CONSIDERATIONS

PRACTICE BROKER

PARAGON

Qualifications to handle the unique aspects of a dental practice transition.

Most are limited with no formal training in the specialization necessary to handle a dental practice transaction. Often limited to simple practice sale/acquisition transactions only. Frequently experience is limited to standard, routine business sales.

Specialized programs specifically designed for the dental profession. Each dental practice transition is handled by a national team of transition experts including dentists, accountants, attorneys, tax experts and business experts. Sale and Co-Ownership programs are based on thousands of clients and transactions.

Available Resources

Local, limited scope often requiring the assistance and additional cost of an attorney and/or accountant

National network of experienced experts able to provide a turn-key transaction without the added expense of special advisors.

Available Options

Typically limited in scope to that of a routine practice sale.

Wide range of options based on a comprehensive needs analysis. In addition to the routine practice sale, PARAGON offers PreSales; deferred sales; mergers; co- ownerships; consolidations; relocations; equity associateships and estate programs.

Practice Valuations

Cursory at best and very often far removed from the actual fair market value of the practice. Often a guestimation since negotiation will determine the final price.

Extremely comprehensive financial and practice analysis. Fair Market Value determined by a team of experts with vast completed transaction experience resulting in highest possible sales price.

CONSIDERATIONS

PRACTICE BROKER

PARAGON

Client Representation

Unilateral representation that generally results in an adversarial transaction. While attempting to only represent the seller, the seller regularly sacrifices equity value to get the deal closed.

Mutually rewarding dual representation to complete a “win/win” transaction. PARAGON’s independent third-party role of representing all parties results in a non-negotiated, equitable transaction.

Confidentiality

The practice is typically sold by presenting the opportunity to as many prospective buyers as possible (qualified and non- qualified). This results in the seller being introduced to many potential buyers with the hopes that one will possibly be the right match (the “spaghetti theory” of throwing as many prospective buyers against the wall as possible in the hopes that one will stick). It is not unusual for a seller to be subjected to dozens of calls and practice visits (most of which are merely “tire kickers”). Maintaining confidentiality is next to impossible.

All PARAGON practice opportunities are coded. Buyers are pre-qualified before introduction to a seller eliminating the seller’s need to waste time on unproductive visits with “tire kickers.” PARAGON does not reveal the seller’s name or the practice location to any potential buyers until the buyer has proven both an ability and desire to acquire the practice based on the financial opportunity AND only after revealing the buyer’s name and discussing qualification with the seller first. Your staff and your colleagues will know you are selling your practice when YOU decide the timing is right. Confidentiality is critical.

Contracts

Many brokers do not provide contracts at all but rather require the clients to arrange for contracts to be drafted through the client’s attorney. If a practice broker does provide a draft contract, the contract is typically a standard, fill in the blank, boiler-plate contract that requires considerable alteration to accommodate the specifics of your transaction.

PARAGON’s initial draft contracts have been developed based on thousands of actual practice transitions. The initial draft is then customized to take all aspects of your specific transaction into consideration including, but not limited to, the income tax consequences of the sale for each party. PARAGON also provides each client with a plain language summary to explain the more complicated sections of the legal document. PARAGON also conducts a contract review with each client that provides each party with a clear understanding of the contracts. This allows each party to better explain the inner workings of the transaction to their advisors.

CONSIDERATIONS

PRACTICE BROKER

PARAGON

Method of Operation

List the practice by typically assigning a indeterminate, negotiable selling price; advertise for any possible buyer (confidentiality generally takes a back seat to finding bodies); once a potential buyer is located, the transaction is generally turned over to the attorneys and accountants to hammer out the details and the final agreement (unfortunately this process generally has to be repeated several times before a sale is finalized).

No cost initial consultation to determine needs and goals; comprehensive analysis to determine viable options and non- negotiable sales price and terms; set non-negotiable income tax allocations of the sales price so the seller may keep as much of the sales proceeds as possible; pre- screen buyers for qualifications with only serious, qualified buyers being introduced to the seller; carefully match the buyer to the practice opportunity so neither the buyer’s or the seller’s time or money is wasted on dead ends; provide professionally drafted initial draft of sale and acquisition agreement and summary; assist the buyer in obtaining the required financing; run interference to negotiations and the normal illogical emotional actions and reactions (our clients typically never know about the emotional outbursts of the other party since we are able to solve the potential problem before it ever becomes a problem).

Final Selling Price

The listed price is rarely the selling price as negotiations will almost always result in a sale being consummated at a much lower price than the listed price.

PARAGON lists at a non- negotiable selling price, non- negotiable financing terms and non-negotiable tax allocations. It is interesting to note that PARAGON’s selling price is often 10% to 25% greater than the original price that a broker establishes (and the broker’s price is frequently negotiated down prior to closing).

Transaction Fees

Full broker fee (generally 10% of the selling price) plus the cost of your attorney and accountant.

At 7%, PARAGON’s dual representation seller fee is 30% less than a broker’s fee alone. In addition, most PARAGON clients invest far less with outside advisors as the comprehensive “turn-key” nature of our operation often eliminates the need.

CONSIDERATIONS

PRACTICE BROKER

PARAGON

Success Rate

Success rate less than 50% due to adversarial negotiations and the vast number of non- qualified buyers encountered.

Over a 98% closure success rate.

Post-Sale Client Relationships

Often compromised with serious hard feelings generated by the extremely adversarial, negotiating process.

Superior post-sale working relationships free of tension and hard feelings. The PARAGON process shields clients from the adversarial aspects of a practice sale and acquisition.

Post-Sale Support

Typically none.

Ongoing and continuous, as needed.