Peace of Mind, not Back of Mind
In day-to-day life, business and personal, we will often insure against the consequences of an undesirable event. Of course, we hope never to need to claim, whether it be for an accident, loss or theft of a valuable item, serious illness or death. It’s never nice to think about the circumstances which may necessitate a claim but having insurance gives peace of mind and will take away the likely financial pressure brought about by an already intensely difficult and sometimes tragic situation.
There is a worrying irony then that many practices, though run successfully by two or more dentists, often for several years, are often technically operating under the sole name of one principal. Consider then if that principal had to cease practising due to illness, death or simply chose to pursue other opportunities, and perhaps left the practice with little or no notice. It could be that any contracts, technically in the name of that sole principal, are removed or no longer valid, thus putting the future of the practice and the livelihoods of all the staff at risk. Thinking “that would never happen to us” and putting it to the back of your mind as a job for tomorrow is naturally very tempting with such a ‘doomsday scenario’ and what appear to be more urgent and immediate demands on your time. Nevertheless, a degree of protection against such an eventuality can be acquired. After all, why put off until tomorrow what you should do today?
Transferring a contract is to create a nominal partnership will involve contacting CQC and NHS England, so isn’t an overnight process, and will require the CQC registration to be updated. Additionally, if you are entering into partnership with a non-family member it’s advisable to engage a specialist dental lawyer to ensure your personal interests are secured. Of course, there’s a cost to the process (approximately £2,000 + VAT) but it’s a one-off process that can give protection and peace of mind for all in the practice for several years or more.
If you would like more information on how you can move your contract into a partnership, please contact us.
Practice - Surrey
Practice location: This well-established practice is located in a vibrant Surrey town and has been established over 50 years. It is close to local amenities and is shop fronted.
Practice type: This is a four surgery, mainly NHS practice and is being sold to facilitate the retirement of the principal. It is predominantly associate led and is being sold as leasehold with a 20-year lease in place that has 16 years unexpired. It 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 £860,000 per annum and the NHS-GDS contract has a UDA rate of £28.73 per UDA. The income is generated by the principal working on an ad-hoc basis, with four associates working a combined 14 days a week, specialists working two days a month and a hygienist working one day a week. They are supported by a full time receptionist, three full time and two part time dental nurse/receptionists.
Price achieved: A price of £1,955,000 was achieved which was in line with the asking price.
Agent's comments: The existing principal has recognised the potential to develop the private element of this practice, particularly over the past 18 months, however, at this stage in his career he decided it was not something he wanted to spend time developing. As the practice has been virtually associate run, he was confident that a new owner could see not only the potential to develop the private income but also increase the profitability by actually working in the practice.
Number of people looking in the area: 2,270
Practice - Kent
Practice location: This practice is located in a bustling high street in a very vibrant town in Kent. it is situated on the main high street and close to all local amenities.
Practice type: This is a very well established four surgery mixed practice which is being sold to reduce the responsibilities of the practice owner. The practice occupies a prominent corner site and is very well presented. It is being sold as leasehold with 17 years remaining on a 25-year lease which is 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 £575,000 per annum of which 59% is a NHS-GDS contract. The gross has been generated by the principal working four days a week, and two part time associates working four days a week and a hygienist working two days a week. The team are supported by three full time nurses and two part nurse/receptionists.
Price achieved: A price of £1,000,000 was achieved which was in excess of the asking price.
Agent's comments: This practice attracted much interest, great location, great team and great opportunity to develop and grow – we continue to see new owners with a hunger and thirst to develop practices and expand into additional services, facial aesthetics in particular. The outgoing principal is still reeling with delight.
Number of people looking in the area: 1,890
Practice - Greater Manchester
Practice location: The practice is based in one of the largest towns in the region and has seen exceptional growth over the past 10 years.
Practice type: This is a four surgery mixed practice and is being sold to facilitate the retirement of the current principal. The premises are freehold and the value of the freehold is part of the sale price. The practice occupies a two storey semi detached property and is very well presented.
Practice financials: The gross fee income is in the region of £750, 000 and 70% of the income is generated by a NHS-GDS with just over £32.00 per UDA. The income is generated by the principal working four days a week, three associates working a combined 14 days a week and two hygienists working a combined 3 days a week. The team are supported by a part time practice manager, a full time receptionist and four full time and one part time dental nurses.
Price achieved: A price of £1,500,00 achieved which was in excess of the asking price.
Agent's comments: This practice is a well-run practice and the appeal to the buyer who is already a practice owner was the principal wanting to remain and work clinically in the practice for as long as possible. The associates are all very happy and established and again this was another positive factor. We are definitely hearing less about the shortage of good associates, however, it is such a vital part to any practice purchase and not an issue to be ignored.
Number of people looking in the area: 985
Practice - Greater London
Practice location: This practice has been in situ for over 60 years and is a recognised landmark in this busy commuter town.
Practice type: This is a three surgery, mixed practice being sold with a new 20 year lease. It is being sold to facilitate the retirement of the current principal. There is room to add another surgery to this practice.
Practice financials: The gross fee income from management information for the past 12 months is in the region of £260,000 of which 50% is NHS with a UDA rate of £29.26 per UDA. The income has been generated by the principal working one day a week, an associate working three days a week, a hygienist working one day a week. The team are supported by four part time nurses who also share reception duties.
Price achieved: A price of £995,000 was achieved and was in excess of the asking price.
Agent's comments: This principal was ready to sell before we were hit by the pandemic and returned post lock down to work somewhat reluctantly – the incoming principal plans to work in the practice full time and this will immediately improve his profitability. There has been no marketing activity at this practice for many years so he can see an opportunity to develop the private element and introduce additional clinical services.
Number of people looking in the area: 3,009