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“March Madness” – How Sellers Can Take Advantage

By January 5, 2024January 8th, 2024Selling A Practice

Thinking of selling?  You should know about and try to take advantage of “March Madness“.  There’s something about the changing of the seasons that brings the buyers and sellers out to greet one another.  We’ve historically seen and helped our dentist sellers achieve the best possible results when they list their practices for sale in the Month of March (also: October, which we call “Octoberfest”).  Here’s a timeline of how things play out to take advantage of March Madness:

  1. Assemble Your Legal Team ASAP and YEARS in advance!   We at DMC get involved very early on in helping dentists with their sales.  This includes reviewing and trying to work on things like employment agreements, lease, and tax-planning.  This often takes months or sometimes years to plan in advance of a sale. Trust me: you don’t want to be waiting until you’ve got a buyer in hand and are trying to close the deal only to be told that the employees, lease or corporate sale structure is problematic and could take months – or even years – to fix.  Here are some examples: there are 7 years left on the lease with no further options to renew.  The dentist gets an appraisal and then puts the practice on the market and a buyer comes forth.  But when a request is made to the landlord – after a lot of time, money and effort has already been spent – to transfer the existing lease to the buyer WITH an additional 5 year renewal term added on (so the buyer can get financing over 12 years which is the norm these days), the landlord says: NO or NOT WITHOUT $$$$ and PERSONAL GUARANTEES FROM EVERYONE!  Ouch!  How could this have been ameliorated?  Well, we at DMC would have consulted with the landlord early on to find out if they were OK with adding more years to the lease.  It’s in the landlord’s interest to have a long-term paying tenant there (and paying presumably higher rental rates), so they should entertain adding more years.
  2. We Lawyers Assemble Your Due Diligence MONTHS before March: since we lawyers draft all the legal paperwork for your transaction (on behalf of the seller), we know what kinds of due diligence items the buyer and their professional team of lawyers, accountants, and bankers will want to see to be satisfied with the acquisition. First, there are financial statements and production reports by provider and procedure for the last few years. We need employee contracts and associate agreements (if any).  We also need your lease documents.  And your HARP reports for the last few years and your X-ray floor plans.  And we also need your corporate documents (minute book, resolutions, share certificates, director and officer and shareholder registries, etc.).
  3. Start The Appraisal in December: Matt Bladowksi at Dental Strategy is a great option for getting a comprehensive appraisal in 4-6 weeks that will help out tremendously during due diligence and be accepted by the banks. Assuming you have a fiscal year end of December 31st, you can always provide those financial statements to Matt and his team in Jan or Feb – just in time for him to finish up and give us the appraisal to run an open house in March!
  4. We Market the Practice in March: we put up a listing of your practice on and send out some eBlasts about your practice to thousands and thousands of dentists (without identifying you or your practice – we don’t use your name, address or real photos).  Note: the dentists who receive your actual Dental Strategy appraisal have signed confidentiality agreements with us.  They can attend the open house in person on a Sunday when the practice is closed.  We try to answer questions that they may have that aren’t covered in the appraisal, they can see the office, and we also take a video walkthrough to provide to those who aren’t able to attend.
  5. Closing the Sale: if everything is organized properly – meaning we lawyers at DMC have organized all due diligence items, drafted the legal paperwork, marketed the practice and negotiated an offer with a prospective buyer – then we have to work equally hard to now CLOSE the deal.  This involves getting through due diligence, the buyer getting bank financing, the landlord consenting to an assignment of the lease, and doing all the closing document prep work.  There are so many moving parts and 99% of dentists don’t appreciate that it’s us lawyers who have to manage the whole thing from start to finish (not your accountant, not any real estate agent – who you don’t need as part of your sale, not your banker, etc.).  Given that it typically takes 3-6 months from the time you start the sale process (i.e. marketing the practice for sale in March) to actually selling and closing and getting a cheque in your hand, you’d be looking at finalizing everything by the summertime.  Just in time to come one one of our dental mission trips to the Caribbean to give back – either by supervising some dental students or by working alongside private practitioners in a big 20 op clinic in Grenada, Jamaica, Turks & Caicos, or St. Lucia.
  6. Associating Post-Closing: after the sale, we typically recommend that dentists stick around to associate to assist with a transition for up to 2 years. Why? Because the buyer will typically have 2 years after the sale to complain about something they discovered in the sale process.  But if the seller agrees to stick around for a 2 year transition – even at a reduced work schedule with lots of time off – then the chances of there being problems (e.g. patients not coming in or production dropping because the principal dentist isn’t there or staff leaving ,etc.) are significantly reduced.

So if you want to take advantage of selling your dental practice during March Madness, get in touch with Michael Carabash ( | 647.680.9530).  We sell practices all across Ontario.

The Content of this post is provided for informational purposes only. It is not intended to be legal, financial, tax, or other professional advice of any kind. You are advised to contact DMC (or other counsel) to seek specific legal advice concerning your individual situation.