of a Dental practice, insurance, staff management and the associated challenges.
You may want to simply dial back how much you are working to spend more time with your family.
You want to be proactive and prepare for the best outcome for yourself, family, staff, and patients.
One of the scariest scenarios is the unplanned need to sell because of unforeseen reasons or a health crisis. In these circumstances, you leave yourself exposed financially and as well as the legacy of your practice is in jeopardy.
Don’t assume you will have the luxury of selling and transitioning your practice on your terms, life doesn’t always go according to plan.
NUVA Smile is expert at advising Dentists in all facets of practice transition, with several proprietary models to fit your individual and specific needs and timeline.
What is involved in selling my Dental Practice?
The time to start thinking about and preparing to transition your dental practice isn’t when you are in the exact moment to sell. The process and the few years prior are critical in the planning and preparing for either partial or total departure from the practice you have spent years building.
First and foremost, you want to receive a fair value for the practice as well as continuity of patient care well in the future. This is one of life’s big decisions and you will undoubtably have lots of questions, we will try to answer a few of them from our years of experience in working and guiding Dentists like you through the process.