In this article, recently published in Private Dentistry Magazine (November 2019 issue), Andy Acton breaks down the process of choosing and buying a practice in nine simple steps.
It was Benjamin Franklin that so succinctly said ‘By failing to prepare, you are preparing to fail.’ This is so relevant when looking to buy a dental practice.
So often viewing a dental practice is seen as the first session step towards practice ownership. Indeed, it is a critical step, but some firm foundations need laying well before this time. Below is a 7-step guide to successfully acquiring a dental practice.
Step 1: Decide where in the country you want to buy. This is your biggest decision as this will drive everything else. There is no point in viewing practices on the south coast because they match 5 of your criteria if you live in north Wales and don’t plan on moving to a new house. Equally if you are mobile, more rural locations can offer great value for money as the demand for such practices isn’t on the same plain as the larger cities.
Step 2: Be honest about your daily commute. Do some practice runs to your preferred location during rush hour on different days. Get comfortable with what will be a daily journey. Viewing a practice on a quiet Sunday afternoon isn’t representative of a busy Wednesday.
Step 3: Work out your budget. There is nothing more disappointing than finding your dream practice only to realise it’s out of your budget. Speak to an independent, commercial finance broker who will be able to assess your situation and with a fair degree of accuracy guide you on the price range you should be looking within. You should also consider getting a Pre-Assessment Certificate which confirms you have been pre-assessed for finance and impresses sellers that you are serious.
Step 4: Size matters. Larger practices come with more of everything; more surgeries, larger teams so more management issues, more equipment to service and maintain, higher running costs, and so on. This is not something to put you off, but it does need to be considered and important you feel comfortable with the increased management responsibility that comes with a 4+ surgery practice compared to a smaller one.
Step 5: Ensure the practice matches your clinical experience and caters for your future needs and ambitions. If you have spent the past decade working in a private practice, then taking over an NHS contract with 22,000 UDAs where the existing principal delivered 9,000 of the UDAs may not suit you.
Step 6: This path has been trodden before so use experts. There are practice sales agents (look for one that is committed to the Practice Sales Promise so you know you are being treated fairly), specialist solicitors, financial advisers that specialise in the needs of dentists, accountants and finance brokers that will have dealt with hundreds of clients just like you – use them. Any broker/specialist should be able to more than cover their cost with added value.
Step 7: A practice viewing is to see the physical practice, but more importantly meet the current principal. A good practice will be well led, and the culture should be driven by the principal. Asking about the team and patients is a great investment of the limited time you will have. The sales agent can provide all the numbers and data you need, when you view a practice go searching for the nuggets that make it special.
Step 8: Take decisive action. If you like the practice, then move quickly. Let the seller know (via the agent if one is involved or your interest may not get noted) you are interested and make a winning offer. Once your offer is accepted swiftly appoint a solicitor and crack on with arranging your finance. In the early weeks of the process the seller will be busy assembling their own paperwork so the due diligence can begin, use this time wisely to get your finance in place, start your CQC application and plan in the next few months so you can respond quickly to requests for information.
Step 9: Keep momentum through the purchase process. Successfully purchasing a practice requires commitment from Step 1 through to 9, you need to make sure that the deal keeps moving which will require the constant nagging of your solicitor, lending bank, valuer, CQC and others to get it over the line. Keep the pressure on all parties as the sooner you can take over and take control the better.
Good luck in finding the practice of your dreams.