Changes seen throughout 2017
As we come to the end of another busy year I wanted to reflect on some of the changes we have seen in the past twelve months.
Associates continue to want to buy practices and we have seen a consistent increase in registrations over the year, at any one time during 2017 we have had over 5,000 associates actively looking for practices.
However, we have also seen the impact of practice owners suffering from the lack of associates available to work. This appears to be a national concern and we are hearing from many principals who are struggling to appoint good quality associates.
Interestingly, some associates we speak with are considering their options on buying practices as they see the opportunity to earn more as associates.
Sellers are approaching us to discuss an exit strategy at a much younger age with the average age being 52, compared to 58 five years ago. Most principals want to release themselves from the burden of practice ownership and continue their career where they can focus on the clinical work.
Banks are continuing to lend to Associates and aside from the 14 banks currently actively lending to dentists we are hearing other banks that moved away from the health care sector are back with vengeance and offering very competitive rates. For buyers the temptation is to stay with their existing bank, however, working with an independent business advisor can really save t money as banks once they realise they have competition will often provide a far more competitive rate.
Banks appear to require even more due diligence and sellers really have to be able to provide substantial information to any buyer and this is often the biggest delay in any sales transaction – our advice is to start collating the due diligence as soon as you are ready to put your practice to the market, that way you can spread the pain of collating the information.
Practice goodwill values continue to be strong and there is little evidence of a down turn in the market.
CQC regulation is now firmly established and CQC no longer accept any paper based application for CQC registrations. We provide a totally free CQC service for both buyer and seller and even if you are not using our services we are happy to provide you with information about this process.
There has been a number of new corporate bodies enter into the market place, some with considerable capital to spend! The established corporate entities are being challenged by the new entrants, and in addition there is a significant increase in the number of associates who are forming their own small groups to buy practices. The more interest there is in practice ownership the more choice our sellers have as to who to sell their practices too.
We have seen a surge in interest in private practices, not only are the aspiration of many associates to move away from NHS Dentistry but a well run private practice can be incredibly profitable and banks appreciate the value of a regular income from a capitation scheme.