Dentaltown September 2013 - (Page 24)

second opinion column » Why Won’t My Practice Sell? by Timothy Lott, CPA, CVA Second opinions are common in health care, whether a doctor is sorting out a difficult case or a patient is not sure what to do next. In the context of our magazine, the first opinion will always belong to the reader. This feature will allow fellow dental professionals to share their opinions on various topics, providing you with a “second opinion.” Perhaps some of these observations will change your mind, while others will solidify your position. In the end, our goal is to create discussion and debate to enrich our profession. – Thomas Giacobbi, DDS, FAGD, Editorial Director, Dentaltown Magazine Having represented dentists for almost 30 years, as well as representing hundreds of buyers in their efforts to purchase dental practices, I’ve seen what seems like thousands of dental practices for sale. Many times the practices that buyers are looking at simply aren’t worth the time, expense and diligence needed to purchase so we have to pass on it and move on to the next opportunity. Many practices won’t get more than a cursory look if the information doesn’t look reasonable at first glance. I believe the majority of practices that don’t get attention are located in areas that the younger generation just doesn’t want to live. To keep it simple, I’ll suggest there are three types of locations for practices: hot, cold and everywhere else. If you’re located in a cold area where most doctors simply don’t want to live or practice, it’s quite difficult for you to even get someone to look at your practice. If you’re located in a hot area, anything sells, even practices that have no business selling will wind up finding a buyer. Some of the hot areas I’ve witnessed include parts of Texas, Northern Virginia, most of California and more recently, Chicago, and parts of the northeast. There are certainly many more “hot” areas but the ones I’ve mentioned seem to rise to the top. So what about the practices that are “everywhere else”? If you have a practice located in one of these “everywhere else” areas that simply won’t sell, why is that? Perhaps you’re getting looks and no one is willing to make an offer. What is it about your practice that makes a buyer pass you by? Here are 24 SEPTEMBER 2013 » dentaltown.com some issues potential sellers can learn from – what are buyers and their advisors looking for when deciding which practices to pursue? Price Let’s get price out of the way first. While price is certainly important, it is not the primary driver in many cases. I’ve had situations where practices have been overpriced yet we’ve advised the buyer to pay the premium because we see potential for a great future for that practice. Curb Appeal (Inside and Out) I’m not talking about what it looks like from the outside. I’m wondering if anyone even knows where your practice is. If practices with great locations sell quickly then the opposite usually holds true as well. Practices in poor locations don’t get much attention. Like real estate, location, location, location is a key concern with many buyers. Even if you have a decent location, most buyers place just as much emphasis on what’s inside. If you’re still practicing as though it’s 1975 (and there has been little updating), most buyers believe it’ll cost them too much money to bring the practice up to today’s standards. They don’t want the headaches and costs associated with updating a 30+ year old practice in addition to paying a seller a hefty price for the goodwill. Books and Records Speaking of updating, an issue that’s near and dear to any CPA: the books and records of the http://www.dentaltown.com

Table of Contents for the Digital Edition of Dentaltown September 2013

Howard Speaks: Getting Poised for Growth
Professional Courtesy: Say Hello to Great Service
Second Opinion: Why Won’t My Practice Sell?
Advice Regarding #8 RCT and Large Apex
Patients Who Refuse Perio Treatment
Corporate Profile: Sesame Communications
Office Visit: Building Bridges in Dentistry
Enhancing a Smile with Cosmetic Dentistry in the New Economy
Top 10 Questions Dentists Ask When Buying or Selling a Practice
Women’s Time in Dentistry Has Come
The Benefit of Associate Agreements in Dental Practice Sales
Retirement Transition: “Mr.” Instead of “Dr.”, What Do I Do Now?
Paperless is NOT the New Black
Simple Safe Gingivectomy Around Implants Prior to Impression
Laser-Assisted Peri-Implantitis Procedure
In This Issue: Close Your Mouth
Perio Reports
Profile in Oral Health: Nose Breathing for Good Health, Fitness and Correct Craniofacial Development

Dentaltown September 2013