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NO B.S. Guide to Selling Your Company for Top Dollar 121CHAPTER 14 / INTERVIEW WITH STAN KINDER/HW%u00b7V%u0003 H[DPLQH%u0003 KRZ%u0003 WKLV%u0003 GL%u037fHUHQFH%u0003 SOD\\HG%u0003 RXW%u0003 LQ%u0003 D%u0003 UHDO%u0003transaction. The practice in question is a single-site practice located LQ%u0003WKH%u0003FHQWUDO%u0003PLG%u0010$WODQWLF%u0003ZLWK%u0003UHYHQXHV%u0003RI%u0003%u0007%u0015%u000f%u0016%u001a%u0017%u000f%u0013%u0013%u0016%u0003LQ%u0003WKH%u0003%u0014%u0015%u0003months preceding the sale. I%u2019ll tell you the price actually paid by D%u0003'62%u000f%u0003DQG%u0003WKH%u0003H[SHFWHG%u0003SULFH%u0003LQ%u0003D%u0003WUDGLWLRQDO%u0003EDQN%u0010%u00c0QDQFHG%u0003VDOH%u0003to a dentist. With the DSO buyer, the sale closed with $7,275,000 in value being paid to the owner dentist. For the sake of making a strong comparison, let%u2019s assume the dentist buyer was able to VHFXUH%u0003D%u0003ORDQ%u0003DW%u0003%u0014%u0013%u0013%u0003SHUFHQW%u0003RI%u0003UHYHQXH%u000f%u0003%u0007%u0015%u000f%u0016%u001a%u0017%u000f%u0013%u0013%u0016%u0011%u0003$GPLWWHGO\\%u000f%u0003WKH%u0003 SUR%u00c0W%u0003 PDUJLQ%u0003 LQ%u0003 WKLV%u0003 SUDFWLFH%u0003 ZDV%u0003 ZHOO%u0003 DERYH%u0003 DYHUDJH%u000f%u0003 EXW%u0003ZH%u00b7UH%u0003VWLOO%u0003 WDONLQJ%u0003 D%u0003GL%u037fHUHQFH%u0003RI%u0003QHDUO\\%u0003 %u0007%u0018%u0003PLOOLRQ%u0003 WR%u0003 WKH%u0003VHOOHU%u0011%u0003*RLQJ%u0003EDFN%u0003 WR%u0003 WKH%u0003 %u00b4PXOWLSOLHU%u0003H%u037fHFW%u00b5%u0003PHQWLRQHG%u0003HDUOLHU%u00b3LQ%u0003 WKH%u0003'62%u0003 RSWLRQ%u000f%u0003 HDFK%u0003 LQFUHPHQWDO%u0003 GROODU%u0003 RI%u0003 SUR%u00c0W%u0003 ZRXOG%u0003 UHVXOW%u0003 LQ%u0003an increase of a little over $7 in increased purchase price and no increase at all in the dentist buyer option. Even if that dentist buyer was adding capital of his own to the bank%u2019s loan, and he was willing to pay a premium for certain reasons, that sale might, DW%u0003 WKH%u0003 YHU\\%u0003 EHVW%u000f%u0003 EH%u0003 DERXW%u0003 %u0007%u0017%u0003 PLOOLRQ%u0011%u0003 7KLV%u0003 %u00b4PXOWLSOLHU%u0003 H%u037fHFW%u00b5%u0003makes it a no-brainer to spend money to improve your procedure mix, or to get help improving your performance. Let me say that DJDLQffl%u0003,W%u00b7V%u0003D%u0003QR%u0010EUDLQHU%u0003WR%u000363(1'%u0003021(<%u0003RQ%u0003LPSURYLQJ%u0003SUR%u00c0WV%u0011You can easily see that who the buyer is matters greatly. Having said that, a DSO transaction is not for everybody, and not every practice will be attractive to a DSO buyer. The vast majority of DSOs require the seller to commit to a 6-year employment agreement post-transaction. If your goal is to sell and walk DZD\\%u000f%u0003 WKHQ%u0003 D%u0003'62%u0003EX\\HU%u0003LV%u0003QRW%u0003 IRU%u0003\\RX%u000f%u0003QR%u0003PDWWHU%u0003 WKH%u0003%u00c0QDQFLDO%u0003GL%u037fHUHQFHV%u0011DAN: To generalize, this same dynamic exists in most other types of businesses. Who the buyer is and how they are going to pay for the purchase, what they can put together for the purchase, matters. Preview Copy | 43