MediEstates - Begin with the end in mind - Two part series - Part 1.
Begin with the end in mind - Two part series - Part 1.

Begin with the end in mind - Two part series

Part 1.

‘Begin with the end in mind’ is a mantra used in dental circles, primarily relating to the clinical outcome of a case. It is what a more experienced clinician (mentor) may say to their less experienced colleague (mentee). The analogy is, if you don’t know where you are going, how do you know if you have got there? As a clinician, you should be able to visualise, communicate, and agree with your patient, what the final clinical outcome will look like. The result is not guaranteed, but once you have agreed on the goal, you will both know the direction  you are heading.

Why does this not happen with businesses?

Most businesses, including dental practices and laboratories,  develop through the drive and passion of their owner, who sets out in search of more control over their destiny and to provide the best service to their patients. Very few dentists, have set up their business to sell them. Fortunately, many now can sell their business as the landscape has changed and consolidation in dentistry is here to stay.

Consolidation is the process of buying independent dental practices to create a group, usually with centralised administration. Consolidation can be seen everywhere in UK dentistry, Europe, and US, and the process is picking up speed every year due to the influx of buyers. Buyers are other independent practices looking to expand their ownership into a small group, which can range from two to 20 practices. Those small groups, once they reach a certain size will need to formalise relationships between the practices and create a team that will look after the ‘group’. They may decide to sell to a larger group or continue to grow becoming a corporate. This growth is, in many cases, fuelled by private equity funds, as dentistry is perceived as a safe and profitable haven. Groups will go through many stages of ‘growing pains’ on this journey. More on this in a future article.

Coming back to the independent practice owner, who originally did not establish their business to sell it, but with the market consolidating as outlined above, the opportunity to cash in this valuable asset does start playing on their mind. For majority of owners, the thought of selling their business seems to cross their mind in the late forties, early fifties. They usually delay exploring the opportunities for a few years and then dip their tow into the water by instructing an agent to carry out a valuation. The outcome of the valuation (The estimated purchase price) may be a positive or a negative experience, depending on the expectations of the owner.

If the experience is positive, the practice owner may sell the practice and be delighted with the outcome. If the valuation is below expectation, the practice owner will most likely be disappointed. At that point the owner may attribute the negative outcome as the fault of the agent, the fault of the market or some other reason but not the practice itself. Why leave that to chance when the outcome of the valuation can be far more predictable and is fully in the hands of the owner?

Even before you buy a practice, think to yourself, what kind of business do I want to run?

Some good questions to ask yourself before you buy (into) your first or next practice:

  • What do I want from this business? A lifestyle or growth?
  • Am I prepared to lead/manage a team? How can I develop those skills?
  • Do I need a practice manager? Most practices function far better with an experienced practice manager whether the owner realises it or not.
  • What kind of patients would I like to treat? How will I attract the patients that I would like to treat?
  • How will I handle the non-clinical stuff (property, H&S, compliance etc.)? Will I do it in house or outsource it?
  • How will I ensure my practice stays current with IT developments, clinical and non-clinical? How do I invest in technology without the constant threat of its obsolescence?

If you are just beginning to explore the opportunity of owning a practice,  some of these questions may be top of mind, and there are many more you’ll encounter as you continue your ownership journey.  

If you are a few years into your practice ownership and nowhere near selling your practice, it is still be a good idea to engage an agent and value your practice. Through this process you will gain an understanding of what the drivers of value are that will ultimately influence the purchase price of your practice.  

Part 2. will cover the meaning of drivers of value. In the  meantime, if you are setting up a dental practice, growing your practice or group, or simply looking for an indication of your practice(s) value, don’t hesitate to contact MediEstates. We have been in the dental market for nearly 20 years and will help you achieve your goals, supporting you on the journey chosen by you.

Posted by: Maja Thompson on

General Buyer Terms 

This agreement is in relation to MediEstates Limited whose registered office is at 1st Floor, Pacific House, Stanier Way, Wyvern Business Park, Derby, DE21 6BF acting for and on behalf of our clients ("the Vendors"); and yourself (Buyer's Name) in relation for an introduction to a prospective sale of a business as a going concern. By registering through this agreement I agree to all terms set out below:

  1. Definitions
    In this Agreement the following terms and phrases shall have the following meaning unless the context otherwise requires:

    Dental Practice business providing dental care. This business is under the MediEstates Ltd sale terms.
    Confidential Information
    Means the actual Vendors identity and all confidential information in respect of the Business, including, but not limited to, any ideas, business methods, prices, accounts, finance, marketing, research, development, manpower plans, processes, market opportunities, intentions, design rights, product information, customer lists or details, employees’ details, trade secrets, computer systems and software, and other matters connected with the products or services manufactured, marketed, provided or obtained by the Vendor, and information concerning the Vendor’s relationships with actual or potential clients or customers and the needs and requirements of such clients’ or customers’ operations.
  2. Obligation of Confidentiality
    The Prospective Purchaser agrees to treat as confidential, information supplied by or on behalf of the Vendor in connection with the sale of the Business.
  3. Exclusions
    The obligation of confidentiality set out in clause 2 does not apply to:
    1. any information received from a third party who was legally free at the time of disclosure to disclose it;
    2. any information which was already lawfully in the Prospective Purchaser’s possession prior to receiving it from MediEstates Ltd on behalf of the Vendor; and
    3. any information which is in its entirety already in the public domain.
  4. Duties of Prospective Purchaser
    1. The Prospective Purchaser shall take such a reasonable security measures to protect the Confidential Information and trade secrets.
    2. The Prospective Purchaser shall not, without the prior written consent of the Vendor, permit any of the Confidential Information:
      1. to be disclosed, other than in confidence to its legal or professional advisors;
      2. to be copied or reproduced;
      3. to be commercially exploited in any way;
      4. to be used for any purpose other than in connection with the prospective purchase of the Business;
      5. MediEstates is registered under the Data Protection Act 2018. Upon Signing this agreement you agree to follow the legal obligations of this act to protect the details of the information supplied to you, with it no to be passed outside of the control of you the prospective purchaser.
    3. The Prospective Purchaser agrees to keep a record of Confidential Information received.
    4. The Prospective Purchaser will return to MediEstates or the Vendor all documents containing Confidential Information and all copies of those documents on demand at any time which are in its possession or under its control, and for this purpose the term “documents” includes computer discs and all other materials capable of storing data and information. The Prospective Purchaser agrees that such documents remain the property of the MediEstates on behalf of the Vendor.
    5. The Prospective Purchaser must not jeopardise or re-direct the sale under any circumstances.
    6. The Prospective Purchaser must not contact the Local Area Team or CCG regarding any practice sale, by any means of media unless written permission is granted from the Vendor.
    7. To carry out own due diligence on practice purchases and accepts that any information MediEstates has supplied is information provided by the vendor and is not responsible for its accuracy or completeness.
  5. This Agreement
    The existence of this Agreement and its terms are confidential and neither MediEstates nor the Purchaser may disclose anything about this Agreement or its subject matter or implementation to any person other than in confidence to their legal or professional advisers.
  6. Duties of Prospective Purchaser
    When buying Dental practices, finance is normally needed. Our organisation operated over more than one of the MediHoldings brand, by completing this from you agree that the information can be shared to our other organisations to avoid the need to register independently and provide the best possible service.

    MediEstates will refer you to the specialist dental lending team and MediFinancial who will contact the necessary banks, whom have preferential healthcare lending rates in some cases, to ascertain which funding is available to you.
    By signing this agreement you do not have to use any of the banks MediFinancial contact, it is just another service which we provide.
  7. Deposit for Dental Practice
    If you are interested in putting forward a formal offer in for a practice, once the offer is accepted there will be a deposit required to secure the practice sale which is dependant of the practice size. This deposit is held in a client account and will be returned to the buyer on completion of the practice sale. You the buyer, will be required to sign a deposit schedule which will cover the buyer and the seller in the event that the practice sale does not proceed.
  8. Changes to this Agreement
    Any changes made to this agreement must be authorised and signed by one of MediEstates Ltd Directors.
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