When buying a dental practice, you’re going to assemble a team to help you out. As I’ve said elsewhere, the most important member of your team is your dental-specific attorney. Next is your accountant. But there are others as well. A banker, a broker, equipment reps, insurance agents, and possibly some other consultants as well.
With so many people involved, which voices should you turn to first?
I put all of these folks into one of two buckets: “on your team,” and “not on your team.” Simple, right?
Here’s what I mean. Everyone involved has the best interests of the practice sale itself in mind. (Ideally, at least.) They all want to transition to move forward smoothly and quickly so that they can get paid. But that doesn’t necessarily mean that they have your best interests in mind. And that’s okay!
Your dental-specific attorney and accountant are on your team. The banker, broker, equipment rep, and insurance agent are not on your team. Don’t read this as an insult to those in that category—it’s a more practical point than that.
During the negotiation and transition process, when you’re getting tons of advice from all angles, it helps to know just how to weigh that advice. “The broker says that’s a totally normal number for practice overhead, but my accountant says it’s higher than they normally see.” In this case, the broker is simply trying to make the sale happen, which is understandable. The accountant, though, is getting paid no matter what, and has no reason to shade the truth for you.
What’s the difference between each category? I just hinted at it, but let’s spell it out: It’s about how they get paid. The accountant and attorney are both paid directly by you. You are their client, so you are their priority.
The others on the list are paid either on completion of the deal, or on commission for sales of equipment or insurance policies. So the incentive for them is slightly different, and isn’t about keeping your interests top-of-mind. This doesn’t mean that those not on your team are out to get you! They’re almost certainly not. It just means they’re not necessarily putting you first.
So if there’s any part of the sale that’s ambiguous (“Will this be to my benefit? or the seller’s? or the sale itself?”) you should lean on your team. Your accountant and flat-fee attorney have no financial stake in the size of the sale. In fact, they have a legal obligation to put your best interests first.
So assemble a great team! Once you’ve found a potential practice to buy, give us a call. We’ll be your dental accountants, and we can set you up with some introductions to some amazing transition attorneys, bankers, and the rest.
