Better the devil you know

Selling your practice to an associate – is it better the devil you know?

John Clarke Practice Management Leave a Comment

Irrespective of your current age, most principal dentists have retirement plans that include eventually selling their practice. Having evaluated how much money you will need to retire on and whether your practice is attractive to potential buyers, other key considerations revolve around timings and determining who the right person is to sell your practice to so you can set the appropriate wheels in motion.

The latest Practice Goodwill Survey statistics released by the National Association of Specialist Dental Accountants and Lawyers (NASDAL) paints a mixed picture for the quarter ending 30 April 2018. Average goodwill values for UK dental practices have fallen slightly to 132% of gross fees compared to the previous quarter ending 31 January 2018; however, average valuations have increased by 4% to 140% of gross fees.

“Key considerations revolve around timings and determining who the right person is to sell your practice to so you can set the appropriate wheels in motion.”

This rise, according to market experts, is linked to a number of practices attracting high demand from large corporate buyer competition, such as BUPA, Portman and Genesis.  As ever, practices situated in the ‘right’ location in major cities with good transport links and nearby amenities attract considerable interest, but this is of little consolation to principals who own practices in more rural areas.

It can be tempting to sell your practice to a large corporate group. Several have entered the arena in recent years and are looking to quickly grow their market share so you may not be short of offers. Most corporates will be of a sound financial footing. This is appealing if you own the freehold of your practice’s building as you can negotiate for a corporate buyer to lease the property from you, thus providing a valuable income stream in your retirement.

But there are also some potential pitfalls to consider when selling to a third party. Some corporates may approach you directly and make an unsolicited offer to buy your practice which may fall short of its true valuation. Discussions over the terms of sale could become more protracted due to their specific demands as they will want to ensure your practice will complement their existing portfolio. Furthermore, corporate buyers are more likely to insist that you remain as the principal dentist for a set period of time even after the sale has completed so that practice revenues are not adversely affected by existing patients leaving.

“Selling to an associate dentist, particularly if they are an existing employee, may be a more timely and financially sound decision that will allow you to enter retirement on your own terms.”

Does the thought of losing control over how and when you retire leave you feeling uncomfortable? If so, a better option might be to sell your practice to an associate as there are no shortage of potential buyers who are looking to take the next step in their careers.

Selling to an associate dentist, particularly if they are an existing employee, may be a more timely and financially sound decision that will allow you to enter retirement on your own terms. The associate will already know the inner workings of your practice which can ensure a more seamless transition for patients and staff alike, thus helping to protect the longstanding reputation that you have established within your local community long after you have departed.

Some high street lenders are risk averse when assisting associates with financing and adopt a ‘one size fits all’ approach. In contrast, specialist commercial finance providers can be more flexible in their willingness to tailor a financial solution to meet an associate’s needs and offer step-by-step support throughout the buying process.

“Always speak to specialist accountants, lawyers and financial providers who are experienced in handling sales of dental practices to ensure the least amount of stress for everyone involved.”

Choosing to sell your practice is a major, life-changing decision. But it might be that it is a case of better the devil you know than the devil you don’t when it comes to determining who is the right person to sell to. Regardless of which option you pursue, always speak to specialist accountants, lawyers and financial providers who are experienced in handling sales of dental practices to ensure the least amount of stress for everyone involved.

Developing a vibrant culture

Stand out in your practice by developing a vibrant culture!

Joy Marsden HR and Team Development, Practice Management Leave a Comment

Can you define and articulate the culture of your practice?

This is an important question to ask because it impacts your entire team, who all play a part in determining what that culture is, which in turn affects your patients’ experience. And this is reliant on building interdependent relationships.Read More

Expert advice from Thomas Coates

NHS dental contracts – what are my rights and obligations?

Practice Plan Podcasts Leave a Comment

Thomas Coates explains the different types of NHS contract, who can hold them and how they can be transferred or sold. He also considers what happens when someone decides to give up an NHS contract.  

What you’ll hear:
  • The difference between a PDS and a GDS contract
  • How NHS contracts are bought and sold and their popularity in the market
  • How to cease providing NHS dental services

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Getting Shirty

Getting shirty!

Les Jones Marketing and Design Leave a Comment

A few weeks ago, I went into a fairly upmarket men’s clothing store in my local town centre – I was looking for a new dress shirt to go with my dinner suit. I found a selection of shirts and was in the process of checking them out when a (slightly elderly) sales assistant came over and offered his help.

I explained what I was looking for and what my size was and he quickly gathered a few options together – all neatly folded and wrapped in that cellophane that shirts come in.

None of them were cheap – I think the lowest priced shirt was £75, the highest was over £100.

As the assistant started to talk me through the various styles of shirt, showing a great deal of knowledge, he did something I wasn’t expecting – when he finished talking about a particular shirt, he proceeded to throw it on the floor!Read More

Your questions answered

How do I choose and attract the best buyer for my practice?

John Clarke Practice Management Leave a Comment

Selling a practice can be one of the biggest decisions that you will make in your career and one of the key factors in the decision-making process is selecting who to sell to. Choosing the right buyer for your practice is important as it can have a big impact on ensuring you maximise your investment of all the years and money spent building the business up.

There is no universal approach to selling a practice, which can be why it is such a difficult process to navigate. But to find out more about what factors to consider when choosing the best buyer, and what you can do to ensure you attract that type of buyer, I asked John Clarke, Head of Business Development at Wesleyan Bank: How do I choose and attract the best buyer for my practice?Read More

Expert advice from Carol Groombridge

How to see what your patients see

Practice Plan Podcasts, Practice Management Leave a Comment

Business Coach Carol Groombridge explains why it’s important to take a step back and look at your practice as a patient would. Sometimes the little things that you don’t notice can be the things that make a huge difference to your patients.

What you’ll hear:
  • The importance of the patient experience and the factors that contribute to that
  • Examples of the little things that can reflect badly upon the practice
  • How taking a patient view of the practice can make a huge difference

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In Conversation with John Milne

The effect of regulation on dentists today

Practice Plan CQC, NHS Dental Landscape, Podcasts Leave a Comment

John Milne takes you through regulation in dentistry today and the effect it has on the lives of practising dentists and on patient care.

What you’ll hear:
  • The future for regulation in terms of the number of regulators/inspectors
  • The impact that the CQC has had on dentistry and how it has evolved
  • How regulation affects the standard of patient care

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Thinking about your toothbrush

Thinking about your toothbrush

Alif Moosajee Dental Health Leave a Comment

As dental care professionals, making sure our patients’ oral health is as good as it can be is of the upmost importance to us. We focus on making sure that our patients have stable mouths that don’t deteriorate due to what are essentially completely preventable diseases.

We’re keen to ensure that patients are brushing (most commonly with an electric toothbrush) and flossing correctly, and frequently enough in a way that doesn’t cause any damage to their oral health. Patients who are re-energised, reinvigorated and motivated to take care of their mouths at home makes the biggest difference between having patients who are stable and healthy versus patients whose oral health is deteriorating.

However, I have to hold my hands up and say that there is one large aspect of the oral health message that we have not been so focused on sharing with our patients, and that’s the role that the humble toothbrush bristles play in effectively cleaning teeth. I have spoken to other colleagues and I think this is something that, universally, as a profession we probably don’t communicate well enough.Read More

Past present and future

A dentist’s view – the past, present and future of NHS dentistry

Stuart Allan NHS Dental Landscape Leave a Comment

July 2018 marks the platinum anniversary of the NHS and there have been many changes over the past 70 years. It seems apt at this milestone to look at the history and evolution of dentistry within the NHS, and what the future might hold.

To explore this, we asked Stuart Allan, who qualified as a dentist in 1978 and is Chair of the Greater Manchester Federation of Local Dental Committees, to share his thoughts on the past, present and future of NHS dentistry…Read More