Sellers should also seek the advice of a practice professional in determining value. A Southeast Transitions Practice Sales Broker will apply industry-tested valuation methods, and will incorporate those intangibles to ensure that the practice will not be under priced. At the same time, your Southeast Transitions Practice Sales Broker will point out to sellers how the price is dictated by the marketplace and that realistic pricing is an absolute must. Buyers carefully compare the prices and financial performance of various practices on the market and generally will not even consider overpriced practices.  You wouldn't go to your CPA or attorney to buy a house would you.  The market value is a major factor in determining your practice sale price so use only consultants active in dental practice sales with at least 10 years experience in the market.

Financial records must be accurate, up-to-date and reflect the practice's actual financial performance. Some buyers may be willing to buy potential, but they won't and shouldn't pay for much of it, thus your bottom line performance is the critical factor that establishes the market price of your practice. Sellers should be open about all aspects of the practice that might affect the sale; otherwise, once the real facts are discovered, the deal may fall apart and the sale plus a qualified buyer may be lost.

Once you have made the decision to sell, you should gather the information needed to market and subsequently sell your practice.  Buyers often purchase practices that require little work on their part to perform their due diligence.  Remember they are considering other options and looking at other practice sale opportunities.
Here's a list of the key items needed:

• Three year's profit and loss statements plus a current year to date profit and loss statement (last years P&L needed for first meeting)

• Three years of Federal income tax returns for the practice (helpful, but can follow later)

• List of fixtures and equipment (needed when listing business)

• The lease and any lease-related documents (needed when listing practice)

• List of loans against the practice with amounts and payment schedule (needed when listing practice)

• Copies of any equipment leases (needed when listing practice)

• An approximate amount of the inventory on hand (needed when listing practice)

• List of all current contract, HMO PPO, Medicare, IPA, Union, etc.

• Names of outside advisors (needed when listing practice)

Remember that you are part of the marketing team. Your practice broker can't do it all and might even ask you to come to an office meeting to tell the rest of the staff about your practice. Follow your Southeast Transitions Practice Sales Broker's advice about dealing with prospective buyers and telling your staff there is a right and a wrong time to meet them.