MediEstates - ASK GARETH: How do you find out the true value of a dental practice?
ASK GARETH: How do you find out the true value of a dental practice?

Ask Gareth: how do you find out the true value of a dental practice?

Deciding whether to buy, sell or even lease a dental practice is a major decision for practice principals. The value of the practice building, whether that be for sale or lease, is likely to be the biggest financial consideration that most dental practitioners will encounter in their careers, and making the right decision has farreaching implications. It therefore follows that the information on which decisions are based must be as accurate and sound as possible, founded upon detailed analysis of the local property market, recent activity and intelligent forecasting.

Knowledge is power

At MediEstates, we have long been aware of how important an accurate valuation is and we always endeavour to offer our customers accurate appraisals of the value of their business. How do we do this? By accessing the latest information on the property market and analysing it in detail. We have access to the latest commercial property data from a variety of sources which tell us the price at which commercial properties were sold or leased all over the UK. Equipped with this information, we run reports on the average value, per square foot, that property commands in a particular area. We also have access to detailed demographic data which enables us to give prospective buyers a realistic idea of their future patient base potential.

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What makes us different from other brokers is that we can drill down into the information within very precise geographical areas, which enables us to know almost street by street, what value commercial properties are realising. Whilst less sophisticated reporting covers individual cities or counties, our reports can divide a city into different areas, taking account of more affluent areas or those where disposable income is lower and looking at price trends to see which areas are growing and becoming more popular. We offer, as part of our brokering service, a full market appraisal of the property, including advice on different options such as selling or leasing.

Demographic insights for potential buyers

Our market analysis can also provide invaluable insight to potential buyers who wish to know the type of area a particular practice is located in. Our reports provide details of size of population, average earnings and other information which enables buyers to determine whether the area is suitable for the type of practice they wish to develop.
If a dental practitioner is considering spending around £1 million on a new practice, they must know what their patient base is going to look like and our full demographic reports give them that insight. In this way, they can make plans for the future, for example, planning to provide a range of cosmetic services in an area where there is more disposable income.

Getting it right from the start

Obtaining an accurate appraisal of the value of a practice at the outset means everyone’s expectations are managed. The vendor will want an accurate idea of what they can achieve if they sell or opt to lease to another dentist. The incoming buyer will want to make sure they are paying a fair price, and both parties want to avoid any shocks when the lending bank sends in their own RICS-registered surveyor to carry out a bank valuation.

Not just a knowledge appraisal

With our detailed knowledge of the dental property market, our valuers travel up and down the country visiting practice owners who are looking to make the next move. Having our commercial property market sub-reports on the area, we are able to meet the owners in the practice to discuss their current situation and plans for the future. While completing our assessment of the Goodwill of the practice, we also carry out a property appraisal in which we look at the actual bricks and mortar of the building to assess the physical assets.

We then discuss our findings and set out the available options. Having access to the latest information and expertise ensures the vendor is then in the best position to make the decision that is right for them.

Gareth Walton is Estates Manager at MediEstates, a Henry Schein company. If you have a question that you’d like MediEstates to answer or a topic you’d like to see discussed in this column, please email gareth.walton@mediestates.co.uk or call 01332 321692
Posted by: Gareth Walton 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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