Here’s the answers to some of the most frequently asked questions about buying a dental practice.
Why do I need to register with FTA?
Registering as a member to receive details from Frank Taylor & Associates is simple and provides you with the largest selection of ‘real’ dental practices for sale in England and Wales. We will assist you in finding the right practice by ensuring we gain a thorough understanding of your needs.
How do I register as a member?
Registering with FTA is simple and you can select a level of membership that suits your requirements, your budget and the time frame you’re looking to buy in. Our paid membership levels vary in the features offered. You can take a look at the different membership options available on our website and either give us a call on 0330 088 1156 to discuss your requirements with one of our account managers who will be able to recommend the appropriate level of service for you, or complete our online registration form to sign up today.
How can I get finance to buy a dental practice?
How to finance the purchase of a dental practice is obviously a big question. Who to borrow from, how much to borrow, for how long and on what terms, are just a few challenges that you need to consider. If you’re looking to finance your dental practice purchase, we’ll point you in the right direction to the specialist team at FTA Finance.
FTA Finance offers a straightforward and hassle-free service that takes the fuss out of arranging finance for you and your business and that’s why they are the largest in the dental sector.
How much can I borrow to buy a dental practice?
An independent commercial broker such as FTA Finance will undertake a financial pre-assessment for you so you know how much you can afford to borrow before you even start to arrange viewings or make any decisions about the practice you’d like to buy.
How do I set up a squat practice?
Setting up a squat is a viable way to get into practice ownership but does require a very different approach from buying an existing dental practice. You need to create a plan of what your dental practice will become and with this a financial forecast so you can be comfortable with the necessary investment required. If you feel that setting up a squat dental practice is a route to explore then we can help you so please get in touch on 0330 088 1156.
How do I place an offer for a dental practice?
It’s a really exciting time when you’re ready to place an offer on a dental practice that you love, so it’s vital you follow the right steps so you don’t miss out. Make sure that all offers are placed directly with our Client Manager team and that you do not speak directly to the seller. Also, remember, you can only place an offer once you have viewed a practice and along with your offer, you need to make sure that you have proof of funds, any terms and conditions and your dental specialist solicitors details ready to give to the Client Manager team – these are all essential if you want to proceed with a practice purchase.
What’s a sealed bid (offer deadline)?
A sealed bid (sometime referred to as an ‘offer deadline’) is a closed bidding process where you have a one-time opportunity to put in your best, and final offer for a dental practice. It’s your chance to put in a competitive offer for what you feel is worth paying for the practice. Once the deadline has passed, all offers placed are put forward to the seller who will then decide which offer they would like to accept. As it is a closed process, we do not share details of offers with anyone else other than the seller.
How will I know if my offer has been accepted?
We liaise closely with all practice owners selling their practice with us and if you’ve placed an offer for a practice, we aim to get an answer back to you as soon as possible. The timeframe may be a bit longer if it’s a partnership as there could be more people involved in the decision so please bear with us, but once you’ve made your offer, we try to get back to you as soon as we can so we can get some momentum into the sale and gets things moving along as quickly as possible.
How long should I expect the buying process to take?
Once you’ve had an offer accepted on a dental practice, the timeframe is then largely dependent on the solicitors you are using and whether you have funds in place. By using a dental specialist solicitor, which is always our recommended route for any dental practice purchase, things will move forward much quicker as a dental specialist solicitor will understand the exact nature and complexities of the purchase process and this will undoubtedly avoid any unnecessary delays and complications along the way.
I’m not receiving practice sale details – what should I do?
If you are not receiving details of practices for sale it may be that your details are incorrect on our database or something may have changed. For example, if your contact details have changed (e.g. you have a new email address or mobile number), please get in touch with us on 0330 088 1156 or email us to let us know. Also, remember to let us know if your requirements change – you may have decided to look to buy a dental practice in a different area or be looking for a different type of practice, so please tell us so we can update our records. The more we can stay in touch, the better.
Can I get help to deal with my CQC application?
When buying a dental practice, you will need to consider how to deal with your application to the Care Quality Commission (CQC). The CQC is really complicated and changes all the time so you need to seek advice from a team that has a wealth of experience behind them. Get in touch with us on 0330 088 1156 and we’ll direct you to the experts who deal with this every day and fully understand the process and all that’s involved.
I will never be able to afford a dental practice. What should I do?
It is no secret that the value of dental practices is at an all-time high.
For many this can feel like being able to afford a dental practice is beyond their reach. However, with a bit of planning it is possible but just might take a little longer to realise this dream.
You typically need a contribution when buying a dental practice of 20%, so a £400,000 practice would require a deposit of £80,000.
Many buyers decide quite early on in their dental career that the want to own a practice and this is the time to start making provision for your deposit. These savings are an investment in your future and with the average profit in a dental practice between 22% and 25% could be the best investment you ever make.
Depending on the deposit you have available you could work towards the practice of your dreams and target a slightly smaller practice as your first purchase.
What if patients leave the practice after I buy it?
It is an understandable fear that patients either leave and find another dentist once you take over or they follow the departing principal to where they might still be working.
To deal with the second point first, this should be covered off in your sale and purchase agreement giving you recourse to the seller if they continued to treat patients after they sold to you. After all the goodwill relates to the patient base and ongoing delivery of treatment to these patients.
With regard to patients leaving to find another dentist, this tends to only happen where patients have already moved away, and the change sparks them to look for a more local dentist or they have been unhappy with the practice prior you taking over. Either way the numbers are small. Most patients will give you the benefit of their custom and it is for you to prove them right for putting their trust in you and your practice.
Ensuring patients have a good first experience under your ownership tends to result in the overwhelming majority continuing to be patients.
If a few do decide to leave you may not have been a good fit and developed a good dentist-patient relationship so it may be a blessing in disguise.
Should I deal directly with a seller during my practice purchase?
Whilst it’s tempting to speak directly to a seller at a practice viewing or once you’ve decided to place an offer, always ensure any negotiations are handled by a member of our Client Management team. Our team are dealing with practice sales all the time and are experienced in negotiating the best deal for both buyers and sellers. Plus, we’ll handle all those tricky conversations along the way if needed.
Can I arrange a bank loan myself for a dental practice purchase?
If you’re moving ahead with a practice purchase it would be very easy just to approach your current bank and ask them to lend you the money, but this doesn’t guarantee you’re getting the most competitive rates. Also, don’t make the mistake of approaching just one bank direct as they will only outline what their own lending guidelines will permit which may not be the most favourable – the banks are all different and all have different lending criteria.
Having the right documentation to support your application and presents you in the best possible light also plays a vital part and could make all the difference to a lending decision. Most banks would expect to see a business plan, background on you, background on the practice you’re looking to buy, the changes you’re looking to make and the impact this will have on the practice income and profits – don’t underestimate the time it takes to pull all this together.
Whilst you can try to do all this yourself, it’s advisable that you work with an independent adviser who is authorised by the FCA, such as FTA Finance. An independent adviser, can work with all the banks, including smaller ‘niche’ lenders and they’ll know the right bank managers to approach, giving you peace of mind that you’re getting the most competitive deal. They’ll also take the time to put together all the paperwork needed for the banks, will do all the negotiating on your behalf, and, once you do get the funding you need, they’ll work with you to the very end of the purchase to ensure everything goes through smoothly. For more advice, please give our colleagues at FTA Finance a call on 0330 088 1157.
I’m buying a dental practice, but the lease has only five years to run – what can I do?
In these circumstances, you have a few things to consider before going ahead with the purchase:
- Can you afford to buy the business and repay any loan you take to secure the purchase over just five years?
- Can you afford to relocate the business after the lease expires in the next five years?
- Can the lease be extended for a longer term?
Our advice would always be the last option – always check to see if the lease terms can be renegotiated and extended before you proceed with the purchase.