The lights are dimming, the music rises from the orchestra pit, and the curtains are going up! It is the debut of the prospective buyer of your practice! They just arrived and you’re welcoming them into your office for your first meeting! How exciting!
The first meeting creates a powerful first impression for both of you, so it’s important to nail this one. We need to manage this meeting perfectly so that everyone wins an Oscar.
The play is written, directed and produced by the buyer. It’s their script, agenda, and their production. While at first that may seem like a slight to the seller, but it’s actually a relief for the seller when they figure out that it’s just theirs to lose, and that all the pressure is actually on the buyer.
To these ends, here are my suggestions for everyone’s role in the meeting. These recommendations assume that a practice broker is involved in the process and has prepared all the players for this encounter.
1. Prior to the meeting the broker should have provided a great deal of practice information including financials, management data, and answers to the thousand questions that buyers ask. Buyers should study that information thoroughly so they are not asking for information that has already been provided. Sellers go to great trouble to provide this information and can rightfully be upset when a buyer doesn’t do their homework and wastes their time in asking those questions again.
2. We advise that there is nothing a buyer can’t ask. No question is off-limits. When making an investment in one’s career and future, no stone should be left unturned. An investment of a half million dollars and more requires thorough due diligence, and if answers and information are not forthcoming, it may indicate serious problems. When a buyer is in the process of choosing their career, it is not a time to be shy.
3. Everything is to be kept confidential. Buyers are being trusted with a great deal of sensitive information and should protect it. I had a client that drove all night from Montreal to Raleigh with his family to visit a practice. They stopped at a Denny’s at 5 AM in the morning for breakfast and their waitress asked where they were from, and they told her. She then asked what brought them to Raleigh. He explained that he came to look at a dental practice to buy. She asked whose, and when he told her, she said, “I am his dental assistant.” True story. So, don’t tell a soul anything. Anything.
4. Here’s a big one. Do not discuss the deal, especially the price, with the seller. Seller hire practice brokers to handle those sensitive negotiations. Smart buyers will not risk getting sideways with a seller and losing a great opportunity trying to talk deal points. Deal with the broker on price and other deal points.
1. Remember, it’s the buyer’s show. You’re the audience. It’s their agenda. All you have to do is let the buyer look around and answer the questions you’re able to answer and find answers for ones you don’t know.
2. Resist the temptation to be a salesman trying to sell your practice and give a great sales pitch. It won’t work. This should be a social and professional meeting, not a sales meeting. I had a seller client who opened the door for the buyer and then told the buyer to close it tight when he left and make sure the lock caught and he left the buyer alone to look at the office. The buyer called me 45 minutes later to say that he wanted to buy the office. So much for sales pitches.
3. Buyers are entitled to ask and know anything about the practice. There’s nothing off limits. Don’t be offended or upset about any questions and if there’s anything troublesome, have your broker address it with the buyer.
4. Do not talk business about the sale, especially price. If the buyer brings it up, tell them that they need to talk to the broker about that. That’s why you hired them.
5. Keep all buyer information confidential. Don’t mention their name to anyone, you could get them fired from their job. Buyers are guarding your identity, and you need to do the same for them.
6. Resist the urge to advise the buyer where to live, go to church, send their children to school, and other lifestyle advice.
The play was a huge success. The actors got all of their lines perfectly and put in a great performance, and the meeting went on to a successful sale, based in large part on the successful handling of that first meeting.
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.
