Prospective purchasers often walk away from a practice purchase because they are unwilling to compromise on a relatively small price difference and, thus, miss the career opportunity of a lifetime.
We picked up the following exchange between students and established practitioners in a student forum, posted on the American Academy of Periodontology website, on the subject of purchasing and setting up your own practice.
A student posed this question to Dr. Nicholas Caplanis regarding his practice purchase.
Given what you know now, what might you do differently?
Dr. Caplanis replied: “There is not much that I would have done differently except that I probably would not have negotiated as hard regarding the practice purchase price. In my personal situation, the original asking price for the practice was approximately $400,000. The final negotiated purchase price was in the mid $300,000 range.
In retrospect, given how successful I have been in this practice, I do not feel that the $50,000 that we were negotiating back and forth is as important today as it was back then.
That amount of money could have been the deal breaker and I could have lost this practice to another buyer who was willing to pay it.
In retrospect, an extra $50,000 for the price of the practice would have not really changed my financial situation that much. My advice, therefore, is “don’t be penny wise and dollar foolish”!”