Rangewell
Case Study

Avoiding the Pitfalls of Selling a Dental Practice to an Associate

While selling to an associate may seem the sensible choice, many dentists fail to see the problems when they sell with their hearts rather than their heads.

Many dental practice owners have great relationships with their associates, which naturally lead to conversations if you consider moving on and potentially retiring. An associate may seem the natural customer of choice to buy your practice but sadly, the reality is far from the truth. In our estimations, only around 5% of dental practice sales are to associates. 

As one dentist found out, selling to an associate is not an easy process and has plenty of considerations you have to bear in mind, both good and bad. From accepting a potentially lower purchase price to protecting the legacy of your practice, you need to understand the dental practice sales process in order to achieve the best result for you and the associate. 

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Why was there a problem?

When a dentist approached us to sell to a partner, we knew that they had a challenge on their hands. While an experienced dentist, the buyer in question lacked the necessary business acumen and did not know how to fund their purchase. This left the seller in an awkward position where they’d agreed to allow the seller the chance to buy the practice, but they had no real route to funding. 

Luckily, choosing Rangewell means accessing both our selling agents to help you sell and our finance brokerage team that works with your buyer to secure the funding they’ll need to meet your asking price. In this case, the seller recognised the benefit of keeping their associate at the practice and trusting them to carry on from the hard work they’d already put in. This meant, in turn, that patients would stay at the practice and that all staff and systems would be in safe hands. 

Why we were able to help

Our selling agent listened to the dentist and then worked out a plan to make the sale a reality. Beforehand, however, they also had to explain that the realities of selling to an associate may mean compromises on asking prices or payment terms. While it might seem like the best idea, you must remember that your associate is a trained dentist and not a manager - so they might lack key knowledge or have plans that don’t reflect your own. 

We secured a stage of open communication between both parties with the agent facilitating, which helped agree on the direction of the sale and an outcome both would be happy with. Our agent then helped the buyer build a funding application for specific dental practice finance lenders who could offer them the money they’d need to buy. 

The seller, meanwhile, was helped through the process and ultimately had to understand that their initial asking price may not be able to be delivered in one payment - which meant exploring options such as shared profit or deferred payments. While that may seem like a compromise, it is a successful route that allows the associate to afford taking over as owner so you have someone you trust in the position, even if their funding options may not be able to match the capital possessed by a corporate group. 

Ultimately, we were able to facilitate a smooth sale between the dental practice owner and their associate, ensuring both parties were happy and the practice could benefit from the ongoing patient goodwill garnered as a result of the associate’s reputation.

About dental practice finance

Finding an associate who wants to buy your practice will introduce you to the complexities of dental practice lenders, who are often hesitant to lend to anyone who cannot present a lucrative investment opportunity. Instead, you’ll need a selling agent who can work with your associate to build a funding application that maximises their chance of success and subsequently gives you a better chance to secure the asking price you have in mind. 

Choose Rangewell as a selling agent for your dental practice. We’ll help guide you through the legalities and complexities of the process and help your buyer secure the funding they need with our finance brokerage team. 

Sell your dental practice with Rangewell

Selling a dental practice to an associate requires careful planning to satisfy both parties. So to avoid either not receiving the price you deserve or failing to meet some of the regulatory expectations of the CQC or NHS contract handover, get in touch with Rangewell’s selling agent team today.

Contact us now for a no-obligation consultation and see how we can help you understand the associate sales process and make it more effective for both of you. 

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