You’ve been thinking about selling your dental practice. It hasn’t been an easy decision, but now that you’ve started to think about it, you realize you don’t know how to go about it or what to do next. We have helped many dentists make the successful transition, and we are here to provide you with a list of the top five things you should do before selling your practice.

1. Meet with your financial advisor.

You should confirm that you can afford to sell your practice. Wanting to and being able to afford to are two different things. You may be surprised. If you have never had a financial plan prepared, now is a good time to have one done. With cycles of instability in the financial markets, you may find that you’ll have to put your plans on hold for a few more years, or conversely, you’ll feel quite confident that the practice sale proceeds will only enhance your retirement lifestyle.

2. Make sure you get a comprehensive practice evaluation.

If you use a broker, retain one who will prepare a certified valuation. Most brokers who prepare formal valuations will credit the valuation fee against the sales commission. Beware of “FREE” practice valuations, which will not necessarily serve your best interest. You want a certified valuation that takes into account a full valuation of all the physical attributes of your practice, including the location, office, equipment, and other items that go into a detailed analysis. In addition, a practice valuation must take into account intangible assets and goodwill, which often make up a sizable portion of your practice assets. 

3. Do not slow down or work fewer days.

When you do this, oftentimes you stop accepting new patients as well. This will hurt your practice’s value and make a purchaser less interested in buying a declining practice. It can also harm your gross receipts and, ultimately, the sale price of your practice.

4. Evaluate the condition of your facility.

While you don’t necessarily have to make any large capital expenditures, first impressions are important. You should make repairs to things that are broken and cosmetic enhancements (e.g., fresh paint, new carpet, clean up the exterior if you are on the street so that there is curb appeal). You want your practice to look aesthetically appealing, clean, and maintained, even if it’s not the most modern. First impressions are always important.

5. Be realistic in your timing.

Sometimes, we get calls from doctors who want to sell their practice in six months or less! This is an almost impossible task for any broker. We tell prospective sellers to give a broker 9 to 12 months to sell a practice if they want to avoid a fire sale.

In the end, a good deal of planning is necessary for you to really get your practice ready to be put on the market. Careful planning will give you the highest return and, most important, peace of mind. For those of you who are thinking about selling your practice in the next few years, here are some key points to consider when getting ready for that big event. Failure to do so may result in getting a lower value or not being able to get a transaction that you can live with!