Selling your dental practice for free is a great idea! Or is it?
Sales agents might offer to sell your dental practice for free, but is this the best idea? Andy Acton explains what it involves.
A dental practice is a prized asset. And quite rightly you will want to ensure you are getting the very best, unbiased advice possible.
The problem is that this is incompatible with selling it for free. When you sell for free, someone must pay the sales agent, and ultimately this is the buyer. So, the buyer is paying the agent who should solely act with your best interest at heart. Are you truly comfortable with this?
It creates a conflict of interest when the buyer is paying the sales agent. Where you pay a fee, it is reasonable you receive a service for this payment. In this scenario a buyer will look to the sales agent for ‘support’ when negotiating the deal.
Selling for free is also misleading, because there is a cost. In any situation, a buyer will have a maximum amount to spend acquiring a practice. So, let’s say this is £500,000 and they could pay the sales agent up to a 5% fee. Therefore the maximum they can offer for your practice is £475,000. If the agent receives £25,000 this must come from the amount available to purchase your practice.
Where you pay the agent, you’d receive the full £500,000, but have to pay the agent yourself, which could well be less than 5%. You have also removed any potential conflict of interest.
Whilst we all love things for free, there is a real danger with such a valuable asset. The video below explores this topic in more detail, with the aim to provide information on this topic so a fully informed decision can be made.
For more information about Frank Taylor and Associates, visit www.ft-associates.com.