Best Practices for Selling a Multilocation Dental Practice: Part II

March 21, 2023

At a glance

  • The main takeaway: In the second segment of our two-part series, we review two essential steps all practice owners should take before embarking on a multilocation sale.
  • Impact on your practice: Before you put your practice on the market, it is important to have a clearly defined view of your ideal buyer and make sure you have the right pieces in place before you embark on a sale.
  • Next steps: Aprio’s dental transitions specialists can help you navigate multilocation practice sales with confidence.

Reach out to our team today

The full story:

Multilocation dental practice sales can be more complex than traditional, single-practice transactions. In the first segment of our two-part series on the topic, we explored the first two steps all multilocation practice owners should take to ensure they set themselves up for success.

In this second segment, we’ll explore the final two steps in the sale preparation process, which include finding the right buyer and tips to ensure your practice is well-organized internally.

3. Narrow the buyer playing field

This piece of your transition strategy comes down to your ideal buyer. If you are selling a multilocation practice, you most likely have larger offices, so you need a buyer who has the cash on hand that would qualify with a conventional lender or has private equity money to back the purchase. With this in mind, you want to make sure the buyer you choose can own, operate and qualify for a larger practice purchase. For instance, in our work with multilocation sales, we typically see buyers who already own additional practices themselves — anywhere from five to 10 or 100 to 200 locations throughout the country.

Some multilocation owners choose to sell to larger organizations or dental service organizations (DSOs) with experience running multiple locations because they are able to provide a wider pool of resources — such as more profit-sharing opportunities for employees or better technology and equipment in the office. As the owner, your responsibility is to help facilitate the merge between your staff and the larger buyer, ensure employees stay engaged, maintain production levels and keep the transition flowing smoothly.

4. Assess your sale readiness

After you tackle the first three steps of the sale process, make sure your practice is well-organized internally. Review the terms of your contracts with employees and associates. Organize all of your lease agreements and monthly rent obligations and find out what the options are to renew your leases if needed. Take a look at your human resources handbook and reassess whether your policies are the same or different per office.

Buyers will request and review all of these details when engaging in a potential sale with you. The more organized and aligned your policies and practices are across offices, the easier it will be for potential buyers to review the bigger picture, which will likely translate into a higher dollar amount for your practice.

In addition to getting these items organized, have an expert compile a practice valuation in advance of any potential sale, whether it’s 12, 24, 36 or even 60 months away. A transition planning team can take a look at your financials and analyze the deal as if they were the buyer, giving you a valuable insider’s look into what you can expect. Plus, the team also can help you develop a roadmap and strategy for the sale process. It’s never too early to start planning for a transition, particularly from a tax and financial perspective.

The bottom line

One of the savviest things you can do at the outset of the sale preparation process is to hire a qualified, transition planning professional, especially if you’re dealing with multiple locations.

Aprio’s dental transitions specialists can help you navigate the process and make important decisions with confidence. From finding the right buyer and assessing valuation to choosing the right dental-specific lender, Aprio’s dental team can help you simplify transitions.

Contact us and get professional guidance from our team as you start your multilocation practice sale journey.

Related Resources

Best Practices for Selling a Multilocation Dental Practice: Part I

From Associate to Owner: How to Buy a Dental Practice in Today’s Economy

To Sell or Not to Sell? Best Practices for Assessing a DSO Offer

The End Game: Critical Steps to Prepare Your Dental Practice for a Transition

Stay informed with Aprio.

Get industry news and leading insights delivered straight to your inbox.

Stay informed with Aprio. Subscribe now.

About the Author