Submitting a letter of intent is a big step in the dental practice purchase process. At a minimum, it typically starts a negotiation process that can lead to your buying a practice. But ultimately, it’s the offer you hope gets accepted.
I talked about what a letter of intent should include in an earlier post.
But how do you maximize the chances your submitted LOI is accepted?
I have three tips. All three are minor and relatively easy to do. Each time I see a buyer do all three, it seems to be a powerful way to effectively convey the right message to a seller – that you’re excited to buy and will be a good buyer for their practice.
TIP #1 – TELL THE SELLER WHAT YOU LOVE ABOUT THE PRACTICE
Being positive when submitting the LOI is such a minor thing, but it is so powerful. Pause and think about the context of what’s been happening to this point from the seller’s point of view. They gave access to their tax returns and a bunch of really private info to complete strangers. They likely fielded a question or two about something in those documents. Buyers have been sniffing around and now one looks like they’re interested (you). The broker calls the seller and says she thinks the buyer will submit an LOI soon.
As the buyer, it’s an easy layup to start the submission of the LOI with some really positive, complimentary words. How great would it feel as a seller to open up an email with an LOI attached and read something like:
“I’m so excited to be a potential buyer of this amazing business you’ve spent the last 25 years building. I love <positive element #1> and can tell you put a lot of thought into it for your patients. Looking online and talking to people in the area made it clear that <positive element #2> is really important to you, as it is to me. I can’t wait to continue the tradition of <positive element #3> in your office as it is so important in dentistry.”
Remember the LOI is mostly written in stiff, formal legalese. Yes, it probably contains a number for a large amount of money which will get a seller excited, but there’s more to the psychology of selling a business than the money.
This is likely someone’s pride and joy and certainly their source of income for the last few decades. Acknowledging there is a lot to love about the practice leaves a favorable impression as they consider your offer, potentially leaving them more positively disposed to accept your offer.
TIP #2 – SIGN IT WITH A BLUE PEN
You should print, sign with a blue pen, and scan back in your LOI before sending it over. The blue pen makes it obvious it is your real signature.
Again, this is a relatively minor, psychological point but it tells the seller you put some care and thought into your offer and are a real person. Selling your business can at times feel stiff and formal. A blue signature on a page makes things a little more personal.
TIP #3 – SEND IT TO BOTH THE SELLER & BROKER SIMULTANEOUSLY
If you’re going to offer to pay someone hundreds of thousands or millions of dollars for something, a direct message from buyer to seller (with that positive note about what you love!) is completely appropriate.
Send it to both the broker and seller at the same time. You want to avoid the telephone game and make sure the message you send is received by the seller. You also don’t want to exclude the broker from the conversation.
You’re likely going to be in close contact with the seller through due diligence and any transition that takes place. Making that relationship positive and personal in the beginning can only help your offer be seen in a positive light.
Sure, negotiations might happen. Your accountant and lawyer can have those discussions with their accountant, lawyer and broker. But the positive, happy messages (“I want to buy your awesome practice! I want to write you a gigantic check!”) are nice coming from you.
Remember: until that LOI is signed and accepted, you’ve got nothing.
Sometimes, it’s the little touches that make a big difference in having your letter of intent accepted.
Good luck and thanks for reading!
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