After building a successful dental practice in his Kansas hometown over the past 35 years, Dr. Jackson decided it was time to step back from clinical dentistry and explore the next chapter of his life. Like many of his peers at this pivotal moment, he was faced with a complex yet crucial decision: how to sell his dental practice.
Initially, Dr. Jackson consulted with a dual representation broker who serves both the buyer and the seller in dental practice transactions. However, after delving into the potential implications of such an arrangement, Dr. Jackson grew increasingly uneasy with the concept. His primary concern was the conflict of interest inherent in dual representation: could one broker truly advocate equally for both parties involved? He feared that his interests, cultivated over decades of dedication to his practice, might not get the attention they deserved.
Further concerns piled up, including issues of confidentiality, expertise, and transparency. With the sale of his practice being the most significant transaction of his professional career, Dr. Jackson was determined to avoid mistakes that could jeopardize his legacy. Ultimately, he decided that a dual representation brokerage setup didn’t feel quite right for such an important deal.
As he explored alternatives, Dr. Jackson was drawn to Transition Professionals offering dedicated representation that champion only the practice owner. This approach meant that any professional he worked with would be fully aligned with his goals and objectives throughout the sales process.
As Dr. Jackson moved forward with this vital career transition with DDSmatch, he considered several risks associated with dual representation brokerages that solidified his decision:
1. Conflicted Interest
One of the biggest risks of dual representation is that the broker’s divided loyalty might lead to prioritizing one party’s interests over the other. Dr. Jackson was concerned that his lifelong work could be compromised for the sake of appeasing both parties.
The main goal for sellers is to capture the practice’s full selling price, while buyers aim to minimize the final cost. A dual broker faces the challenge of balancing these competing objectives in an effort to simply finalize the deal. This conflict can create terms that don’t meet the needs or financial goals of either the buyer or the seller. A compromised deal often leads to frustration or unmet financial expectations after it’s too late to reverse course.
2. Reduced Advocacy
A dedicated broker has the motive and capacity to champion Dr. Jackson’s best interests, aggressively negotiating on his behalf. Dual representation could dilute such advocacy, leading to less favorable transaction terms.
Advocacy is vital in any transaction, especially when it involves a significant financial investment acquiring or selling a dental practice. In dual representation, the broker is stuck between two competing interests as they walk the middle ground. This balancing act can result in a lack of advocacy for either side since the broker’s goal is to simply close the deal.
3. Transparency Issues
Dr. Jackson needed a broker who could provide clear insights and open communication about every aspect of the deal. In a dual representation scenario, the risk was that the broker might withhold crucial information that could potentially derail the process or alter the decision-making dynamics. The broker is hearing two stories from two different camps and they must filter what they share back and forth. The dynamics often become messy, and it can be difficult for both the buyer and seller to decipher what’s accurate.
4. Compromised Confidentiality
Selling a dental practice requires the discreet handling of sensitive information. With dual representation, there is an increased risk of confidential information leaking to the buyer, which could affect negotiations or practice valuation.
In dentistry, confidentiality underscores relationships with your patients and forms the basis for trust. In a sensitive business deal, any compromise in trust leaves questions and potential resentment. Aligning with a DDSmatch Transition Professional solidifies a confidential relationship that helps you move towards the sale you envision.
5. Pressure to Finalize the Transaction
Dual agents might prioritize closing a deal over getting the best outcome for the seller; their ultimate goal is to satisfy both parties to earn their commission. This pressure could rush Dr. Jackson into decisions without fully considering all their implications.
The rush to close can harm first-time buyers or sellers who rely on the broker’s guidance. The complexities of the transaction might not be fully explained, and critical details might get skipped over in the interest of closing the sale quickly.
Putting Together A Successful Dental Practice Transition
Given these considerations, Dr. Jackson felt more confident choosing a partner whose sole responsibility was to represent his interests. This decision allowed him to move forward with selling his dental practice with confidence with a DDSmatch Transition Professional by his side. He felt greater assurance that the final transaction would respect and reflect the value of what he had built over 35 years.
For dentists in Kansas and across the country who are considering this significant transition, Dr. Jackson’s scenario underscores the importance of selecting the right representation. It’s crucial to review both the risks of dual representation and the benefits of opting for an exclusive partner to help you navigate the dental practice transition process. At DDSmatch, we’re Transition Professionals who will focus solely on your side of the deal, protect your interests, and honor your legacy. It all starts with a conversation, so reach out to chat about your goals today!