Selling Archives - American Practice Consultants

Understanding Restrictive Covenants When Selling Your Dental Practice

What Happens After You Sell?

When selling your dental practice, you’re not just transferring equipment, charts, and lease rights—you’re also selling your goodwill: the patient loyalty, brand reputation, and trust you’ve built over time.

That goodwill is one of the most valuable assets in the sale—and it’s why restrictive covenants are a standard part of most dental practice transactions.

In this post, we’ll break down what restrictive covenants are, why they’re essential to protecting the buyer’s investment, and what sellers need to consider before signing.

What Is a Restrictive Covenant?

A restrictive covenant is a legal agreement that limits a seller’s ability to compete with the practice after the sale. In dental transactions, this typically includes:

A non-compete clause (restricts practicing within a geographic radius)
A non-solicitation clause (prevents the seller from recruiting patients or staff)

These provisions are intended to preserve the value of the practice by ensuring patients and staff remain loyal to the new owner.

Why Restrictive Covenants Protect Goodwill

In most dental practice sales, goodwill makes up the majority of the purchase price. Goodwill includes:

The seller’s reputation and patient relationships
Long-term recall systems and preventive care schedules
Referrals and local professional credibility

If a seller opens a new office nearby or takes patients to another practice, the buyer’s investment is immediately undermined.

Restrictive covenants provide legal protection to ensure that goodwill stays with the practice—not the seller.

What’s Typical in Dental Practice Sales?

Covenant Type	Common Terms
Non-Compete	5–10 mile radius for 3–5 years
Non-Solicitation (Patients)	2–3 years
Non-Solicitation (Staff)	1–2 years
Carve Outs	May allow the seller to teach at a local school or cover another local dentist in an emergency or during vacation for a liminted number of days per year.

These terms can vary based on practice location and local competition. Urban practices may use a smaller radius (e.g., 3 miles), while rural ones may require 15 miles or more.

Key Points Sellers Should Be Aware Of

Know What You’re Agreeing To

Don’t assume the non-compete is “standard.” Review:

The geographic scope: Does it reflect realistic patient draw?
The duration: Is it longer than your transition period or consulting agreement?
The definition of “practice”: Does it restrict teaching, consulting, or part-time work?

Clarify Post-Sale Roles

If you plan to:

Continue working part-time
Teach at a dental school
Join a spouse’s or child’s practice elsewhere

… be sure these activities are clearly permitted and carved out from the covenant.

Understand Enforcement

Restrictive covenants are enforceable in most states if they are reasonable in scope and duration. Courts typically uphold them if they are:

Clearly written
Narrowly tailored to protect legitimate business interests
Consistent with state laws and public policy

Tip: Your attorney should review the covenant to ensure it’s both fair and enforceable.

Restrictive Covenants Are a Sign of a Serious Deal

Some sellers feel uneasy about signing a non-compete—but it’s important to understand that buyers (and lenders) expect these protections to be in place.

In fact:

Many lenders require restrictive covenants to fund the loan.
Buyers will walk away from deals that don’t protect their investment.
Well-structured covenants make the deal stronger, not riskier.

Protect the Deal—And Your Legacy

A restrictive covenant isn’t just a legal formality—it’s a vital tool that protects the value you’ve worked so hard to build. When structured fairly, it allows you to step away from practice ownership with confidence while giving the buyer peace of mind.

At American Practice Consultants, we help sellers understand every part of the deal—not just the numbers. That includes structuring restrictive covenants that are reasonable, enforceable, and aligned with your personal goals after the sale.

Thinking About Selling? We Can Help.

Let’s start the conversation. We’ll walk you through the selling process, help evaluate your practice, and ensure your transition agreement—including any restrictive covenants—works for both parties.

📞 Contact us today for a confidential consultation.

The Emotional Side of Selling Your Dental Practice: What No One Tells You

It’s More Than Just a Transaction

When most dentists prepare to sell their practice, they focus on tangible things:

Valuation
Financials
Patient retention
Transition planning

All of that matters. But there’s another side to this transition that often takes sellers by surprise:

The emotional side.

Selling a dental practice is not just the end of a business—it’s the end of a personal era. In this post, we explore what many dentists feel (but rarely talk about) during and after the sale of their practice, and how to prepare for the shift in identity, purpose, and routine.

Letting Go Is Harder Than You Think

Even if you’re excited to retire or pursue something new, many sellers feel a sense of grief or disorientation after closing.

Why?

Because for decades, your identity may have been tied to:

Being “Dr. Smith” in your community
Leading your team
Solving clinical challenges daily
Running your own show

When that suddenly stops, it’s natural to feel a void—especially if you didn’t fully anticipate it.

Your Practice Is Personal, Not Just Professional

Unlike selling a piece of real estate or a stock portfolio, your practice is:

Where you built patient relationships over years or decades
A team you hired, mentored, and led
The culmination of your clinical philosophy and work ethic

Buyers see numbers. You see memories.

Recognizing this emotional attachment doesn’t mean you shouldn’t sell—it means you should be prepared for what that moment will feel like.

You Might Feel Protective of the Buyer—And the Staff

It’s common for sellers to feel anxious about:

Whether the new owner will uphold your standards
How your staff will be treated
Whether patients will receive the same quality of care

These concerns are real—and normal. They can be addressed through:

Careful buyer screening
Transition support agreements
Clear communication with your team and patients

Tip: Framing the sale as a “continuation of care” rather than a “handoff” can help everyone feel more at ease.

What Will You Do on Monday Morning?

After the sale closes and the transition period ends, many retired or semi-retired dentists face an unexpected question:

Now what?

Without the routine of running a practice, some feel restless or uncertain. That’s why it’s important to plan ahead for:

Hobbies, travel, or volunteering
Consulting or part-time work
New learning opportunities or mentorship roles

Think of this phase as a new chapter—not an ending.

You Deserve to Celebrate Your Career

Too often, sellers rush through closing without taking time to reflect on everything they’ve built. Selling a practice is not just about moving on—it’s about honoring your impact.

Consider ways to celebrate:

A small thank-you event for your staff
A personal letter to long-term patients
A written legacy plan for the new owner to carry forward

These touches aren’t just sentimental—they reinforce continuity and help everyone (including you) find closure.

Prepare Your Mindset, Not Just the Numbers

Selling your dental practice is both a business and a personal transition. The more emotionally prepared you are, the smoother—and more fulfilling—the process becomes.

At American Practice Consultants, we guide sellers through every aspect of the sale—including the parts that aren’t in the contract.

Thinking About Selling? Let’s Talk.

Whether you’re ready now or just starting to explore options, we’re here to help you prepare both strategically and emotionally.

📞 Contact us today for a confidential consultation and find out how to move forward with clarity and confidence.

What Dentists Are Looking for When Buying a Dental Practice

What Drives Dentists Toward Ownership?

For many dentists, practice ownership is the ultimate goal. It’s the path to autonomy, increased income, and the opportunity to shape a business that reflects their values and clinical philosophy.

But once a dentist decides they’re ready to buy, what exactly are they looking for in a practice?

In this post, we’ll explore the key factors dentists consider when evaluating dental practices for purchase, and how sellers can position their practices to meet buyer expectations.

1. Location, Location, Location

A great practice in the wrong location can be a dealbreaker. Dentists typically look for:

Proximity to home or preferred lifestyle areas
Growing or stable population demographics
Good visibility and parking access
Reasonable competition in the area

Tip for Sellers: Highlight community amenities, patient demographics, and referral relationships when marketing your practice.

2. Strong, Loyal Patient Base

Buyers want to walk into a practice with steady revenue and consistent patient flow. They look for:

Active patient count over the past 12–24 months
New patient acquisition trends
High patient retention rates
Patient base with favorable insurance mix or fee-for-service ratios

What Helps: Sharing KPIs like recall rates, patient attrition, and appointment backlog can demonstrate practice stability.

3. Healthy Financial Performance

Ultimately, the financials drive the decision. Dentists often request:

3–5 years of profit and loss statements
Collections and net income trends
Overhead breakdown
Salaries, lab costs, and rent structure

Practices with clean books, consistent earnings, and 55–65% overhead are especially appealing.

Bonus: Sellers who clearly separate owner compensation from practice profit make it easier for buyers to understand true earnings potential.

4. Modern Equipment and Digital Systems

While not every buyer expects the latest technology, most dentists appreciate:

Digital X-rays and intraoral cameras
Paperless records / practice management software
Well-maintained chairs, compressors, and sterilization units

Outdated equipment isn’t always a dealbreaker, but it can affect pricing—or lead buyers to factor in upgrade costs.

5. Growth Potential

Dentists want practices with room to grow, whether through clinical expansion or operational efficiency. Key indicators include:

Procedures currently referred out (e.g., implants, molar endo, ortho)
Available space for an additional operatory
Marketing opportunities not yet explored
Limited evening or weekend hours that could be added

Smart Sellers: Frame untapped opportunities as upside, not shortcomings.

6. Strong Staff and Office Culture

A committed, well-trained team is a huge asset. Buyers want to see:

Long-term employees with patient rapport
Low turnover
Positive workplace culture and team dynamics

When possible, buyers often want to retain staff to help ensure a smooth transition and patient continuity.

7. Favorable Lease or Real Estate Terms

If the practice doesn’t own the building, the lease becomes part of the deal. Buyers look for:

Assignable lease with multiple renewal options
Reasonable rent-to-revenue ratio (ideally under 7–9%)
Option to purchase the real estate in the future (preferred by many buyers)

If the seller owns the building, clarity about purchase or lease terms can be a major selling point.

8. Smooth Transition Plan

Most buyers aren’t just looking at the numbers—they’re looking at the human side of the transition too.

They value:

Willingness of the seller to stay on temporarily if needed
Help introducing patients and staff to the new owner
Assistance navigating insurance credentialing and business setup

Practices with well-thought-out transition strategies are more attractive and less risky.

In today’s market, dentists ready for ownership are looking for financially sound practices with strong patient relationships, growth potential, and minimal friction during transition.

If you’re a seller, aligning your practice with these buyer priorities—and working with an experienced dental broker—can make your practice more attractive, speed up the sale, and help you command top value.

Are You Ready to Sell—or Looking to Buy?

At American Practice Consultants, we help dentists across New Jersey and Eastern Pennsylvania connect with the right buyers and sellers. Whether you’re preparing your practice for sale or actively seeking the perfect acquisition, our team will guide you through every step.

📞 Contact us today for a confidential consultation and take the next step toward ownership or retirement.

Should You Upgrade Your Dental Office Before Selling?

One of the most common questions we hear from dentists preparing to sell their practice is:

“Should I upgrade my dental office before putting it on the market?”

While a modern, updated space can attract buyers and boost perceived value, renovations can also be costly and may not guarantee a full return on investment.

In this post, we’ll break down the pros and cons of upgrading your dental office before a sale, helping you decide what’s worth updating — and what’s best left for the buyer.

Why Office Upgrades Matter to Buyers

Today’s buyers, especially younger dentists, often look for practices that offer:

A clean, modern aesthetic
Digital workflows and paperless records
Updated operatories and equipment
Efficient patient flow and space utilization

However, not all upgrades are created equal — and timing, budget, and local market conditions should all factor into your decision.

🔍 Pros of Upgrading Your Dental Office Before Selling

1. Boosts First Impressions and Buyer Interest

A fresh, updated office often generates more buyer interest — and can result in quicker offers.

Aesthetic upgrades like paint, flooring, and lighting create a clean, inviting feel.
Updated waiting areas and operatories make the space feel turn-key.

2. May Increase Perceived Value

Even minor improvements can make your practice feel higher-end and help justify your asking price.

Digital x-rays, intraoral cameras, and electronic health records signal a modern, efficient practice.
Cosmetic changes can make outdated spaces feel refreshed without a major renovation.

3. Can Improve Operational Appeal

Upgrades that improve patient flow, accessibility, or operatory function enhance the business case for buyers — especially if they plan to step in and start treating patients immediately.

⚠️ Cons of Upgrading Your Dental Office Before Selling

1. High-Cost, Low-Return Risk

Large-scale renovations or new equipment purchases may not generate a dollar-for-dollar return.

A $100,000 remodel could only boost value modestly depending on your market.
Some buyers may prefer to remodel themselves and see recent upgrades as a sunk cost they didn’t choose.

2. Disruption to Business Operations

Renovations can lead to downtime, patient inconvenience, or delayed appointments — which can negatively impact your revenue and reputation during a critical period.

3. Shifting Buyer Preferences

Not all buyers have the same taste or priorities. What you perceive as an improvement may not align with the buyer’s vision — especially when it comes to décor or equipment brand preferences.

What Should You Upgrade? (High-Impact, Low-Risk Improvements)

If you want to make your practice more marketable without overspending, focus on cosmetic and functional upgrades that offer strong ROI:

Upgrade	Estimated Cost	Benefit
Fresh paint in neutral colors	Low	Brightens space, modern feel
New flooring (LVT or tile)	Moderate	Clean, contemporary impression
Updated lighting	Low–Moderate	Enhances office ambiance
Decluttering/depersonalizing	Free	Makes space feel larger, turn-key
Deep cleaning of carpets, furniture	Low	Improves first impressions
Repairing wear and tear (doors, cabinets)	Low	Reduces buyer hesitation
Updating signage (if needed)	Low	Enhances curb appeal

Tip: A clean, well-maintained space shows pride of ownership and reassures buyers that the practice has been well cared for.

What to Avoid Upgrading Before Selling

Upgrade	Why to Avoid
Full remodels or major construction	High cost with limited ROI; disrupts operations
Brand-new dental equipment	Buyers often have personal preferences or vendor contracts
Rebranding (logos, colors, themes)	May conflict with the buyer’s desired image
Adding new technology last-minute	ROI is questionable if you’re not using it before sale

Instead, disclose aging equipment or outdated systems honestly and price the practice accordingly.

How We Advise Our Sellers

At American Practice Consultants, we work closely with dental practice owners to evaluate:

Current office condition
Market trends and buyer expectations
Budget-friendly improvements that maximize value

We help you balance investment with impact, ensuring that every dollar spent supports your sale.

Should you upgrade your dental office before selling? It depends.

Smart, cosmetic improvements can make your practice more attractive to buyers — but costly renovations or new equipment are rarely necessary and may even backfire.

The key is knowing what to improve, what to skip, and how to present your practice in the best possible light. A dental practice broker with local expertise can help guide your decision and develop a transition plan that protects your time, money, and practice value.

Ready to Sell Your Dental Practice?

Let us help you prepare your office and your business for a successful sale. Contact American Practice Consultants today for a confidential consultation and market assessment in New Jersey or Eastern Pennsylvania.

Why Confidentiality is Critical When Selling Your Dental Practice

Selling a dental practice is a major decision, but it’s also a sensitive one. From staff morale to patient retention, the process must be handled with discretion to avoid unnecessary disruptions. This is where confidentiality plays a vital role.

In this guide, we’ll explore why confidentiality is essential when selling a dental practice, the risks of mishandling sensitive information, and how brokers protect your interests throughout the process.

Why Confidentiality Matters in Dental Practice Sales

Protecting Patient Trust

Patients choose your practice not just for its services but for the relationships they’ve built with you and your team. If patients learn prematurely about the sale:

- They may feel uncertain about the continuity of care.
- Some may decide to leave the practice, reducing its value.

Tip: A smooth transition with clear communication after the sale can reassure patients and maintain their loyalty.

Maintaining Staff Morale

Your staff is one of your practice’s most valuable assets. Premature disclosure of a sale can:

- Cause anxiety about job security.
- Lead to key staff members leaving before the transition.

How Confidentiality Helps: By keeping the process discreet, you can plan the right time and way to inform your team, ensuring a seamless transition.

Preserving Practice Value

If news of a potential sale leaks, it can affect your practice’s perceived stability. Competitors might try to take advantage, and patient attrition can hurt your valuation.

Example: A high-performing practice with stable patient retention is far more attractive to buyers than one experiencing turmoil due to rumors of a sale.

Risks of Breaking Confidentiality

Failing to maintain confidentiality can lead to:

- Patient Attrition: Patients may leave if they fear changes in care quality.
- Staff Turnover: Key employees may seek other opportunities if they feel uncertain about their roles.
- Competitor Interference: Competitors may target your patients or staff, weakening your practice before the sale.

Case Study: A dentist decided to pursue a “for sale by owner” approach to selling their practice, and publicly listed their practice without confidentiality measures. This staff resignations and a 20% drop in patient volume. The eventual sale price was significantly lower than expected due to these disruptions.

How Brokers Ensure Confidentiality

Anonymous Marketing

A professional broker uses anonymous listings to market your practice. These listings highlight key details without revealing identifying information such as:

- - The practice name.
  - Exact location.
  - Specific patient demographics.

Non-Disclosure Agreements (NDAs)

Brokers require potential buyers to sign NDAs before sharing sensitive details about the practice. This ensures that only serious, qualified buyers access confidential information.

Screening Qualified Buyers

Brokers vet buyers to ensure they have the financial capacity and genuine interest in purchasing a practice. This reduces the risk of sensitive information being shared with competitors or unqualified individuals.

Controlled Communication

Brokers act as intermediaries, managing all communications between the buyer and seller. This ensures that:

- The process remains professional and discreet.
- Sellers retain control over what information is shared and when.

When and How to Share Information

There comes a time in the sale process when you’ll need to inform staff and patients. Here’s how to do it effectively:

1. Timing is Key

- - Staff: Inform your team once the sale is finalized or when a transition plan is in place.
  - Patients: Notify patients shortly before the transition, emphasizing continuity of care.

1. Crafting the Message

- - Reassure both staff and patients that the transition will be seamless.
  - Introduce the new owner as someone committed to maintaining the practice’s standards and values.

1. Use Positive Framing

- - Present the sale as a step forward for the practice, ensuring all parties feel confident about the future.

Why Choose Us?

At American Practice Consultants, we prioritize confidentiality at every step of the dental practice sale process. Our expertise ensures:

Secure Transactions: Your practice’s information remains private and protected.
Stress-Free Transitions: We help you craft a communication strategy for staff and patients to ensure a smooth handover.
Local Market Knowledge: With deep expertise in New Jersey and Eastern Pennsylvania, we connect you with serious buyers who align with your goals.

Conclusion

Maintaining confidentiality is critical when selling your dental practice. By protecting sensitive information, you can preserve patient trust, staff morale, and practice value, ensuring a successful and profitable sale.

Ready to take the first step? Contact us today for a confidential consultation and learn how we can help you sell your practice discreetly and effectively.

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Category Archives: Selling