Asking for financial information is a bit like flying on an airplane.
You know that feeling when you’re sitting in an inside seat with a stranger or two between you and the aisle when nature calls or your legs cramp up? You think to yourself, “Oh man, I don’t want to bug these people. I’ll wait until I really have to get up so I don’t have to ask multiple times.”
Then your one barrier to freedom chooses now to take their in-flight cat nap. You wait five…ten… then twenty minutes. Then it feels like you’re a Survivor contestant cramming your feet into a groove and hanging on for dear life.
Every second that ticks by seems to be longer and your need to break free increases exponentially. You think to yourself, “if only I’d asked sooner”.
You know it’s totally reasonable to politely ask if you can scooch on by but for some reason, it feels like the world’s biggest “ask”. This is similar to how it can feel to ask a seller to provide their financial information.
Think of it this way: You’re doing them a favor by taking interest in their practice but it also feels a little bit like an invasion of privacy; it often feels the exact same way for the seller too! However, there is a right way and a wrong way to do this. Don’t feel entitled!
Now, imagine if you were seated next to your mom on the flight. You’d simply tap her shoulder and say “Dear mother, thank you for all your lifetime of sacrifices for me but may I trouble you to let me slide right by you?”…or something like that. Bottom line is, it’s easier because you know her.
Same goes for requesting information from a seller. First, create a personal connection with the seller. When it comes time to request information, it’s easier to ask and obtain that information because that familiarity breaks down a huge physical barrier.
You might ask, “But how do I know if this is a profitable practice before I put the time and effort into this connection?” Simple answer is…you don’t! This may mean that you put some time into looking at a practice that doesn’t meet your financial goals…oh well! Tough luck and onto the next. In the words of Michael Scott quoting Wayne Greztky, “You miss 100% of the shots you don’t take.”
Luckily these recommendations have a natural flow; it’s not rocket science, it’s just like making a friend in high school. First, you chat and get to know them a little (step 1), then they invite you to watch a movie at their house (step 2) and then BOOM, you’re in and now you’re eating lunch at the cool kid table (step 3).
After you’ve made that connection with the seller (step 1), go and visit the office to make sure you like what you see (step 2).
The office visit is an easy yet important step. This is when the seller will give you a very solid impression if a sale is seriously on the table or not.
Usually when the seller is serious, they’ll want to know what your next steps are. This is a great opportunity to tell them what you liked about the practice, how appreciative you are that they opened their doors to you and that you will reach out to your transition team or representative to take the next step (step 3).
When you contact your accountant, tell them about your office visit and ask them what their recommendations are on how to proceed. Your accountant should request a list of documents- tax returns, software production reports, etc.
Once you’ve received that list, forward to the seller an email from an accountant asking for those documents rather than one from you personally. Most dentists feel more comfortable sending those documents to an accountant instead of another dentist. Plus, it just feels more natural!
I know that there is a lot to remember when you’re searching for, assessing and closing on a practice. Remember, I wrote a whole book and have recorded podcasts just on this topic! But there is a common principle that I hope you take away from all these tips: Just because this is a big step, emotionally and financially, doesn’t mean it needs to be complicated.
I promise, if you just take a deep breath, focus on these tips, you’ll draw the attention of the right seller with the right practice and you will have a much smoother transition.