All too often, I see buyers and sellers alike sabotage what could have been a perfect transition. Sometimes, it just was not meant to be. Other times, an earlier mistake stops the entire process. By then, it’s often too late to fix — especially if the mistake has sowed distrust or doubt.
Let’s look at three scenarios where a sale was torpedoed and explore how things could have turned out better.
Dr. Beatrice: Prematurely ruling out candidates
During her long career, Dr. Beatrice had built a thriving practice with a stellar reputation. She truly loved everything about her life’s work – the patients, her staff, even the building – but it was time to retire.
She created an ADA Practice Transitions™ (ADAPT) profile to showcase her practice. With the updated technology, attractive financials, and recently remodeled space, she thought it would be easy to find a buyer.
Over the next months, I worked as her ADA Advisor to suggest several potential buyers. When none of the connections went anywhere, I asked why all the candidates were missing the mark. Together, we walked through the dashboard of rejected candidates.
For each one, Dr. Beatrice had a complaint.
“That one’s not licensed in my state,” she said. “And that one is only a year out of school, so I bet she can’t afford a practice like mine. And where on earth did this one get their undergraduate degree? I’ve never heard of that school. This last one… it doesn’t say he speaks Spanish. Half my patients speak Spanish.”
I was surprised. I had hand-picked each of these candidates specifically for Dr. Beatrice. “How did your initial conversations with them go?” I asked.
“Conversations? I didn’t bother. Didn’t want to waste their time, or mine.”
I sighed to myself. “So how do you know that they wouldn’t fit your practice if you never actually spoke with them?”
Following my advice, Dr. Beatrice has begun to have conversations with interested doctors. While she is still struggling to accept that the perfect doctor to take over her practice may not fit her preconceived ideas, she is making progress. She is also doing a better job of providing me with feedback on each potential buyer, which allows me to better screen candidates. I am hopeful that, by working together, we will be able to find the buyer that fits her needs.
How to avoid this: Don’t judge a book by its cover
Your perfect match may not appear as you expected. A profile can tell you a lot about a person, but not everything. That’s why we strongly recommend an initial 15-minute conversation with each suggested candidate. After all, even if you don’t see the potential in the profile, your ADA Advisor saw something that made them think this could work. It’s your job to follow that thread in the initial call.
For example, Dr. Beatrice might have learned that the first candidate grew up nearby and was mid-way through the licensing process. The ambitious new grad was pre-approved to purchase a practice at her valuation. The third candidate graduated with top honors from a small liberal arts school across the country. And the fourth grew up speaking Spanish at home with his Mexican-American mother and grandparents.
Don’t rule people out based on a quick skim. Use your initial call to uncover details that are missing from their profile. Simply asking, “Why are you interested in this practice?” can reveal similarities that may surprise you! This is your opportunity to assess whether the buyer can serve your patients for the long run.
Don't rule people out based on a quick profile skim.
If you reach the end of the call and realize that this is not the right person for your practice, you have only lost fifteen minutes of your day – and you may have further refined your idea of what type of person you want to take over.
Buyers, associates, AND sellers can help avoid this by filling out their ADAPT profile as completely as possible. You should also think about why a practice or candidate interests you. Be sure to state this early in the call. Something as simple as, “I grew up nearby and want to serve the community” or, “Your practice is the perfect size, and I have endo experience,” can reassure the seller that you are right for the practice.
Dr. Ramona: Unprepared to buy
With two associateships under her belt, Dr. Ramona was ready to buy her very own practice. She began searching for the perfect place. She wanted to move back to her home state, ideally near family. The practice had to have three or four operatories with the latest tech – and fit her aesthetic. She wanted to focus on general dentistry while also doing some implant placement.
Finally, she found just the place, in a charming small town less than an hour from her parents’ house. The patient population and treatment mix fit her vision, and she could comfortably handle the workload with room to expand hours down the road. She even hit it off with the seller, who connected her with a local realtor to find a home.
But as due diligence progressed, things came to a screeching halt.
The first bank she approached rejected her loan application, citing high levels of personal debt. The next bank was willing to work with her if she could pay down her credit card debt, but balked when they realized she wasn’t licensed to work in the state. With the clock ticking, she scrambled and talked to additional lenders who had much higher rates and lousy terms. The seller grew frustrated and accepted another offer.
How this could have been avoided: Do your homework
You can make the entire process go more smoothly if you take some time to lay a solid foundation.
As soon as you think you might want to buy a practice, begin speaking to lenders with a focus on dental financing. They can explain their process and help determine what you can afford. By starting early, lenders can also advise on how you can present a stronger application – such as cleaning up your credit or avoiding large purchases. Once you identify a lender you feel good about, use them as a resource as you consider potential practices.
Interview at least three different lenders to understand their processes, requirements, and what they can offer. And don’t overlook a small local bank! In many underserved areas, the local bank will bend over backward to help keep a dentist in town. If you find a small-town practice, ask the seller if they have a trusted local bank. Since you will have already done your homework and spoken with other lenders, you can confidently assess how their offer stacks up.
Once you have identified your bank, assemble the documents they will require. (They may have asked to see some of these as part of a pre-qualification process.) Update your portfolio periodically so you’re ready to go as soon as you find a practice. Most banks require some combination of these documents:
- Last five years of tax returns and W2s
- Personal financial statement
- CV/resume
- Past individual production reports
- Recent paycheck(s) – potentially for your spouse, too
- Verification of accounts, investments, and assets
You can also work with a financial planner or wealth consultant to discuss your overall financial health. This professional can help you build a plan to whip your finances into shape and balance competing goals, like paying off student loans and buying a house.
In general, do your homework. Ask about loan repayment programs, particularly if you are interested in working in an underserved area. If you are considering crossing state lines, understand the licensure requirements. Start looking for an accountant who understands dental practices so they can help you interpret the practice’s financials before you name a price.
Dr. Henry: I didn’t tell anyone I was planning to sell
Dr. Henry had been secretly planning his exit for years. Even his office manager of thirty years got only a shrug when she asked about his retirement plans.
He found the perfect buyer at a local chapter meeting. Dr. Roberta was from the city but wanted to buy a small-town solo practice where she could have a good work-life balance. Even though she kept asking if she could meet the staff, Dr. Henry did not think it was a good idea. Instead, she visited the office on a Saturday afternoon.
At closing, Dr. Henry suggested Dr. Roberta come by during the next morning’s team meeting to introduce herself. She arrived bearing coffee and donuts and found the staff sitting in stunned silence. The office manager was crying.
It was awkward for everyone.
The staff felt betrayed. While Dr. Roberta seemed nice enough, she was so young – how could she be their boss? The office manager simply walked out with Dr. Henry and never looked back. One of the hygienists was not far behind. Long-term patients left, and some even confronted Dr. Henry in the grocery store, asking why he hadn’t told them.
Ultimately, the transition was not a success. With production dwindling and staff leaving, Dr. Roberta merged the practice with another three years later.
How to avoid this: Be upfront with staff and patients
When Dr. Henry announced his immediate retirement, no one was surprised that he was ready. After all, he was in his seventies and his wife had health problems. It was the immediacy that frustrated his staff and patients.
His staff wished they could have been involved in the process, or at least met Dr. Roberta before the sale was finalized. Patients weren’t confident in her abilities, and most already knew one of the town’s other dentists socially. Without the ‘endorsement’ of the long-time office manager, the patients simply went elsewhere.
To avoid this, strive for transparency with all involved. Start mentioning your vague retirement timeline early while assuring staff and patients that you are committed to finding the perfect person to carry on the practice. Long-term staff can help the process, from helping spruce up the space to meeting potential buyers during the office tour to make sure they “click.” You can even conduct a treatment planning session with the whole team to demonstrate your confidence in the new doctor’s abilities.
When you find a buyer, write a letter to patients explaining why you are entrusting this new person to lead the practice. Share their credentials and professional background, and even a “fun fact” or two to humanize them.
Don’t let silence sow distrust and fear. In this case, Dr. Roberta never had a chance to prove herself. And the town lost an independent practice.
See how you can retain staff (and, by extension, patients) during and after a transition.
See other posts in our What Went Wrong series!