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MediEstates - Time to move on?
Time to move on?

Time to move on?

 

Dean Barker discusses ways to build an effective exit strategy by maximising untapped practice potential


Life working as a dentist can be very demanding, especially for those who own and manage a busy NHS practice.

With so much uncertainty around the NHS contract reforms, combined with the unknown outcomes of Brexit, it’s no wonder that many principals and practice owners are considering their options and looking to make the transition to a new career path, or even into retirement.

Despite the uncertainties of the wider economic environment, an NHS practice that is comfortably fulfilling its contract with a proven income stream remains an attractive proposition to potential buyers. This is good news for practice owners, who are in the driving seat when it comes to determining their future.

Whatever stage you find yourself at – be it wanting to get away from the stresses of business ownership or deciding to give it all up and head for pastures new – it makes sound business sense to plan an exit strategy at the earliest stage possible.

Planning your exit
An ‘exit strategy’ is a term often used in business and financial circles and although it has a suggestion of finality about it, it does not necessarily refer to the time when an individual leaves the profession for good. An exit strategy is just as applicable to an individual selling a practice, brokering an associate buy-out or simply choosing to do something completely different.

The value of your practice is likely to form a significant part of your total assets and ultimately fund your future chosen lifestyle. So just as many of us make improvements to our homes to increase their value when the time comes to sell, it makes sense to maximise the value of your business to increase the profit from the sale of your practice.

Untapped potential in the practice
As well as continuing to meet UDA targets and controlling costs, in order to maximise turnover and profits it pays dividends to look at the untapped potential in your practice.

Fully maximise all chair time
An empty chair is a lost opportunity to generate revenue and actually costs the practice money as overheads and staff still need to be paid whether the chair is in use or not. If your surgeries are already working at full capacity, consider extending opening hours to create additional chair time.


 

It makes sound business sense to plan an exit strategy at the earliest stage possible continued growth throughout this year and on into the foreseeable future

 




Utilise your hygienists and therapists
This can generate far more profit than the use of associates alone. By concentrating on the most cost-effective treatment options profitability can also be increased.

Focus your efforts on high-grossing treatments
Maintaining or increasing the level of turnover in the practice can be achieved by reviewing those lucrative treatments and finding ways to further promote them to your patients.

Try to keep referrals in-house
If you refer just one dental implant a month at £2,500, this has a value of £30,000 per year, which often is revenue that can be ’lost’ to another practice. Consider bringing in an implant dentist, maybe one Saturday per month when the practice is normally closed, or more often if needed. For even better income opportunities, consider asking them to become an associate.

Don’t sit back
It can be tempting for dentists heading into retirement to reduce their time spent in practice, but this could be a mistake. A practice needs to be functioning at its peak to prove that it is a viable investment. Any signs of underperformance will be a red flag to a buyer, who may be concerned that you’re struggling to hit targets or hiding underlying inefficiencies.

Planning ahead
Today’s dentists are fortunate in that they are able to plan and execute an exit strategy much earlier than their predecessors.

Mediestates’ extensive and comprehensive understanding of the dental market and how it relates to individual circumstances allows the team to help plan and execute exit strategies at the earliest opportunity.

So, whether you want to sell outright or stay in the practice for years to come, using a specialist broker, such as Mediestates, can provide you with the knowledge and practical guidance to help you plan the exit strategy that is right for you, both now and in the future.

Posted by: Dean Barker on 15 Nov 2018

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:

    Business
    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 1998. 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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