We have just posted a new listing on DentalPlace.ca for a Mississauga dental practice for sale! In a few weeks, we will be eBlasting out the advertisement below to dentists in the GTA concerning this Mississauga dental practice for sale. This practice is being sold through DMC LLP (we represent the seller). If you are a dentist looking to purchase a dental practice somewhere in Ontario, you’ll also definitely want to subscribe to our website to receive the latest information and deals, as it becomes available. We also post things like when we are conducting open houses, when offers are to be submitted by, and when the seller may decide to accept an offer. You definitely don’t want to miss out!
We have just posted a new listing on DentalPlace.ca for a Toronto (Downsview) dental practice for sale! In a few weeks, we will be eBlasting out the advertisement below to dentists in the GTA concerning this Toronto (Downsview) dental practice for sale. This practice is being sold through DMC LLP (we represent the seller). If you are a dentist looking to purchase a dental practice somewhere in Ontario, you’ll also definitely want to subscribe to our website to receive the latest information and deals, as it becomes available. We also post things like when we are conducting open houses, when offers are to be submitted by, and when the seller may decide to accept an offer. You definitely don’t want to miss out!
I am pleased to announce that I (along with Karen Ergus) will be writing an article entitled “Peak Performance Prior to Selling” for the October edition of Oral Health Office Magazine. You can click HERE to read all of our published articles that appear in Ontario Dentist and Oral Health Office magazines.
I am a strong believer that your hard earned money is better kept in your wallet, to spend on things like enjoying high-end tequila / beer / wine, traveling down south or across the world, buying a new house / car, or spoiling the children / grandchildren. And if you agree with me, then why would you decide NOT to put your team members on contract? Why would you decide to negotiate your lease renewal WITHOUT a dental lawyer? And why would you give 10% of the overall purchase price to anyone to find you a buyer? What do these things have to do with money? Everything! Let’s discuss each in turn, shall we?
No Contracts? You’re Wallet is in Jeopardy!
Not having your team members (particularly long-term hygienists, front desk persons, and associates) may cost you thousands when it comes to selling your practice. For starters, the Purchaser will be reluctant to close the deal if there is a lot of build-up employer related liability. The way it works is like this: the longer an employee has been with the owner without a contract, the more notice or payment in lieu of notice the owner (and even a new owner in certain circumstances) will be required to provide to terminate their employment. You can read more about this topic on this blog. In some cases, long-term employees can cost up to 24-26 months of notice (at common law) or 8 weeks of notice (under the Employment Standards Act, 2000). That’s a lot of money.
So how does it play out in real life transactions? Basically, the Purchaser will want a price reduction to offset the risk of having to let employees go after the deal closes. The Purchaser may also want the seller to give promises to pay (e.g. 50% of the termination costs up to a certain date if the purchaser decides to terminate someone).
How could this have been avoided? Introduce new contracts to your employees prior to the sale which limit their ability to come after you or a new owner in the event of termination. It’s best practices to have these contracts in place and they will prevent you (the seller) from having to make financial and other compromises at the last minute to get the deal done. If you want to know more about how to introduce new contracts to your employees WITHOUT getting sued, click on the link above.
With respect to associates, did you know that they can compete, solicit patients who they were the exclusive provider of dental services to, and employees can leave and join them (after giving appropriate notice) if there was NO contract!!! Don’t believe me? Just read this article I wrote on the topic.
Renewing the Lease? Don’t Put Your Bank Account at Risk!
We’ve seen it before. A dentist trusts the landlord. And the landlord sneaks things into the lease renewal agreement that weren’t part of the original lease. Oh, you know… like … if you ever want to sell the practice, you need to pay the landlord 5% of the purchase price… or a demolition clause that allows the landlord to terminate the lease if it wants to redevelop the building into a condo …. or a relocation clause that allows the landlord to terminate … or the removal of an exclusivity clause (because they want to bring in another dentist into the building). We’ve seen it all. Don’t trust the landlord (read this blog about this topic). We’ve seen how one practice appraised for $1-million sold for $540k in large part because of the presence of a demolition clause.
Thinking of Selling through a Third Party? Why Would you Give them 10% of the Purchase Price?
Historically, dentists have paid up to 10% (or more in certain circumstances) to a third party such as a real estate sales person, accountant, consultant, etc. to help them find a buyer. Now, seeing as how it’s the lawyers who put together the Letters of Intent (check out our LOI Wizard on www.DentistLegalForms.com), the Agreements of Purchase and Sale, assist in doing the due diligence / financing, Close the Deal and then deal with post-closing items, why would you even think about paying anyone else to help you with the deal IN ADDITION to already paying your lawyer? Oh, you need help organizing your affairs (e.g. putting your employees on contract or negotiating a lease renewal or incorporating to take advantage of the lifetime capital gains exemption?)? Guess what: you’re going to need a lawyer for those things too! Or maybe you need help finding a buyer and negotiating a deal? Guess what? We can help you with that too (check out our new dental marketplace called www.DentalPlace.ca). And we don’t charge a commission!
Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice, contact me, David Mayzel or Ljubica Durlovska. We are your legal dental team.
Dental Lawyers David Mayzel and Michael Carabash speak to a room packed full of dentists and dental students at Patterson Dental (in Mississauga) about buying a dental practice.
David Mayzel is your legal risk manager. He is a trained courtroom lawyer and has spent many years resolving disputes both in and out of court. He knows how to prepare documents and execute transactions in a way that avoids or mitigates legal risks. He can be reached at 416.528.5280. or email@example.com.
Michael Carabash is your business law adviser. He is an entrepreneur at heart who helps you see the big legal picture. He drafts clear and effective agreements that protect your rights while promoting your interests. He can be reached at 647.680.9530. or firstname.lastname@example.org.
Ljubica Durlovska is your transition lawyer. She helps you with staff and associates, maintaining your corporation, and other business matters. She can be reached at 416.443.9280, extension 206 or email@example.com.
Jonathan Borrelli is your employment lawyer. He helps you with staff and associates matters, including hirings, terminations, switching staff to written contracts and resolving disputes. He can be reached at 416.443.9280, extension 204 or firstname.lastname@example.org.
Benjamin Kong is an experienced business law clerk. He assists David and Michael with corporate matters and purchase / sale transactions. He can be reached at 416.443.9280, extension 207 or email@example.com.
Julie Whitehouse is an experienced business law clerk. She assists David and Michael with corporate matters and purchase / sale transactions. She can be reached at 416.443.9280, extension 203 or firstname.lastname@example.org.
David, Michael, Ljubica, Jonathan, Ben and Julie are a truly dynamic team. Their diverse knowledge, skills, and experiences will help you get the best deal possible while promoting your interests and protecting your rights. You can read dentist testimonials here.