Putting together a practice transition team

Whether you are buying or selling a practice, having a talented transition team to guide you through the process is valuable. Here are some key professionals to consider having on that team.

Transition team for sellers

• Dental practice broker: An experienced practice broker will know your local market and be able to accurately value your practice to maximize profit without deterring buyers. They will also be responsible for marketing your practice, vetting interested parties, handling negotiations, and helping you navigate the sales process.
• Attorney: All legal documents should be drafted or reviewed by an attorney, including the purchase and sale agreement and any post-closing agreements.
• Accountant: Purchase price allocation should be reviewed by your accountant as it affects taxes for both the buyer and seller. Your accountant can help you look at how payments are structured to mitigate tax liability.
• Personal financial planner: Selling your practice may be one of the largest single influxes of money in your career. Your financial planner should be kept in the loop to assist you in making investment plans for the lump sum.
• Spouse and family: Selling your practice affects your entire household. Get your spouse and family involved to make sure everyone’s needs are taken care of.

Transition team for buyers

A buyer’s transition team will include most of the same professionals as for a seller, performing the same services. In addition to revising all agreements and advising on tax strategy, the buyer’s attorney and accountant should work together to set up the appropriate entity to take possession of the business assets post-closing.

Buyers may wish to hire the services of a practice broker to do an independent valuation of the practice as part of the negotiation process. Your accountant can also assist with due diligence by going over the financials to confirm the health of the business.

Additional team members for buyers include:

• Lender: Many dentists will require financing to fund the purchase of a new practice.
• Insurance broker: Whether you use the seller’s insurance broker or find your own, you’ll need to set up workers’ compensation and general liability insurance.