What You Don’t Know: It Can Hurt You

In previous articles we have discussed the value of practices for both Vendor and Purchaser. Guided by the principle that one owns, makes the Vendor more aware that he has the right to a fair price for the transferable value to a qualified Purchaser, and the obligation to identify and disclose the good, the bad and even the “ugly”. In our experience, Vendors are often unaware of the weaknesses or limitations of transferability in their practice. Value to them may not be value to a Buyer. It is the obligation and responsibility of the Vendor’s broker to uncover defects that can (and do) affect transferability of practice performance and assets unencumbered to any prospective Purchaser. It is also our job to communicate the affect that these may have to the Vendor.

Fear is a primary motivator for everyone and it has proven to keep Vendors from disclosing the “bad” and the “ugly” to prospective Purchasers. Putting lipstick on a pig doesn’t hide the fact that it is a pig. Eventually, everyone will recognize it as such. However, challenge opens the door to opportunity in most instances. When a risk or limitation is identified it offers the Vendor and advisors the chance to be creative in providing strategies and solutions for prospective successors in the practice if these are not able to be corrected prior to marketing the practice for sale. To read the full version of this article, visit the articles section at www.edu-dent.com.