Location, Location, Location

Goodwill hunting – buying a dental practice has become all about the location

John Clarke Practice Management Leave a Comment

If buying a dental practice is at the top of your new year wish list, you might be interested to know the main trends that have been influencing practice sales. According to the latest goodwill survey results compiled by The National Association of Specialist Dental Accountants and Lawyers (NASDAL), the market remains buoyant however buying a dental practice is now becoming all about the location.NASDAL’s latest figures, which relate to the quarter ending 31st July 2017, suggest the practice sales market is developing a geographical divide. Dental goodwill values achieved in some areas of England are very high – with practices situated in London, the South East and Manchester regularly fetching over 200% of gross fees. However, practices located in the North East, Cumbria and those situated away from major cities can expect to generate a lesser return on their investment.

“NASDAL’s latest figures, which relate to the quarter ending 31st July 2017, suggest the practice sales market is developing a geographical divide.”

Private practices are particularly witnessing a surge in interest and showing steady increases in EBITDA (earnings before interest, tax, depreciation and amortisation) in comparison to NHS and mixed practices. Increasingly, more dental associates appear to be seeking to move away from NHS dentistry and are looking to purchase well-run private practices which offer strong ongoing revenue potential.

Private dentistry in the UK is currently leading the way in its willingness to embrace modern technology, for example oral scanning and computer aided design (CAD) solutions. As such, private practices in desirable locations are likely to appeal to more entrepreneurial dentists and those with patient membership plans can be very profitable by helping to retain a strong and loyal patient base.

“Practices located close to bustling town centres, affluent areas, good schools and with accessible transport links will command a higher price and help you to attract new patients.”

In addition to considering the geographical location of your dental practice, its proximity to public amenities can be critical to your business’s success. Practices located close to bustling town centres, affluent areas, good schools and with accessible transport links will command a higher price and help you to attract new patients. It is also imperative to ascertain whether your preferred practice has convenient on-site parking and relevant planning permissions in place should you wish to carry out refurbishments, or extend the practice building to create additional surgeries.

Specialist financial providers, such as Wesleyan Bank, can provide step-by-step support to dentists looking to acquire a dental practice, as well as providing the necessary financial solutions to help you maximise growth and profitability once the sale has been completed. This will include flexible finance products to support the expansion of a practice to offer new patient treatments, including payment-over-time solutions to enable practice owners to invest in innovative dental equipment and modern technology to enhance patient services.

“As dental practice values continue to remain strong with little evidence of a downturn in the market, demand has arguably never been higher…”

As dental practice values continue to remain strong with little evidence of a downturn in the market, demand has arguably never been higher with buyers expressing an interest in all variations of practices. Given that specialist funding solutions are now much more accessible in the dental sector, perspective buyers should consider making their move sooner rather than later to avoid missing out on business growth opportunities in 2018.

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