During my years in dental practice transition consulting, I was often called in to facilitate a transition that began well, but soon deteriorated into feelings of antagonism and confrontation between the principals. In nearly every one of these cases I could trace the cause of the difficulties to a lack of communication and understanding up front.

Invariably, two dentists—either through a brokered deal or an associate buy-in—reach an agreement in principle on price and payment terms. The prospective buyer then goes to a lawyer to have an agreement drafted. Faced with drafting a purchase agreement in which there are no detailed instructions for anything but the purchase price and the payment schedules, the lawyer often considers only their own client's best interests.

The result is a draft agreement that is almost completely one-sided, which understandably enough the seller's lawyer finds unacceptable. Now it has turned into a legal battle where emotions and bills can run high. Sometimes the sale goes ahead eventually, bruised feelings and all, but it is not uncommon for the stress and anxiety to kill a transaction that had great potential for both parties.

It doesn't have to be this way. All it takes for a smooth transaction and an agreement that satisfies both parties is to think through all the issues in advance and negotiate an acceptable understanding around each of them with the help of an experienced advisor.

This means reaching agreement on the key issues beyond price:

  • Exactly what assets are included in the sale? Which ones are explicitly not included?

  • What about the division of the patient base? If you are buying 50 percent of a practice, how is that being granted to you? How will the balance be equalized over time?

  • What about staff? Who is staying and who isn't? Who is paying severance—and how much—for those that aren't?

  • How is revenue from outstanding accounts receivables after the sale going to be divided?


These are just some of the questions that must be addressed out in the open from the start to make your transition successful.

Another must in my opinion is to enlist the services of a dental practice transition specialist. It's important to seek the advice of someone who is hired by both the buyer and seller jointly in order to support you with your individual advisors as well as the collective goals of the practice. Find someone who knows all the questions to ask and whose mission is to represent the best interests of the deal—for everyone.

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