You’re ready to sell your practice and you want the best result possible, so common sense tells you to list your practice with as many brokers as possible. It only makes sense, right? When I am contacted by these sellers, they are often surprised by what I have to say.
My best recommendation for sellers is to interview several brokers and pick the one they trust most. That is, trust them to be the best at their job, trust them to be honest and then give this broker an exclusive listing to sell their practice … even if this broker isn’t me.
Let’s stop and think about this process a moment. First, all buyers are likely to speak to brokers who have a desirable practice, so all brokers will be talking to the same prospects. Why? Because we all fish out of the same pond. You will have three different brokers telling three different stories about your practice to the same prospect. Sometimes, this can leave the prospect confused, and they may well just dismiss your practice and move on. Too many cooks and brokers really do spoil the broth.
This gets extremely complicated when some brokers update the listing with new financials and others don’t. I saw one sale where one broker updated an up-and-coming practice and got a full price offer for it. Then the buyer saw the other broker’s ad with a price that was $100,000 less because that broker failed to update the figures. The outcome was that the seller had to accept the lower price because his other broker advertised it for less.
Why would I want to spend my time, money, and effort to sell a practice only to have the owner or another broker sell it? I would receive nothing but an expense. This is especially true when I have clients who have committed an exclusive agreement to me, and they expect and deserve my commitment in time and effort back. I’m happy to honor that exclusive listing because I know when a sale takes place, I’ll be paid for my efforts.
If you look at a broker’s priority list, the exclusive listings are at the top and non-exclusive ones are on the bottom. When you have an open listing, you will be on the bottom of everyone’s list. You would be better served being at the top of an excellent broker’s list. One with whom you share a sales commitment.
When I used to accept open listings, I discovered I was not only competing with other brokers, but also the owner who had the advantage of bargaining with my commission to get a better price for themselves. I quickly discovered when I competed with my client, I always lost. I did the work, and he got the benefit … so I stopped doing that.
Don’t be surprised when a sale takes place that several brokers will claim that they were the one who brought the buyer to the table, and they all want their commission. Good luck convincing them that you’re not going to pay them.
If you want the best exposure, find a broker with a national access to buyers and who can collaborate with other brokers. I have shared commissions with other brokers who referred a client and was able to maintain all the advantages of an exclusive listing while getting the greatest exposure to buyers. But there’s no question that sellers and brokers get the most benefit when there is only one captain of the sales ship.
Earl M. Douglas, DDS, MBA, BVAL, began his transition career in 1982 after selling his own dental practice. Currently, Dr. Douglas’ company, ADS South, LLC, provides consulting services in the Southeast, from Louisiana to Washington, D.C. His in-depth experience in both dentistry and business provides you with experience you can trust. Furthermore, he has the understanding of the area, dental networks and brokerages.
