How you manage contact with a seller will be critical to your success in pursuing a dental practice acquisition.
This page offers advice that will help you gain insight into both your initial contact as well as follow-up meetings with a seller.
Initial Contact with a Seller: Making a Good Impression
There are two key goals to focus on when meeting with a seller for the first time:
- Positioning yourself as a good fit to purchase the practice
- Gathering information to support your own decision-making
Once you have identified a practice for sale that is performing at a desired volume level and is located near an area where you would like to live, get the initial offering package right away.
Then plan to attend the Open House or meet with the seller as quickly as possible.
Keep in mind that, when a practice is properly priced, there are typically multiple parties simultaneously investigating its purchase. However, there are things you can do to improve your chances of being selected over competitors to complete the acquisition.
In your first meeting, let the seller to get to know you as a person—not just as a professional. Approach this offering with the attitude that the seller is talking to other dentists. You want to foster a highly favorable impression.
Listen carefully to the seller, since he/she will be giving you clues on what they are seeking in a successor. Zero in on any “hot buttons” the seller mentions. Listen intently to their practice story. Keep in mind that a seller does not have to sell their practice to anyone willing to pay the asking price.
It is extremely important that they believe their patients and staff shall be well taken care of by their successor. When you are meeting the seller for the first time, understand that he/she is already assessing whether you are an appropriate candidate to buy the business.
Be polite, and interact. Remember, you made the appointment to investigate this opportunity. Do not be mute! Express an interest in learning about the seller’s story.
Show that you are confident in your ability as a professional, but be careful not to appear arrogant. Share things about your life, along with how your journey in acquiring a practice has brought you to this seller’s doorsteps.
Assure the dentist that you are committed to maintaining their good reputation in the community. Discus your thoughts regarding rework issues as this is an extremely sensitive area to any seller. And impress upon the seller that you will maintain confidentiality about the fact that they are selling their practice. Most important, be yourself!
If you create a favorable impression at this meeting, you will have succeeded in getting the seller’s attention.
Gathering Information for Your Own Decision-Making
Even while you focus on making a good impression at the first meeting, don’t forget the other main objective: getting information to support your own decision-making.
However the purpose of your initial meeting with a seller is not detailed due diligence—it is to form impressions. If you try to bore into minute detail when you should be focusing on creating rapport, you may damage your chances of being selected by the seller.
Here are some ideas of the impressions you will want to note. What are your feelings about:
- The office?
- the delivery systems?
- The building housing the practice?
- The location of the practice?
- How compatible are you with the seller? Are your philosophies similar?
- Are you comfortable with the asking price now that you have met the seller and seen the physical plant?
Keep your initial meeting time reasonable: 90 minutes is more than adequate. Stay relaxed and establish rapport. As you separate and give thought to what you saw and heard, you will then be able to determine if this opportunity warrants further investigation.
The Second Meeting: Now is the Time for Due Diligence
Assuming you wish to proceed with the practice you have visited, it is time to begin due diligence in earnest. Get the hard data on the practice, which includes things like:
- Tax returns
- Income statements
- Production and collection summary reports
- Accounts receivable aging
- Patient flow data
- Patient demographics
- Procedure summaries
- Breakdown of insurance revenues if the practice is a Premier-only provider with Delta
- Premise lease
- Personnel histories
- Staff compensation/benefits data
You should deliver these to your advisor immediately. Proceed to schedule a second meeting with the seller. This meeting will be unlike the first meeting. Your questions shall be more probing, since you are now commencing your “due diligence” review of the practice.
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