Benjamin Franklin once said that by “failing to prepare, you are preparing to fail”. This has become a common saying and the importance of preparation cannot be overstated particularly when you’re preparing to sell your dental practice.
“Running a dental practice is a full -time job”, says Lis Hughes of Frank Taylor & Associates, “and a very varied one too. Naturally there’s the clinical side, but you are also running a business, training, recruiting, developing your team, to say nothing of keeping up to date with latest developments in treatment, technology, and legislation. If you then add the task of selling the practice into that mix, a task that understandably you may well not feel comfortable delegating, then you can see how suddenly it becomes more than a full-time job, and clearly that’s not sustainable.
“However, it doesn’t have to be like that, there is a solution. A great piece of advice is to always ensure you are prepared for the sale of your practice, odd though it may sound, even from day one. A lot of this means ensuring all documentation required by the CQC is kept current. Like any task, it’s more manageable if you keep on top of it and stay up to date, rather than leaving things to drift and allowing the paperwork to become out of date. Setting aside a small amount of time each month to review this can save hours of work in the future, many practice owners invest in software to assist them in maintaining their compliance with CQC and it is cost effective in both time and managing the stress of not being compliant!
“It’s understandable that a lot of due diligence work needs to go into a practice sale, for both the seller and the buyer it could well be the most important financial decision of their lives, so being prepared for this can ease the process enormously. Understanding how and when you need to update your documentation, for example when purchasing new equipment, renewing an insurance policy can really speed things up.
“That said, the process needn’t be daunting or excessively bureaucratic, it’s really just a case of thinking ahead and making sure everything is in the right place. We produce a guide that can act as your roadmap, more details of which can be found here.
Practice - Hertfordshire
Practice location: This well-established practice is located in one of the most affluent suburbs of Essex and is well placed close to a busy high street. There are excellent transport links, including access to the M25 and a local railway station within walking distance.
Practice type: This is a two surgery, fully private practice which has been established over 60 years and is being sold to facilitate the retirement of the principal. It is being sold as leasehold with a 20-year lease in place and is inside the Landlord & Tenants Act 1954.
Practice financials: The gross fee income from management information for the past 12 months is in the region of £275,000 per annum and the NHS-GDS contract has a UDA rate of £29.73 per UDA. The income is generated by the principal working four days a week and a hygienist working one day a week. They are supported by three part time dental nurse/receptionists.
Price achieved: A price of £590,000 was achieved which was in line with the asking price.
Agent's comments: The existing principal has enjoyed his career in dentistry but feels new ownership would bring fresh impetus to the practice which has not had any active marketing ever. The incoming principal has plans to develop the private element and is excited by the prospect.
Practice - Greater London
Practice location: This practice is located in a busy suburb on the outskirts of greater London. It has been established since the 1950s and is superbly located between shops, schools and residential properties.
Practice type: This is a very well established three surgery, fully private practice which is being sold to facilitate the retirement of the existing principal. The practice occupies a former residential house and is being sold as leasehold with 15 years remaining on a 20-year lease held within the Landlord & Tenants Act 1954.
Practice financials: The gross fee income from management information for the past 12 months is in the region of £370,000 per annum. The gross has been generated by the principal working five days a week and a hygienist working two days a week. The team are supported by one full time nurse and two part nurse/receptionists.
Price achieved: A price of £675,000 was achieved which was in line with the asking price.
Agent's comments: With one surgery out of three not in use there are plenty opportunities of developing this and with a great location the incoming principal can see many opportunities. The seller is happy to stay on for six months to ensure a smooth handover and as the buyer has had limited experience of private dentistry he is keen to take advantage of this opportunity.
Practice - Norfolk
Practice location: The practice is situated within a popular town and has been established for over 40 years and was fully refurbished in the last 10 years.
Practice type: This is a four surgery, mainly private practice being sold to facilitate the retirement of the current principal. It is based in a previously residential property and is spread over two floors with ample car parking outside of the practice.
Practice financials: The gross fee income is in the region of £650,000 - 30% of the income is generated by a NHS-GDS with just over £35.00 per UDA and 70% is private. The income is generated by the principal working four days a week, and four associates working a combined 16 days a week and a hygienist working 4day a week. The team are supported by a practice manager, two part-time receptionists and five full time nurses.
Price achieved: A price of £825,000 was achieved which was slightly higher than the asking price
Agent's comments: The principal has built a great team and the energy when you walk into the practice should be bottled and sold. Having said that he has decided he wants to retire before his enthusiasm starts to fade and is very keen to work alongside the incoming principal as he has not lost his joy of clinical work.
Practice - Greater Manchester
Practice location: This practice occupies a purpose built two storey building, located within a large town amid residential and commercial properties.
Practice type: This is a three surgery, fully private practice being sold with a new 20 year lease. It has been established for over 20 years and is being sold to facilitate the retirement of the current principal.
Practice financials: The gross fee income from management information for the past 12 months is in the region of £750,000. The income has been generated by the principal working four days a week, and two associates working a combined five days a week and a hygienist working 2 days a week. The team are supported by a full time practice manager and four full-time nurses who also share reception duties.
Price achieved: A price of £975,000 was achieved and was in line with the asking price.
Agent's comments: Like most principals looking to sell, this principal has enjoyed the clinical work immensely but has lost his enjoyment of dealing with the admin! And, like many would like to release himself from this burden and then carry on enjoying working with his patients.