By Eugene W. Heller, DDS
Henry Schein Professional Practice Transitions’ can help to complete this anticipated dental practice transition. What follows is a partial list of the steps involved.
1. Meet with the Seller/Owner to determine their ideal dental practice transition (sales) plan and assist in identifying the most likely type of transition and candidate.
2. If a full or partial sale is involved, gather the necessary tax returns, and other documents and discuss documentation and missing or unclear information with the Seller/Owner’s accountant.
3. Conduct the necessary financial analysis and appraisal calculations.
4. Discuss the appraised value, determine the asking price, and list the dental practice for sale or associate-ship available. (The listing agreement gives the broker the “right” to offer the practice.)
5. Implement the necessary marketing plan, including advertisements, web site listings, and announcements.
6. Respond to various inquiries, secure confidentiality agreements, and discuss opportunities with prospective candidates.
7. Qualify the candidate for financing. If ownership will be offered, qualify their ability to take over the dental practice, manage the production schedule, and present the business skills needed to operate the office.
8. Introduce the candidate to the Seller/Owner; show the practice. This will typically require multiple meetings per prospective candidate.
9. Write the “Offer to Purchase” and any subsequent “Counter-Offers,” or write the proposed templates for the Employment Agreement and Letter of Intent.
10. Secure financing. Prepare the financing request (loan package), discuss the transaction with finance vendors, and secure a financing commitment.
11. Draft the initial transfer document template (Practice Sale Agreement). Discuss the template with the Buyer and Seller; and negotiate the agreement between the parties, redrafting as required.
12. Present the proposed template to the individual parties’ attorneys and accountants, discuss questions and/or required changes. Present requested changes to the opposing party and their consultants and coordinate final negotiations. If required by parties’ attorneys, prepare the final documents.
13. Provide guidance, checklists, and other material to both parties relative to required steps prior to commencement of associate-ship or closing. (e.g., Drafting of announcement, handling staff issues, printing new owner’s business cards, securing business checking account for new owner, and payroll arrangements)
14. Assist finance source in securing final loan documentation required to the close loan, such as proof of satisfaction of unpaid prior liens.
15. Act as trust and closing agent for final document execution and money transfer. The average practice sale involves 100–200 hours. A dental practice transition involving an associate-ship leading to a partnership may typically involve more than 200 hours. Henry Schein Professional Practice Transitions’ role is to facilitate these arrangements based upon the knowledge gained from our 15 years experience involving hundreds of dental practice transitions.
Dr. Eugene W. Heller is a 1976 graduate of the Marquette University School of Dentistry. He has been involved in transition consulting since 1985 and left private practice in 1990 to pursue practice management and practice transition consulting on a full-time basis. He has lectured extensively to both state dental associations and numerous dental schools. Dr. Heller is presently the national director of Transition Services for Henry Schein Professional Practice Transitions. For further information, please call (800) 730-8883 or send an e-mail to hsfs@henryschein.com.