Selling Your Dental Practice? Don’t Count on Getting the Full Price.

If you’re selling your dental practice, here’s one bit of advice to keep in mind.

Let’s say you’re offered a deal that values your practice at $15 million. That’s nothing to sneeze at — so you sign and walk away happy. 

You just made $15 million! Congratulations!

Er, not quite. Maybe you get $5 million as cash upon signing. But that means the other $10 million may be subject to additional terms buried in the language of the purchase agreement.

And payment may not be a sure thing. 

Think of it like an NFL contract. Your team may sign their starting quarterback to an extension worth $400 million — but only $120 million is guaranteed.

If the player doesn’t perform, gets hurt, or even just falls out of favor, much if not all of the other $280 million may vanish into thin air.

Unfortunately, the same thing can happen with the sale of a dental practice. Your total payout may depend on your former practice continuing to perform at a certain level (maintaining existing revenue post-sale, for example).

If it doesn’t, you may lose out on at least some of your outstanding $10 million — even if the new owners are the ones who have dropped the ball.

So make sure you understand what you’re getting yourself into. We suggest working with an advisory firm that has experience helping dentists exit their practices and will negotiate better terms with the buyers. 

(We don’t have a dog in this fight, but both Polaris Healthcare Partners and Brightworth have some really smart folks onboard who specialize in dental mergers and acquisitions.)

Bring backup and you’ll face fewer surprises and be more likely to collect what you’re owed.

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