Volume 33: How Do I Prepare My Practice For Sale? Part 2

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Part II Four to Seven Years Before Planned Sale

You have passed the point of doing major renovations or moving. You will be selling your practice where it is currently located. Let’s make the best of it; renovate where necessary, to best suit your needs. Try to utilize your entire area. Eliminate wasted space, paint or wall paper with the help of someone with colour taste and select a colour scheme which will be appealing to future purchasers. First impressions are important.

ou have missed your best opportunity to enhance equipment in your practice (see Part I) but now you should consider the oldest room or rooms and replace dental chairs and stools with good used equipment. Other equipment such as Sterilization should come under consideration. If your sterilization is old, this is one of the most important enhancements even before new dental chairs. In fact both sterilization and x-rays should be given equal weight if they are old and giving you some problems, replace them or at least upgrade with good used equipment. Check your room lighting, are the florescent diffusers yellowing, try the new polished cube diffusers, they can change the brightness very inexpensively.

Try to have your practice look contemporary. Sliding glass panels between the waiting room and the receptionist is very 1975 and prior. Today the receptionist area projects into the waiting room area to be more patient friendly. Artwork on the walls makes the practice warmer and more relaxed. Look for walls that would be enhanced by a nicely framed picture not a free trade promotion picture. One of my pet peeves is waiting room chairs made with square tubular chromed construction. It appears too cheap. Decent chairs do not have to be expensive, one hundred and twenty five dollars per chairs can be purchased from an office supply store and it would be a vast improvement.

Some practices have unnecessary clutter on all horizontal surfaces. This does not show well, try to reduce clutter by throwing it out or filing it.

Carpets or other floor coverings should be replaced or renewed if the years of traffic have taken its toll on the appearance. Being replaced now, it should still be good when it is time to sell if the quality is there. Dental decorators can assist in giving your practice a fresh new look which will stand up well past the time in which you would be selling your practice.

Remembering that patients and profits determine most of the value now is not the time to have a closed practice. One of the questions the purchaser will ask is: How many new patients per month does the practice have?

A valuation would be appropriate to focus your practice for the sale. It should point out any weaknesses which can be corrected prior to the financial statements which are used for the valuation. In some practices the creation of financial statements may even be an improvement. Purchasers have stronger belief in financial statements created by an accountant rather than internally created financial statements.

Now might be a good time to look into the terms of your premises lease. The purchaser will need a minimum of seven to ten years of occupancy after the sale in order to get money from the bank to purchase your practice.

OVERVIEW: Try to avoid having a tired looking practice. You may even find it uplifting to have a rejuvenated practice. You still have time to amortize the cost over the next few years and also to enjoy the improvements.

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