Episode Summary:

In this episode of the Dental Practice Sale Podcast, Wes Reed dives into a key question for dentists looking to sell their practices: Should you use a broker? Wes offers a fair and balanced breakdown of six compelling reasons to hire a broker and six reasons why it might not be the best fit for every seller. He emphasizes the importance of understanding the process and context around using a broker, whether you’re selling to a family member or a specialized buyer. Wes also shares insights on navigating the matchmaking and closing phases of practice sales and how brokers can provide crucial support — or, in some cases, unnecessary costs.

Key Points:

Why Use a Broker?

• Access to a larger pool of potential buyers (the broker’s Rolodex)
• Expertise in creating an appealing practice prospectus
• In-depth knowledge of the practice sale process
• Brokers act as intermediaries, simplifying communication between parties
• Connection with specialized bankers, attorneys, and accountants
• Brokers are highly motivated to close the sale and get paid only upon completion

Why Not Use a Broker?

• Brokers are highly motivated to close the sale, which may prioritize speed over quality
• Rolodex size and network reach may not always be as extensive as promised
• Brokers may overpromise sale prices to secure exclusivity agreements
• Exclusivity clauses can lock sellers into paying commissions even if the broker does little to close the deal
• Broker fees, typically ranging from 7-10%, can significantly reduce the seller’s final profit

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