5 Services For Sellers
If one excludes partnership formations for practice owners with many remaining years to practice, services to assist in practice sales and ownership transitions fall into 5 basic categories. Our Company offers each of these 5 services.
1. Practice Brokerage - Available in: KY, NC, OH, VA, & WV
2. Sale Consultation Service - Available in: KY, NC, OH, PA, TN, VA, WV
3. Intermediary Service - Available in: KY, NC, OH, PA, TN, VA, WV
4. Sale & Transition Structure Planning Service - Available in: KY, NC, OH, PA, TN, VA, WV
5. Practice Appraisal (Valuation) - Available in: KY, NC, OH, PA, TN, VA, WV
1. Brokerage Service (For Practice Owners/Sellers)
Purpose of This Service: To locate a buyer for your practice and complete the sale of your practice.
Knowledge & Insights Provided: See 20 Things To Know. We can provide all of the needed information in almost all of these categories. In regards to the other categories, we can provide valuable information to be used in conjunction with the advice and guidance of your accountant and attorney.
Assistance & Guidance: See 24 Steps In the Practice Sale Process. In regards to those 24 steps, we can:
Cost/Commission: This service is provided on a commission basis, as would be the sale of a house through a real estate broker, with the commission not due until and unless the sale is successfully completed and closed. The commission percentage that is applicable is discussed immediately below, as we explain unique aspects of our brokerage service.
Unique Aspects Of Our Service (In Comparison To Other Brokers & Consultants):
1. Non-Exclusive Listing Agreements. Unlike most practice brokers, our practice sale listing agreement is non-exclusive. This means that while we search for your buyer:
2. Sliding Scale Commission. Most practice brokers charge a flat rate commission, applicable to all practice sales, no matter how big the practice may be and how large the sale price might therefore be. Given that the most common commission rate among brokers is 10% this can result in enormous sales commissions for larger, more valuable practices. Rather than a flat rate commission, our commission is on a sliding scale. This means that as the practice sale price goes up, our commission percentage declines. This keeps sale commissions reasonable in dollar amount for all practices, preventing enormous commissions for more valuable practices.
Based on a study of over 1,000 practice sales, and their sale prices, this sliding scale commission reduction is likely to produce commission discounts and savings for over 80% of practice sellers.
3. Appraisal Discount. Clients using our brokerage service receive a 50% discount on any practice appraisals that they obtain from our Company.
2. Sale Consultation Service (For Practice Owners/Sellers)
Purpose of This Service: This service is designed for practice owners/sellers who have already found potential buyers, or who wish to structure their sales to currently employed associate dentists, and want our guidance and assistance in structuring and completing their sales.
Services Provided: Clients using this service want and receive all of the help and guidance provided by our practice brokerage service with the exception that they do not need us to search for their potential buyer.
Fees: When this service is appropriate, the practice owner has already found a potential buyer. Therefore, the practice owner has saved our Company from the considerable expense associated with advertising for and finding buyers for clients utilizing our brokerage service. As a result, we can and do charge far less for this service versus typical brokerage commissions. Our charges are in the form of fees (for stages of service), rather than commissions as with our brokerage service.
Fees may vary in each case, based on the anticipated difficulty of each client’s project and/or the amount of assistance each client needs. Therefore, once we know and understand what will be involved with each client’s project, we quote our fees for each stage of the project in advance of our client’s decision to utilize our services.
Who Pays Our Fee: In the case of this service, the practice owner/seller retains our services, we represent the practice owner/seller, and the practice owner/seller pays our fee. See the explanation for Intermediary Service below, a service similar to this one, but one in which the buyer and seller split our fees.
Unique Aspects Of Our Service (In Comparison To Other Brokers & Consultants):
It is our understanding that many brokers/consultants do not offer this service at a reduced cost and instead fit this type service into their brokerage service, charging a more costly 8% to 10% commission on the total sale price of the practice. Therefore, our fees for this service are far less than the fees/commissions of many other companies providing this service.
3. Intermediary Service (For Both Seller & Buyer)
Purpose/Services Provided/Fees: The purpose of this service, the services provided, and the fees charged for this service are nearly identical to those noted immediately above for our Sale Consultation Service.
What’s The Difference Between This Service & Our “Sale Consultation Service”? The only significant difference is in terms of who we represent and who pays our fees. In our Sale Consultation Service the practice owner/seller seeks our services, and we represent the owner/seller throughout the entire process. In this service, the potential buyer and owner/seller both, jointly, seek our service. When providing services for the two parties we make it clear that:
In this service, unlike with our Sale Consultation Service, the potential buyer and owner/seller split our fees. How our fees are split is left solely to the decision of the buyer and owner. We do not care what percentage each pays. That said, most often our fees are paid either 50% by each party or 2/3rds by the owner / seller and 1/3rd by the buyer.
4. Sale & Transition Structure Planning Service (For Practice Owners)
Who Is This Service Designed For? This service is designed for practice owners that wish to sell now or withing 5 years. years of their intended practice sale/retirement date.
Purpose of Service: This service guides the practice owner in planning ahead to better structure and execute his/her future practice sale with the objective to make that sale easier and more successful, while maximizing the potential financial benefit received by the practice owner from the combination of income between now and the future sale date, and the sale price then received.
Want to Avoid Practice Broker Commissions? For sellers that want to avoid paying many thousands of dollars in practice broker commissions, this service also provides practice owners with guidance and instructions to sell their practices themselves, without a practice broker.
Fees: Fees for this planning service are detailed in a brochure available from our Company. That brochure also provides further detail about the benefits and objectives of advance sale planning. (If you plan to sell now or within 7 years, contact our Company to request a copy of this Free Brochure.) Fees paid now, for advance planning services, may be credited against (deducted from) commissions that the practice owner might incur with our Company in the future, if the practice owner then elects to use our brokerage service.
Eligibility: Your practice will be eligible for this planning service if it meets all of the following criteria.
5. Practice Appraisal (Valuation)
Appraisals (Valuations) are provided on a fee basis. Fees may vary depending on the location of each practice, and the travel time required visiting and seeing each practice. Contact us to get a quote for our valuation service in your specific area. To understand the methodologies that we use in the valuation process, see Appraisals (Valuations).
George D. Stollings, DDS