5 Reasons Why FSBO is a No Go
“For Sale By Owner”
FSBO stands for “For Sale By Owner”. Some practice owners believe that FSBO may be a reasonable way to eventually sell their practices.
On the surface, it seems to make sense. You connect with an associate, sell them your practice if things work out and you save brokerage fees.
But, consider this:
1. “Can-do” attitudes:
Business owner psychology experts have identified qualities of business owners that are helpful for operating businesses but that are counter-productive when selling businesses. Because of business owners’ “can-do” attitudes, they are more likely to believe that they can sell their own businesses without an awareness of all the reasons that they should not.
2. Credentialing:
When it comes to education, licensing, experience and continuing education, what practitioner would make the case that these items are unimportant in their vocation as dentists? So, why would practice owners think that it makes sense to manage the sale of their own practices, one of the most important events in their lives, without the education, licensing, credentialing, experience and continuing education that is necessary for a different business than clinical dentistry?
3. Confidentiality:
Prior to closing on the sale of a practice, one of the biggest risks is lack of confidentiality. When practice owners start running ads in dental publications for associates for potential buy-in or for straight out sale, they might as well shoot themselves in the foot. The situation with sellers attending dental association meetings for the purpose of meeting potential buyers is just as bad or worse.. Staff and patients will find out what is going on and staff turnover and patient attrition will result in lower practice value.
4. Contacts:
Most practice owners prefer to sell their practices for the most money to a buyer who is the best fit. This cannot happen without many qualified buyers that a broker can bring to the table.
5. Commissions:
There are sellers who have each given up millions by working directly with sophisticated buyers. In contrast, practice owners who employ qualified brokers find that brokers’ commissions are chump change compared to the loss in sale prices.
Forgo the FSBO
At such a monumental moment in your career, trust an experienced transition advisor so we can each leverage our strengths to get you the best fit at the best sale price.