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MediEstates - Begin with the end in mind - Two part series - Part 2.
Begin with the end in mind - Two part series - Part 2.

Begin with the end in mind - Two part series

Part 2.

Part one., covered the topic of embarking on a practice ownership journey and what some of the key questions should be that a would-be practice owner should ask. In addition, a need and reason for a regular dental practice valuation was discussed, aiding dental practice owners in identifying the drivers of value within their practice, which will ultimately be decisive in the amount of profit the practice makes and its value as an asset.

What is meant by ‘the drivers of value’?

Certain aspects of a practice are more valuable than others as they have a disproportionately large effect on the profitability of the practice. Accountants would call this ‘low hanging fruit’ as it is easily identified, if you know what you are looking for. A regular accountant, the one who does your yearly accounts, will not always take the time to explore the finer details of the business, however an agent who values dental practices for a living should spend this additional time to help identify the opportunities.

Reputable dental agents analyse the practice in detail to arrive at a valuation. This analysis will usually involve the last three years of accounts, associate statements, payroll details, property details, NHS contract details, practice management reports, and much more,  which they will use to compile a report that will be discussed with you in detail. This is the perfect opportunity to discover the ‘low hanging fruit’ and furnish you with indicators that could lead to an improvement in the value of your dental practice.

It may seem like a lot of work initially but if you get into a habit of having a yearly valuation the benefit will be threefold:

  • It will be easier gathering data for a single year that has passed and the process will keep you on top of your important paperwork;
  • You will be far more in touch with the financial success of your business and the expected value you expect to receive; and
  • If you start the process of valuing and reassessing your business yearly, you will have the opportunity to adjust your business practices and operations to help increase the value of your business.

You ask yourself but why would the dental agents do this for free? Will they put pressure on me to sell my practice?

A reputable agent will not charge you or put pressure on you to engage their services. The reason there is no charge for the valuation is that the valuation market is awash with dental agencies offering a dental practice valuation, however the quality of the output, service and after-valuation support varies vastly. Once the dental practice owner is ready to sell the business, dental agency they engage during the sales process will charge a small percentage of the sale fee. Always choose an agent with experience in the market and ask for references so you can find the right fit for your business.

The reason why reputable agents do not put pressure on the practice owner to sell is that they know the value of supporting the practice through the growth. As the practice grows, so does its value so that when the owner does decide to sell, whenever that may be, they will choose the trusted partner who has helped  them with the growth process and assisted them on the journey.

How can an agent who sell practices help the practice grow?

By valuing the practice yearly, MediEstates can identify ‘the drivers of value’, assist the practice in growing those drivers  and review the progress of growing the value of the practice over time. Being part of Henry Schein, as one of the largest global dental suppliers, MediEstates collaborates across the Henry Schein group to facilitate support for practices that wish to grow. This growth is ultimately represented as value growth of the practice and MediEstates can help with the exit from the business when the time comes. In the meantime, Henry Schein’s network can help in a variety of areas ranging from practice management, orthodontics, dental implants, practice support services, and recruitment,  offering a full range of services assisting dentists throughout their career, from qualification to retirement.

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:

    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 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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