MediEstates - ASK SCOTT: How long will I need to stay on after I sell my practice?
ASK SCOTT: How long will I need to stay on after I sell my practice?

Ask Scott: How long will I need to stay on after I sell my practice?

As a Practice Valuation Manager for MediEstates, Scott Gidman undertakes practice valuations as large as £9 million providing the vendor with a comprehensive business and property report. One of the most common questions he gets asked is “How long will I be expected to stay on, after I have sold my practice?”. The answer is always different and depends on a range of different criteria – and can be as short as a few weeks to as long as five years.

In this article Scott covers some of the key areas to think about when planning your retirement or exit from practice ownership.

Practice type
The amount of time an incoming buyer might ask you to remain is highly dependent on the type of practice. The retention period requested on a private practice is often much longer than that for an NHS or a mixed practice. Private dentists often have a more loyal patient base whose main reason for staying with the practice is the level of trust that has been built with their dentist. When a practitioner moves, there is less certainty that their patients will remain after the sale, so a buyer often stipulates a longer retention period in the sale contract in order to give the patients the reassurance they need to stay loyal.

What are your motives for selling?
If you are selling because you plan to retire and therefore leave the practice almost immediately, you need to be prepared for the incoming buyer to ask you to take a deferred payment of a certain percentage of the purchase price, maybe for as long as two or three years after the sale, again to ensure a smooth handover.

On the other hand, if you are selling simply to get away from the management side of owning the business and you are planning to stay on another 10 years, there is a vested interest on both sides to ensure the practice handover is successful.

Type of buyer
Some buyers are not keen for the outgoing dentist to stay on after the sale; for instance, a dentist who is interested in buying a three-surgery practice and take on the existing patients for themselves might prefer a clean break.

At the other end of the scale, a large corporate might have very stringent requirements on retention periods and deferred payments as often they wish to protect their investment as much as possible, to reduce the risk of decline.

Safeguarding your inheritance
Depending on the type of practice you have built, you may want to put measures in place to ensure its future. For some, a practice is a life’s work and it is very important that it continues to flourish and that the staff and patients are well looked after by the incoming owner. In this instance, a longer handover might ensure that staff and patients do not feel your loss too keenly.

Plan your exit early
The key to planning an effective exit strategy from practice ownership is starting early; in my experience that means about six or seven years ahead, if you consider that it can take about a year to sell a practice and you might be asked to work for another five years. In addition, it’s important to make sure that your practice is as attractive a proposition as possible to potential buyers. At MediEstates we can give a free evaluation of your practice at any time, pointing out where you might need to make improvements so there is time to implement those changes before a sale commences.

It’s also at this point that you can plan a staged reduction of your hours of work so that you can slowly extricate yourself from the day-to-day running of the practice and make it less likely that the buyer will request a long retention period after sale.

In my opinion, it’s never too early to start planning for the future. What better place to start than with a free valuation from MediEstates. We can not only give you an informed estimate of the value of your practice, but also an idea of what a future buyer might ask of you when you do come to sell.
Posted by: Scott Gidman 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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