The option to call on expert help has long been a valuable lifeline on one of TV’s most famous quiz shows. Contestants, when faced with a tricky decision, can call on the help of a friend, ideally one knowledgeable in the field to which the question relates. The principle of asking an expert for advice is simple, and is becoming increasingly important, yet often overlooked in dental practice sales.
Andy Acton, of Frank Taylor & Associates (FTA), discusses some recent trends in the market and the benefits of using a broker to navigate what can seem a daunting process. “Over the last couple of years, probably since the first lockdown in early 2020, we have seen demand for practices increase hugely. Whereas pre-covid a seller may have got interest from, say three or four parties, today there will often be 12 to 15 possible buyers, often large corporates. This can pose a few challenges for the seller”.
“Firstly, simply dealing with that number of leads can become a full-time job in itself, the volume of calls and emails, requests for information, it can be quite daunting. Fortunately, a broker is well versed in the process and can help navigate it with you”.
“Critically for many, selling their practice is selling their ‘life’s work’, so it’s only to be expected that you want to get the best possible value for it. I often draw the analogy with selling your house. Around 90% of house sales are via an estate agent, yet in many cases it is fairly easy to establish an approximate value for a house. A simple internet search can show you the value of similar properties either recently sold or currently for sale in the area. Valuing a dental practice is more complex and the information on recent sales is not so readily available, unless of course, you contact a broker”.
“Of course, it is hugely flattering to be contacted by a potential buyer who makes what appears to be a generous offer. However, at this stage, this is the only offer you have, so you have nothing with which to compare it. It is highly likely the offer will have come from a professional buyer, i.e., someone whose job it is to ‘buy low’. The best price is not likely to be obtained from the first person that approaches you, just so you can avoid commission, it is a classic example of ‘penny wise, pound foolish’. Brokers will know what other practices are on the market and who other potential buyers are, so will have a better handle on the market price and be much better able to help you achieve it”.
“I was made aware of a sale recently where a solicitor recommended to a client to check the value of his practice with FTA. After doing so, the result was another buyer paying £450,000 more for the practice after all commission fees….and the beauty of all of this is you don’t lose a lifeline contacting FTA, so you can call these friends as often as you like!”
For more information on how Frank Taylor & Associates can help you with your practice sale, call 0330 088 1156.