Thinking About Selling Your Dental Practice? You Need an Exit Strategy!
When and how to exit the business. It's a choice that almost every dental practice owner will face at some point in their career. Whether you're looking to retire, move on to a bigger or better opportunity, or take some time away from the dental world and pursue a different path, planning your exit strategy is essential to ensuring a smooth transition.
With many dentists expressing frustrations with the increasing pressure to deliver high-quality, cost-effective care alongside the administrative burdens of running a practice it's no wonder we're seeing an increase in the number of practice owners considering their options. The prolonged impact of COVID-19 and the current dental recruitment crisis have also put further stress on many practices, making the decision to sell and have less responsibility even more appealing.
Making the decision to sell your dental practice is often a difficult one. Years of hard work and dedication go into building a successful practice, and it can be extremely hard to part ways with something you have put so much time and effort into. However, if you've decided it's the right move for you, there are certain things to consider when planning an exit strategy.
Deciding on the best deal structure
Depending on whether you want the entirety of the proceeds right away or you're comfortable with taking payments over an extended period with the appropriate retentions and guarantees included as part of a post-sale agreement, the sale structure can vary. You may decide that you want to continue to be involved in the practice post-sale, either as a mentor to the new owner or with ongoing contractual arrangements as an associate. Alternatively, you may prefer a cut-and-dried structure that allows you to move on without any further ties to the practice.
Finding the right type of buyer
The type of buyer your business attracts will be dependent on its size and annual turnover. If you have a smaller practice with between 1-3 surgeries, you'll likely be looking for an individual (owner-occupier) buyer wanting an affordable entry into the dental industry. If your practice has 4 or more surgeries and an annual turnover of £750k+, then you're likely to attract larger corporate entities who may have plans to expand and acquire other practices in the area. There are, however, an increasing number of small groups and mini-corps purchasing smaller practices as part of their growth strategy. Sellers need to be aware of the implications of each type of buyer, sale structure, and post-sale agreement, to understand the relative benefits associated with each.
Another important consideration is that (depending on the type of buyer) in some cases transfer of ownership can take up to 12 months due to the various legal complexities involved. With this in mind, exit strategy planning should ideally be started before you are ready to sell to eliminate unwanted delays further down the road.
Valuing your practice correctly
Knowing the true value of your dental practice is an essential part of any sale process. Valuations can be complicated because there are a lot of variables to take into consideration. These include - the practice's location and patient base, its profitability, equipment and technology, future growth projections and competition in the area.
Value your dental practice with no pressure to sell
At MediEstates, we have over 15 years of experience as specialists in dental practice brokerage and valuation. By providing practice owners with the latest market insights, we can assist them in making well-informed decisions about the future of their businesses. We offer a bespoke, confidential valuation service, analysing factors such as day-to-day running costs, treatment types, growth potential, sustainability of goodwill, property type and location. We then compare these to benchmark figures and market sales data from our extensive database to find the true value of your practice. Our appraisals also include detailed financial forecasts and advice on maximising profitability to get the most value out of your business.
We fully understand the emotional and financial investments required to succeed, which is why we make it our mission to structure the best possible deal that meets the needs of individual practice owners. Whether you are looking to sell straight away or simply want to discuss the available options, MediEstates can offer free, expert advice.
Selling your dental practice is a big decision, but with the right strategy in place, it can be an opportunity to set yourself up for future success. Exiting the business doesn't have to be a stressful process - by taking the time to develop an exit strategy, find the right buyer, value your practice correctly, and know the legal obligations of selling a dental practice, you will be well on your way to ensuring a smooth transition. The team at MediEstates would be delighted to discuss your individual needs and offer our expertise in helping you to decide on the best options for your future.
Why not call us today to get the conversation started?