Volume 11: Five Time Frame Levels to Sell a Practice

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Selling a dental practice takes time. There are several things to consider, including location, patient base and the age of equipment that are key to the length of time it takes to sell a practice. Here are five levels of demand to consider when considering the time frame to sell your practice.

  1. Proximity to Toronto. The closer you are to Toronto the higher the demand. That is, there are more purchasers looking to buy a practice in the Greater Toronto Area (GTA) than everywhere else in the province combined.If you have a practice in a high demand area with contemporary assets and a good size patient base, one should anticipate a shorter time frame to sell the practice and it should have a substantial value. But if you have excellent equipment and leaseholds with only a limited patient base, this is not a good situation as the purchaser is probably looking for a good patient base.
  2. Cities with universities. The second most sought-after locations are midsized cities in southern and eastern Ontario that have universities. These include Ottawa, Kingston, Hamilton, St. Catharines, Kitchener/Waterloo, London, and Windsor. A practice in one of these areas that has relatively new equipment (8 to 12 years old) and a good patient base should sell within a period of two to four months.
  3. Commuting distance to university centres. The third most sought-after locations are the communities within easy commuting distance of the midsized university cities. Again, a practice in one of these areas that has reasonably new equipment and at least 1,500 patients should sell within two to four months. If the practice has older equipment, expect it to sell within four to six months.
  4. Centres away from university communities. Less desirable areas include cities and towns that don’t have universities. In these areas, a practice with relatively new equipment and a good patient base could sell within four months to one year. If the practice has older equipment and a limited patient base, it may need to be sold to another dentist in the area who would merge it with his or her current practice. We have just sold a good practice in level 4 in six months.
  5. Northern Ontario. The least sought-after practices are in this area of the province. For a buyer, Northern Ontario is the best place to find an inexpensive practice. The cost of rent and staff is lower than in other centres. The lifestyle is more relaxed but the demand for practices is the lowest.It’s difficult to predict how long it would take to sell a practice in this part of the province because factors such as airport accessibility and who the major employers are in the community come into play

General Rules

As a general guideline, patients in the GTA are very valuable because competition is so great. As a result, the equipment and leasehold improvements in the practice have less importance. In lower demand areas, meanwhile, the equipment and leaseholds tend to be a determining factor in the salability of the practice because there is seldom a competitive situation for patients.

If the practice is properly valued, the above time frames are reasonable in most situations but there are no guarantees.

The Professional Advisory

  1. One Year Later

  2. Dealing with Unsolicited Offers

  3. Covid-19 Practice Sales Update

  4. When is the Right Time to Sell Your Practice and Why?

  5. Partnership Pitfalls

  6. The Real Cost of a Dental Practice Set-up

  7. Smaller Practice Realities

  8. Dental Market Update - 2019

  9. Creating Your Own Most Valuable Practice (MVP)

  10. Small Practice Economics

  11. The Market is Very Efficient

  12. How Can Dental Practice Values be Rising and Declining?

  13. Hygiene as a Value Driver

  14. The Value of a Good Team

  15. Is it Time to Move?

  16. Staging A Dental Practice

  17. The High Cost of Dying

  18. Deal-Busters

  19. Patients - Attract and Retain

  20. Should I Stay or Should I Go?

  21. Is There a Buyer for Every Practice?

  22. Good, Better, Best - The Market has Spoken

  23. Smooth-Sale-ing

  24. Buying Time

  25. Patients, Patience, Patients

  26. A Real Patient

  27. Why Do a Practice Valuation? I'm not Selling

  28. Irrational Exuberance or The New Normal?

  29. Do dental equipment and dental technology affect a practice value?

  30. Finding and Being a Mentor

  31. Bigger is Better

  32. Dave's Top Ten List for Buyers (Vendors should read this too!)

  33. How Well Do You Know Your Practice?

  34. Dave's Top Ten List for Vendors

  35. What will happen to dental practice Values in the next 10 years?

  36. Your Premises Lease is an Important Asset

  37. What are Associates Thinking?

  38. There is Life Outside the GTA

  39. When Is the Right Time to Sell My Dental Practice?

  40. Mergers are a Viable Option

  41. Is Your Associate an Asset or a Liability?

  42. Has your Practice Facility Kept Up With Your Billings?

  43. The 100 per cent of Gross Myth

  44. The Past, The Present and The Future

  45. Caveat Emptor

  46. Overpaid Long Term Staff

  47. Selling your Practice in Stages

  48. A Potential Pitfall of Selling Shares

  49. Value in Your Practice Through Balance

  50. Only Trusted Staff Can Defraud You

  51. To Own or Not to Own Practice Real Estate? That is the Question.

  52. Coping With A Large Patient Base

  53. Successful Dental Practice Transitions

  54. Taking Care of Business

  55. The Investing Dentist Phenomenon

  56. Two areas to focus upon that could negatively impact the value of your practice

  57. Organize your Debt in Order to Sell your Practice

  58. Having a Better Team

  59. How Do I Prepare My Practice For Sale

  60. How Do I Prepare My Practice For Sale? Part 3

  61. How Do I Prepare My Practice For Sale? Part 2

  62. How Do I Prepare My Practice For Sale? Part 1

  63. Advice to My Son or Daughter Graduating from Dental School

  64. Transition - What to Expect

  65. Discussion on Digital X-Rays

  66. Partnerships and Shotguns

  67. Strategic Planning - How to Get Started

  68. Calling All Vendors - Practices have Gone Up in Value

  69. Purchasers: Expect to Pay More for a Practice because of Lower Professional Corporation Tax Rates

  70. Matrimonial Practice Valuations

  71. Purchaser's Guide to Affording a Practice

  72. Location Improvements Throughout Your Career

  73. Small Practice Valuations

  74. Partnerships – The Best and The Worst

  75. Changing Location When the Opportunity Comes Along

  76. Visual Presentation of Your Practice

  77. Presentation of Charts

  78. Your Premises Lease Can Be Your Worst Enemy

  79. How to Select an Appraiser for Your Practice

  80. How Are Your Billing Ratios?

  81. It Pays to Invest in Your Tangible Assets

  82. The Importance of Separate Financial Statements

  83. Five Time Frame Levels to Sell a Practice

  84. 12 Suggestions to Safeguard Computer Data

  85. How to Buy a Visible Practice

  86. Why is there a shortage of good practices today?

  87. The Importance of Equipment in the Purchase of a Practice

  88. The Balanced Practice

  89. Will My Practice Be Saleable in The Future?

  90. Buyer Be Aware

  91. Excess Profit - The Second Key

  92. Patients and Profits are the Keys

  93. Plan Ahead