=
MediEstates - First time dental practice buyer? Make sure you think ahead!
First time dental practice buyer? Make sure you think ahead!

First time dental practice buyer? Make sure you think ahead!

All too often first-time buyers choose not to proceed with a great acquisition opportunity because they have been thinking about the practice price only.

When the team at MediEstates are talking with Dentists that are starting to consider buying their own dental practice we often explain to them that it is of paramount importance to think ahead.

It’s safe to assume that your dental career will cover a span of 15 years minimum, and for each of those years you will generate a set amount of income. With a simple sum you can calculate the total that you are capable of earning during the 15-year period. Got that figure calculated in your head? Ok, keep that in mind.

Now think ahead to when you purchase your own dental practice, you will be acquiring the assets i.e., the goodwill of the business, the equipment, the fixtures, and fittings etc. but you will also be acquiring the historical income streams which is just as, if not more important. If you should have to pay an additional £20,000 to £40,000 more than what you feel a practice is worth, then considering the calculation you have just made this additional amount is meaningless over your career especially if the practice in question has a strong income history and a healthy profit margin.

Lets now look at an example to help illustrate this point

Assume you are interested in purchasing a dental practice that has total revenue of £534,041:

- The practice overheads are £350,030, leaving you with total earnings of £183,727 per year.

- The sale price of this practice is £563,764.

- Assume that you qualify for a bank loan (based on this example you would require £56,367 deposit and the monthly repayments would be £3,390 on a 15 year term) leaving you with earnings of £142,597

- Without even factoring any annual income growth over this 15 year period, the total net income you will generate over your career will be in excess of £2.1 million.

- Remember also that once the term of the practice loan comes to an end your income will be topped up again by another £40,000.

- If you manage the practice well, keep overheads low and take proper action to grow turnover, this career income total could be even larger still.

Revenue

£534,041

Overheads

£550,030

Earnings

£183,727

Monthly Loan

£40,680

Yearly earnings

£142,597

15 year Earnings

£2,138,955

3% uplift year on year Total Earnings

£2,652,149

 

So, ask yourself the critical question: is borrowing £507,388 to generate over £2.1 million in career earnings a prudent business decision?

As a dental business owner and as long as you manage your practice well, you’ll never lose your employment, and this level of income is yours to enjoy. You’ll be reaping the rewards of being an entrepreneur, elevating you towards multi-million earnings over your dental career!

Remember earlier when you calculated that figure? Is it close to these numbers?

Now add to that £2.1 million figure the potential yearly business income growth of approx. 3% and your total career income now stands to exceed £2.85 million. Better still you can then also add the value of the sale of the business at end of your practice ownership career!

If what you have just read has caught your interest and you would like to learn more, please contact our professional and experienced team. We are the market leader in dental practices sales and acquisitions and are available to talk with you personally about becoming a practice owner and regarding suitable opportunities that we have available on the market.

By Lorraine Hunt

 

For more information, contact MediEstates on 01332 609318 or

visit www.mediestates.co.uk

 

 

 

Posted by: Lorraine Hunt 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.
Your shortlist contents will be included in this contact submission